SSE prepares legal proceedings against Stansted Airport

Airport uses new ploy to deny compensation after losing ‘golden rivet’ loophole

Stansted Airport faces legal action on behalf of thousands of local residents denied compensation over devaluation of their property caused by airport expansion. The cost to the airport could run to hundreds of millions of pounds.

Stop Stansted Expansion (SSE) announced the move after the airport failed to meet a deadline to make a public statement agreeing to introduce a compensation scheme for local residents after years of prevarication.

Since 2002, Stansted has used the excuse that it has no legal obligation to pay compensation until it has completed everything listed in its 1999 Phase 2 planning consent. Completion of a small part of these works, the Echo Cul-de-Sac, has been repeatedly postponed – most recently until the mid-2020s – and has thus been branded the ‘golden rivet’ loophole.

However, it transpires that the airport was wrong to use the ‘golden rivet’ argument as an excuse for not paying compensation. Lawyers for Stansted Airport finally accepted this at a hearing in the Royal Courts of Justice in March but they then immediately put forward a new excuse for rejecting compensation claims – arguing that claims were now time-barred under the Limitation Act. This gave rise to withering criticism from the judge who remarked:

“So, after years of telling people you can’t claim until the works are complete,
you’re now saying Tee-Hee – you’re too late.“

Brian Ross, deputy chairman of SSE, who attended the hearing, commented: “It was clear from the expression on the judge’s face that he could hardly believe what he was hearing, and nor could I. Accordingly, SSE immediately asked for an urgent meeting with the airport managing director. That meeting took six weeks to arrange and when we eventually met it was obvious Stansted Airport was stalling over the ‘golden rivet’ issue and over its use of the Limitation Act to reject claims.”

SSE gave Stansted Airport an ultimatum of 31 May to make a public statement with a commitment to introduce a compensation scheme, failing which SSE would itself make a public statement and do all in its power to safeguard the interests of local residents, including legal action.

A few hours before the expiry of this SSE ultimatum, Manchester Airports Group (MAG) the owners of Stansted Airport contacted SSE offering a further meeting to discuss the matter. This offer was declined. SSE took the view that the issues should no longer be discussed behind closed doors. In a subsequent telephone conversation, MAG made some important concessions to SSE but still refused to make a public statement. SSE therefore decided to make its own statement having regard to the long history of prevarication and broken promises on this issue.

SSE will hold a press conference this Friday, 10th June at 12 noon at the Stansted Hilton Hotel (CM24 1SF) when it will reveal further details, including the legal action it intends to take, the legal team appointed, the postcode areas affected and the scale of the devaluation of local house prices. Homeowners awaiting compensation will be available for interviews.

SSE Chairman Peter Sanders commented: “Compensation has never been part of SSE’s natural territory but in this case the airport’s behaviour is so reprehensible that we cannot stand idly by. It beggars belief that a publicly quoted UK company could act in such a manner. Enough is enough.”

ENDS

NOTES 

Copies of the slide presentation to be given by SSE at the press conference (12 noon, Friday 10 June, Stansted Hilton Hotel) will be available at the event and on this website from 2.00pm on 10 June.

SSE will this week be sending a briefing note to all of its members and on-line supporters. Local parish councils will also be briefed and SSE will be holding public meetings to explain the position more fully. Key local politicians and MPs have already been briefed by SSE.

SSE’s preparations for a legal challenge on the airport’s use of the Limitation Act are well underway. SSE has already appointed and briefed its legal team, which includes two expert barristers and one of the country’s foremost planning solicitors.

MAG is 35.5% owned by Manchester City Council, 29.5% owned by nine other councils in the Greater Manchester area and 35% owned by an Australian investment fund. As well as Manchester and Stansted, MAG also owns East Midlands and Bournemouth airports.

SSE has evidence showing that Stansted’s growth over the past 17 years (since 1999) has caused property devaluation over a wide area covering up to 15,000 local homes. The scale of the devaluation is over 20% for homes nearest the airport.

The potential cost of compensating residents is several hundred million pounds, which may explain why MAG was able to acquire the airport for such a relatively low price (£1.5bn).

Further information for potential claimants, including a downloadable compensation claim form will soon be made available on this.

BACKGROUND TO THE COMPENSATION STORY

This story begins in 1986, when Stansted Airport Ltd (STAL) obtained planning consent to expand to a throughput of 8 million passengers per annum (mppa). STAL acknowledged that this would adversely affect local house prices and, in accordance with its obligations under the 1973 Land Compensation Act, STAL agreed to compensate local homeowners for the resultant devaluation.

Local residents were invited to submit compensation claims and STAL (then owned by BAA) agreed to pay their legal and professional valuation costs. The first task was to establish where devaluation had taken place and agreement was soon reached on an area including most of the Hallingburys, the Broxted villages, Burton End Stansted, Birchanger, Hatfield Broad Oak, Hatfield Heath, Takeley, Elsenham and parts of Thaxted and Bishops Stortford.

Comparative valuations were carried out to arrive at a percentage devaluation (i.e. compensation payable) for each of those areas. Some 1,900 claims were submitted, two-thirds of which were successful.

All of the above related to Phase 1 of Stansted’s expansion. Subsequently, in April 1999, it was granted permission for Phase 2 of its expansion plan allowing it to grow from 8mppa to 15mppa. Within three months of that approval, Stansted had exceeded the 8mppa threshold and within three years it exceeded 15mppa. The airport has handled over 15mppa every year since 2002. Further planning applications have since been approved whereby Stansted now has a permitted throughput of 35mppa. This year it will handle about 25mppa. However, local residents have only ever been compensated for an airport handling a maximum of 8mppa.

This injustice has arisen because, over the years, STAL has consistently advised local residents that compensation claims could and should not be submitted until completion of all of the works authorised by its Phase 2 planning permission. This was originally expected in 2001/02 but one small part of the approved development in the ‘Echo cul-de-sac’ has repeatedly been postponed.

The latest advice from STAL is that the Echo cul-de-sac (which has been dubbed as the ‘golden rivet’) is unlikely to be needed until the mid-2020s, some 25 years later than originally planned and 14 years after the airport surpassed the 15mppa threshold which, according to STAL’s 1999 planning application, could not be achieved without the Echo cul-de-sac development.

If STAL has its way, that injustice will now become staggeringly worse because instead of arguing that it’s too early for compensation claims to be submitted, STAL now says it’s too late to submit claims. STAL’s new position is that all Phase 2 works except the Echo works were completed by March 2007 and so claims could have been submitted one year afterwards, in March 2008, and the latest date for submitting compensation claims was six years after that – i.e. March 2014.

FURTHER INFORMATION AND COMMENT

Peter Sanders, SSE Chairman – 01799 520411; petersanders77@talktalk.net
Brian Ross, SSE Deputy Chairman – 01279 814961; M 07850 937143; brian.ross@lineone.net
SSE Campaign Office – info@stanstedairportwatch.com