Necessary wayleaves: diminution wins, ransom value fails

A landowner may dislike electricity infrastructure crossing their land. But can they claim part of the network operator’s cost saving if the alternative route would be much more expensive?

In Miller and Frossell v National Grid Electricity Distribution (East Midlands) plc [2026] UKUT 265 (LC), the Upper Tribunal’s answer was no.

Overview

This recent decision of the Upper Tribunal (Lands Chamber) addresses the proper basis for assessing compensation following the grant of a necessary wayleave under paragraph 7 of Schedule 4 to the Electricity Act 1989. The case is of particular interest to landowners, energy companies, and their advisers in understanding the limits of compensation claims where electricity infrastructure crosses private land.

The Facts

The claimants, Mr David Miller and Mrs Rachael Frossell, own Wood Farm in Bedfordshire. A necessary wayleave was granted by the Secretary of State on 18 July 2024, for a period of 15 years, authorising National Grid Electricity Distribution (East Midlands) Plc to retain a high voltage 11kV overhead line supported on three poles, together with a low voltage line serving a neighbouring property.

The claimants sought compensation of £200,000 on the basis that the wayleave deprived them of a "golden key" or ransom position — namely, the ability to require the respondent to remove the lines or to negotiate a sum reflecting the cost savings that National Grid would enjoy by avoiding an alternative route costing approximately £675,000. The respondent contended that compensation should be limited to the diminution in value of the claimants' land, which the parties' experts agreed was £43,800.

Key Valuation Issues

1. "Commercial value" and the principle of equivalence

The Tribunal firmly rejected the claimants' argument that they were entitled to share in the cost savings achieved by the respondent by using their land rather than an alternative route. Applying the well-established principle of equivalence — that "the owner shall be paid neither less nor more than his loss" — the Tribunal held that compensation must be assessed by reference to the value of the land to the owner, not its value to the acquiring authority. Any special value attributable to the respondent's need to supply electricity over the claimants' land was to be disregarded under the Pointe Gourde/no-scheme rule (when a government body compulsorily purchases land, the landowner’s compensation excludes any increase/decrease in the market value of the land which is caused entirely by the public scheme).

2. Diminution in value methodology

The experts adopted a conventional approach: determining the unaffected market value of the property (assuming no lines or poles), assessing the percentage loss of value caused by their presence, decapitalising that loss to an annual figure using a years purchase multiplier at a chosen yield, and then recapitalising for the 15-year wayleave period.

The Tribunal noted three challenges raised by the claimants:

• That a purchaser would assume indefinite renewal and price accordingly, meaning the full diminution (not a reduced period) should apply;
• That future house price increases should be factored in; and
• That a gap period between voluntary and necessary wayleaves went uncompensated.

On the first point, the Tribunal expressed "some sympathy" and cautioned that the choice of yield significantly affects the outcome, observing that the 5% yield used in Nelson v Southern Electric Power Distribution [2025] UKUT 213 (LC) "does not reflect a considered view of the Tribunal and should not be treated as guidance." The Tribunal emphasised that the choice of yield and its impact on compensation should be considered carefully in every case. However, without sufficient evidence, the Tribunal did not interfere with the figure agreed by the experts.

On the second point, the Tribunal rejected the argument as inconsistent with valuation principles — market value at the valuation date already accounts for future market movements, upward and downward.

On the third point — the uncompensated "gap" of approximately three years — the Tribunal acknowledged there might be some merit.

3. Disturbance

The Tribunal awarded £5,000 for fencing costs, finding a sufficient causal connection to the grant. However, claims for the claimants' time, unpaid historical wayleave payments, and the respondent's conduct were either not compensable under paragraph 7 or not sufficiently evidenced.

The Award

Total compensation was assessed at £48,800 (£43,800 diminution in value plus £5,000 disturbance), with interest at the statutory rate from 18 July 2024.

The Significance

For operators: The decision is helpful in resisting claims based on “ransom” or “commercial” value: the landowner cannot claim a share of the saving created by the operator using their land rather than a more expensive alternative route. The no-scheme rule applies rigorously.

For landowners: The message is that compensation claims need to be built on the right evidence. Diminution in value remains central, and disturbance can be recovered where it is properly evidenced and causally connected to the grant of the wayleave. 

The likely future battleground: Valuation methodology. The Tribunal’s comments are a warning that the yield used in decapitalisation/recapitalisation exercises requires careful, case-specific justification, and that agreed yields in earlier cases should not be treated as ready-made guidance.

Timing matters: Where a voluntary wayleave has expired but infrastructure remains in place while a necessary wayleave process runs its course, advisers should think early about interim payments, arrears and offers.   The Tribunal did not make a separate paragraph 7 award for the gap period in this case, but it clearly regarded the point as one with practical force.

In short: no ransom value, no shortcut on valuation evidence, and no room for leaving compensation strategy until the end.