Back in March, we pointed out that the actions of HS2 Ltd in relation to how they have dealt with land and property owners in many cases was fraud, or more specifically a clear breach of Section 4 of the 2006 Fraud Act.
At the time, we suggested reporting such breaches to Action Fraud, the national police fraud reporting system. That hasn’t worked out, with some police forces, which are almost certainly not set up to deal with such issues, telling complainants that their first recourse should be via HS2 Ltd themselves.
However, and much to our surprise, the response from the Serious Fraud Office who have also received complaints concerning the management of HS2 Ltd, has been more encouraging. The SFO are now asking for more details on:
– Any information/evidence you have that there was an element of dishonesty in the land valuation.
– Information on specific instances where landowners were purposefully misled as to the value of their land.
We also feel that, in line with the original complaints that HS2 Ltd are committing fraud on a regular, premeditated and industrial scale, which will seems set to escalate exponentially, as all reports suggest that HS2 Ltd are currently sending out possession orders like there is no tomorrow, and it is clear that in many cases they have absolutely no intention of valuing the land within the statutory timescales, let alone making payment. Under the 2006 Fraud Act, HS2 Ltd have a legal obligation not to cause losses to those businesses, farms and people which are subject to compulsory property purchase and temporary possession orders.
So please, if you feel you have lost money due to HS2 Ltd or if you feel land has been deliberately misled or land has been under-valued, contact the Serious Fraud Office, via the link below, and select the second option
https://www.sfo.gov.uk/contact-us/reporting-serious-fraud-bribery-corruption/
More information on why what HS2 Ltd have been doing constitutes as fraud follows.
In the past, it has sadly been commonplace for developers to breach what is known as the ‘Compensation Code’, which is made up of different pieces of legislation such as: the Compulsory Purchase Acts of 1965 & 1981; the Land Compensation Act 1973; and the Town and Country Planning Act 1990, on a serial basis. This is because there is no set penalty in law for breaking these laws, and the same can be said of the High Speed Rail Act of 2017 itself.
Under those various laws that comprise the compensation code, the key principal is one of ‘equivalence’, meaning that no-one subject to compulsory purchase should end up better off, or worse off as a result of any given scheme. In respect of those laws and of course the HSR Act itself, HS2 Ltd undeniably have a statutory duty to protect the financial interests of those whose properties they are buying, and that’s what gets them in trouble. We are now convinced that HS2 Ltd and the Department for Transport have simply never considered that the laws concerning fraud might apply to them.
In 2006, the definition of what constitutes fraud was expanded, and Section 4 of the 2006 Fraud Act specifies the offence of “Fraud by Abuse of Position”, which occurs when individuals and organisations occupy a position in which they are expected to safeguard and not act against the financial interests of another person. Fraud can occur when individuals and organisations dishonestly abuse that position, either to make a gain out, or more importantly in this case cause someone else to endure a loss. Any ‘dishonest abuse of position’ does not have to be deliberate, it just has to have happened.
Here is the actual text of Section 4 of the 2006 Act:
4) Fraud by abuse of position
1) A person is in breach of this section if he-
a) occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person,
b) dishonestly abuses that position, and
c) intends, by means of the abuse of that position—
i) to make a gain for himself or another, or
ii) to cause loss to another or to expose another to a risk of loss.
2) A person may be regarded as having abused his position even though his conduct consisted of an omission rather than an act.
There is maybe also a case that offences could have taken place under Sections 2 & 3 of the Act too, and if you have missed what has been going on you can catch up by watching the various videos about the businesses in Birmingham, the farmland in Warwickshire or Cheshire or the route-wide Panorama programme from last year and the recent special from Central, but for a number of years (and this is not an exhaustive list), HS2 Ltd have, and continue to:
- Seize land and property, mainly business premises, without making any payment whatsoever for the purchase of the properties or relocation cost or loss of earnings. In many cases, HS2 Ltd fail to produce an estimate of the value or even commence negotiations months after taking possession. It is also the case that many property owners have only relinquished property when threatened with the prospect of being evicted by bailiffs, which they have been advised they would end up having to pay for.
- Treat farmland which will be required on a permanent basis as if it is required on a temporary basis, to delay payments. HS2 Ltd also fail to provide farmers with compensation due to lack of earnings after taking possession of land that they do want on a temporary (and permanent) basis.
- Use as many tactics as possible to get land, business and home owners to accept less for their property than it is worth, including reducing offers after they have already been accepted.
- Refuse to accept ‘blight notices’, meaning they would be required to buy properties that are not needed to build the scheme, but cannot sell on the open market due it. In many cases because HS2 Ltd have decided these are ‘too far’ away from the proposed tracks, even if they are right next to a construction compound, planned depot or similar associated works. This is a less clear-cut instance of fraud by abuse of position, however we know HS2 Ltd have not been even handed with their acceptance of blight notices, so it is worth complaining about if you have evidence.
So let’s recap all of that again.
HS2 Ltd have a legally defined responsibility to safeguard the financial interests of everyone who they are buying land from, and have several defined timescales which they are not only failing to meet, but in many cases are not even attempting to meet.
As a result of their failure to pay people for land and businesses that they have already seized in many cases without even valuing it, their failure to even consider paying relocation costs to lots of businesses, to clearly and deliberately undervalue homes, to fail to pay farmers for the use of their land, and to refuse to buy homes which are clearly impacted by the scheme, people and businesses are losing money. This is undeniable. And for this to be fraud it doesn’t have to be deliberate, it can be due to sheer and utter incompetence, but whatever the reason, it’s time for the police to investigate.
To contact the Serious Fraud Office, via the link below, and select the second option
https://www.sfo.gov.uk/contact-us/reporting-serious-fraud-bribery-corruption/