In the last Property Update, we outlined the government's announcement of the route for Phase 2 of its High Speed Two railway project (HS2).

At the same time as making the Phase 2 route announcement, the government published a consultation paper in relation to an exceptional hardship scheme which would be aimed at providing assistance to certain residential and small business owners whose properties are affected by the initial Phase 2 route announcement (EHS2). If adopted, EHS2 would be a discretionary scheme and would apply until such time as the long term compensation and statutory blight provisions came into force.

On 25 April 2013, the government published some further information in relation to EHS2. It has therefore extended the consultation deadline to 20 May 2013.

There is a separate exceptional hardship scheme for Phase 1 (EHS1). Phase 1 is the part of the HS2 project which will go from London to Birmingham and Lichfield. The consultation for EHS1 took place a few years ago.

More recently, between October 2012 and January 2013, the government undertook a "Property and Compensation Consultation" in relation to another compensation scheme for Phase 1 of HS2. This was subject to challenge in the High Court in the case of R (on the application of Buckinghamshire County Council and others) v Secretary of State for Transport and the Court's judgment was handed down a few weeks ago. By the case, several claimants were seeking judicial review of several of the government's decisions in relation to Phase 1 of the HS2 route, including the Phase 1 compensation scheme.

The claimants (which included HS2 Action Alliance, Heathrow Hub Limited, Aylesbury Park Golf Club and a group of 15 local authorities affected by Phase 1) brought 10 grounds of challenge. The government won in respect of nine of these grounds.

Among other things, the Court rejected the argument that the government had failed to carry out a fair and lawful consultation on high speed rail strategy and the route for Phase 1. It also rejected the argument that the Government had failed to comply with European environmental legislation. An appeal against the decision on these grounds has now been lodged in the Court of Appeal by the claimants. We understand that the hearing is due to begin on 10 June 2013.

The government lost on only one ground - the way in which the consultation had been carried out for compensation in relation to Phase 1. The government has decided not to appeal against this decision. Instead, it says it will re-run the consultation in line with the judge's ruling that more consideration should have been given, during the consultation process, to other potential compensation models. The government considers that re-running the consultation (which it will do later this year) will not delay the HS2 scheme in any way. It says that 2017 remains its start date for construction works.

The Department for Transport has issued a chart, summarising the challenges made, the judge's ruling, and the impact (in each case) on the HS2 project.

Also on 25 April 2013, the government released some further detail in relation to EHS1. This includes a study of property blight around the Phase 1 route, and clarification as to the criteria which must be met for EHS1 to apply.