A much under-publicised provision of the Housing and Planning Act 2016 ("the Act") is the proposed S106 dispute resolution mechanism. In this article we set out the mechanism has the potential to free up protracted s106 negotiations and speed up the granting of planning consents.

Summary and implications

The Act introduced schedule 9A into the Town and Country Planning Act, which allows the Secretary of State to nominate an individual (an "Appointed Person") to resolve issues holding up the completion of a planning agreement. However, the Secretary of State may only do so if he thinks the local planning authority would be likely to grant the application if a satisfactory planning obligation is entered into.

An applicant or a local planning authority can request that the Secretary of State makes the appointment. Once a request has been made an applicant cannot appeal under S78(2), and a local planning authority cannot refuse an application until the resolution process has come to an end.

The legislation provides for a two week cooling off period to enable parties to resolve outstanding issues. In many cases, if this process is utilised it is likely to focus the parties' minds on what is actually important. Regulations will also be introduced making provision for the payment of fees including, potentially, an award of costs for unreasonable behaviour.

If the cooling off period is unsuccessful and the matter proceeds to dispute resolution, parties must co operate with the Appointed Person and comply with reasonable requests to provide information or documents or to take part in meetings.

Details of who the Appointed Person is likely to be are yet to be confirmed. It is expected that they will either be a chartered surveyor or town planner but not a PINS inspector. Whether this is a matter that ultimately will fall within the remit of RTPI, as opposed to PINS, remains to be seen.

What is the effect of dispute resolution?

The Appointed Person will produce a report setting out recommendations of appropriate terms for the s106 agreement. Once a report is issued and an agreement according to its recommendations is signed, the local planning authority cannot refuse permission on grounds relating to the s106 agreement. However, if the report recommends appropriate terms for the agreement and it is not completed within a prescribed period, the authority must refuse the permission.

Whilst a developer will be in receipt of a refusal notice he will at least be in a position of certainty in respect of the negotiations and can appeal the matter to PINS. This means an Inspector will essentially be re-determining the same issues as the Appointed Person which may lead to an application for costs against a local planning authority, should the appeal be successful.

This provision may provide the key to unlocking stalled negotiations and is a useful introduction to legislation. Just how useful remains to be seen once the regulations regarding costs have been introduced.