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1. Introduction
Is it right that governments pay compensation when land is compulsorily purchased or physically taken but not when land is rendered less valuable through regulation? This inquiry is significant to landowners subject to regulation (insofar as it restricts or prevents the use of their property) and more broadly, provides a governance framework to promote internal consistency by treating like cases alike. In this paper, I adopt a Rawlsian analysis (Rawls, 1971) to explain why the concept of justice as fairness requires regulatory land takings to be made compensable in the same way that physical land acquisitions are. I do this by considering what the dramatis personae, conceived by Rawls – indifferent decision makers stripped of their biasness, would decide. The stage or context adopted for the Rawlsian actors is an Anglo-Saxon common law world.
The principle that private property in species at least, should not be taken by the state without compensation has emerged as a settled feature of legal doctrine in both common law and civilian systems since at least the 17th century (Harris, 1996, p. 95). In Director of Buildings and Lands v Shun Fung Ironworks Ltd [1], Lord Nicholls in the Privy Council stated that hand in hand with the power to acquire land without the owner’s consent was an axiomatic obligation to pay “fair and full” compensation (p. 125). In the House of Lords, Lord Pearce declared in Burmah Oil Company (Burma Trading) Ltd v Lord Advocate [2], that “It is plainly just and equitable that, when the state takes or destroys a subject’s property for the general good of the state it shall pay him compensation” (p. 149). Similarly, in the Privy Council’s decision in in Government of Malaysia v Selangor Pilot Association [3], Lord Salmon held that laws authorizing the taking of property without compensation are generally recognized as “repugnant to justice” (p. 356).
The right to be compensated for takings of property is constitutionally protected in many parts of the Commonwealth (Allen, 1993, p. 523). Specifically, 31 of the 54 member States (The Commonwealth, 2022) include a right to property in their Constitutional Bill of Rights, thus affording market-price compensation if a physical taking of land occurs. In the USA, while compensation for physical takings are...