Court of Appeal clarifies compensation rights under the National Security and Investment Act 2021

In R (L1T FM Holdings UK Limited) v Chancellor of the Duchy of Lancaster [2025] EWCA Civ 1528 the Court of Appeal has dismissed an appeal challenging a lack of compensation under the National Security and Investment Act 2021 (NSIA) on the basis of a breach of Article 1 of the First Protocol (A1P1) to the European Convention on Human Rights (ECHR). 

This is the first appellate decision on the compensation regime under the NSIA and provides important guidance on the proportionality assessment to be conducted when national security interventions interfere with property rights.

Key points

• In the context of national security interventions under the NSIA, there is no absolute right to full "fair market value" compensation for forced divestment of property. The proportionality of any compensation must be assessed in context, and in the national security context a wide margin of judgment is afforded to both Parliament and the Executive.
• The existence of a provision in the NSIA authorising financial assistance is important in the overall assessment of proportionality since it would allow mitigation measures against hardship.
• The judgment notes that there is no clear European Court of Human Rights (ECtHR) authority requiring a State to compensate for any diminution in value resulting from a forced sale in these circumstances and restates the principle that domestic courts should not go further than the established ECtHR jurisprudence.

For more details see our Administrative and Public Law Notes here.