On 13 December 2005, Landsvirkjun signed an agreement with water rights holders in Jökulsá á Dal, Jökulsá í Fljótsdal and Kelduá regarding the appointment of a special five-man assessment board with the role of evaluating the scope and value of water rights relating to the Kárahnjúkar Power Plant. The assessment board began working early in 2006, and interested parties submitted data. Extensive measurements of the average flow in watercourses and rainfall on the surrounding land were taken on behalf of the board by Vatnamælinga Orkustofnunar and the engineering firm Vatnaskil fh.
Oral arguments were put before the board in May 2007. On 22 August 2007, the assessment board announced its ruling, in which total compensation of ISK 1.2bn was decided for water rights holders in the Jökulsá í Dal area, over ISK 300m for those in Jökulsá í Fljótsdal, and over ISK 100m for those in the Kelduá area. The total amount of compensation for water rights holders due to the Kárahnjúkar Power Plant was put at ISK 1,634,395,767.
The agreement concerning the assessment board allowed any party to take the board’s decision on water rights compensation to court. Landsvirkjun offered payments to all water rights holders that were in line with the assessment board’s conclusions, and issued notification at the same time that should the case be taken to court, the company reserved its right to seek ratification in its own interest of the assessment board’s conclusions. A total of 43 landowners in the Jökulsá á Dal area sent notification of legal action, along with three from the Jökulsá in Fljótsdal and Kelduá areas. They account for around one third of water rights holders covered by the assessment. The remaining rights holders decided to accept the assessment board’s conclusions. A large proportion of those rights is held by the Icelandic State or is on common ground.
The court case will be covered by general regulations, and the legal firm Attorneys At Hofdabakki will be representing Landsvirkjun.