A E Beckett & Sons (Lyndons) Ltd v Midland Electricity plc

Section 21(b) of the Electricity Act 1989 permits a public electricity supplier to exclude liability for economic loss caused by negligence only where the loss results from the effect of that negligence on the supply of electricity. It does not extend to economic loss caused by negligent installation or maintenance of electrical plant merely because the plant enables the supply to be provided. Parliamentary material may be used under Pepper v Hart to resolve a statutory ambiguity where the relevant conditions are met.

An electrical fire damaged premises operated by Stonegate Farmers Ltd and Primrose Valley Eggs Ltd. The supplier, Midlands Electricity plc, accepted liability for negligence, but relied on an exclusion of liability for economic loss under its statutory terms of supply.

The High Court held that the exclusion formed part of the relationship between the supplier and those companies and excluded their economic-loss claims. The companies appealed, raising questions about incorporation and the proper construction of the exclusion. The Court of Appeal agreed to determine the statutory construction issue, which might resolve the appeal.

1. Appeal allowed. The question of costs was reserved to the judge below after the quantum hearing. Leave to appeal to the House of Lords was refused.
2. The relevant statutory language was ambiguous. The distinction drawn in Part I of the Electricity Act 1989 between supplying electricity and providing electric lines or electrical plant was material, but textual analysis alone did not resolve the meaning of section 21.
3. Under Pepper v Hart [1993] AC 593, the court considered parliamentary debates concerning the introduction of section 21. Those debates showed that section 21(b) addressed economic loss resulting from interruption or variation of the electricity supply, particularly losses arising from interruption to computer systems.
4. The reference to economic loss was not confined to pure economic loss. Nevertheless, section 21 permitted contractual terms restricting liability only for loss resulting from the effect upon the supply of current caused by the relevant negligence. It did not authorise exclusion of liability for loss caused by negligent installation or maintenance of plant as such.
5. The court anticipated that this construction would resolve the litigation. The formal order allowed the appeal.

• Court of Appeal: Allowed the appeal from the High Court’s preliminary ruling on the exclusion of liability for economic loss.
• High Court, Queen’s Bench Division: The deputy judge found negligence and liability for damages, but held that the supplier’s statutory exclusion clause excluded Stonegate’s and Primrose’s economic-loss claims.