Southern Gas Networks Plc v Thames Water Utilities Ltd

Section 82 of the New Roads and Street Works Act 1991 imposes strict liability for expenses reasonably incurred in repairing damage to apparatus in the street. That expression covers necessary remedial works and relevant administration expenses, but not regulatory compensation payments made because gas supply remains interrupted.

Section 82 forms a complete statutory code for the subject matter it addresses. A concurrent common-law negligence claim is therefore excluded, including where damage results from an escape of water.

The claimant gas undertaker sought recovery from the defendant water undertaker after an escape of water damaged its gas main. The parties agreed the relevant facts, quantum and most issues.

The remaining questions were whether payments made to customers under the Gas (Standards of Performance) Regulations 2005 were recoverable under section 82(1)(b) of the New Roads and Street Works Act 1991, and whether section 82 excluded a concurrent negligence claim. A further issue concerning the claimant’s obligation to make the payments was adjourned generally.

1. The customer payments were not expenses reasonably incurred in making good damage to apparatus under section 82(1)(b) of the New Roads and Street Works Act 1991. That provision is narrower than section 82(1)(a) and covers necessary remedial works and relevant administration expenses, but excludes consequential financial losses.
2. The payments arose because gas supply had been discontinued for the prescribed period under regulation 7 of the Gas (Standards of Performance) Regulations 2005. Their trigger was interruption of supply, not the need to repair physical damage.
3. Following Yorkshire Electricity Distribution Plc v Telewest Limited [2006] EWCA Civ 1418, section 82 was a complete code excluding common-law negligence in respect of its subject matter. The court adopted and followed that reasoning.
4. The statutory code applied equally to damage caused by an escape of water. There was no principled distinction between that event and damage occurring during street works.
5. The court preferred Telewest to Scotland Gas Networks Plc v Scottish Water [2011] Scot SC 195. The claim in negligence was therefore precluded.