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Court of Appeal reviews principles of ouster of common law liability

Southern Gas Networks Plc v Thames Water Utilities Ltd [2018] EWCA Civ 33 was a test case in which the Court of Appeal held that TWUL was liable to SGN in negligence in respect of Failure to Supply Gas (FSG) payments which SGN was obliged to make to customers as a result of the interruption of the gas supply which was caused by a leak in a water main owned by TWUL.

SGN claimed such FSG payments under section 82(1)(a) of the New Roads and Street Works Act 1991 (NRWA) and as damages for negligence.  TWUL contended that (a) such payments were not “expenses reasonably incurred in making good the damage” within the meaning of section 82(1)(a), and (b) liability at common law was ousted by section 82 of NRSWA because that section comprised a complete statutory code for compensation, the operation of which was inconsistent with and left no room for any residual liability at common law.

The Court of Appeal held that FSG payments did not fall within section 82(1)(a), but, contrary to obiter remarks of the Court of Appeal in Yorkshire Electricity Distribution plc v Telewest Limited [2006] EWCA Civ 1418 and reversing the decision of the High Court, found that section 82 did not oust common law liability.

The decision of the Court of Appeal provides a valuable review of the principles of ouster, and definitive guidance for utility companies as to the basis of liability under section 82.

Andrew Rigney KC appeared for TWUL at first instance and in the Court of Appeal. He was instructed by Clyde & Co LLP.

Read judgment here.

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