Roadworks rage

Public works contractors face onerous liabilities if they hit cables or do other damage. But there are exceptions.

A major public works client's recent inquiry into its right to refute a British Telecom claim for damage to cables prompted a review of the uncharted side of the New Roads and Street Works Act 1991.

Any dispute in respect of damaged underground cables will be resolved in accordance with the act's provisions.

In addition, under section 231 of the Highways Act 1980, street works authorities must compensate any person who sustains damage by reason of the execution of street works.

Utility companies and companies that employ public works contractors are licensed under the act as undertakers - that is, those who undertake the works.
The duty owed by one undertaker to another under section 82 of the 1991 act is strict, but it does contain one qualification. It states:

An undertaker shall compensate any other person having apparatus in the street in respect of any expense reasonably incurred in making good damage to that apparatus, as a result of execution of street works.

The liability of an undertaker arises whether or not the damage or loss is attributable to negligence on his part or on the part of any person for whom he is responsible, and, notwithstanding that he is acting in pursuance of a statutory duty.

However, his liability does not extend to damage or loss which is attributable to misconduct or negligence on the part of the person suffering the damage or loss.

So, an offending undertaker will riot be liable for damage attributable to the negligence of a suffering undertaker. The negligence referred to is a breach of a positive dirty the suffering undertaker owes to the offending undertaker.
Section 82 obliges an undertaker to compensate the street works authority for any damage or loss suffered. So, although the authority is liable under section 231 of the 1980 act, the undertaker also is liable, and liable to indemnify the authority, under section 82 of the 1991 act.

There are no reported cases on the act or its predecessor, the Public Utilities Act 1950. However, in the case of Post Office v Hampshire County Council (1), the Court of Appeal considered a close relation: section 8 of the Telegraph Act 1878. This provided that undertakers or their agents who destroy or injure a telegraphic line of the Postmaster General shall be liable in making good that damage.

In this case, a Post Office engineer wrongly informed council employees that a Post Office cable was not under the verge being dug. The Court of Appeal concluded that the council was liable for the damage, but it further found that the negligence of the Post Office, in giving false information, resulted in a circuitous action. As one Lord Justice said, it offends one's sense of justice that a utility can recover the cost of damage that it has itself brought about.
From a practical point of view, it is essential that contractors request details of the whereabouts of utility apparatus in good time.

Although utility company maps commonly carry disclaimers, the question is whether failure to provide an accurate map amounts to negligence. The Institution of Civil Engineers' Report Joint Committee of Location of Underground Services (1946) states that "each statutory undertaker should keep detailed records". The Horne report, which formed the basis of the act, also supports the public utilities.

The moral is that utility undertakers should riot admit defeat if faced with a bill for remedial works to utility apparatus when they have followed due diligence procedures. If good homework is done the legislation should work fairly, and even if ultimately liable, contractors may prove the undertaker contributorily negligent and have damages reduced. (2)

Endnotes

1. (1979)2 ALL ER 818
2. See Thames Water Ltd v McNicholas Construction Co and Videotron Ltd, 2 July 1998