Transco Plc v United Utilities Water Plc

Transco Plc v United Utilities Water Plc [2005] EWHC 2784

Tort – Negligence – Duty of Care – Economic Loss – Proximity – Trespass to Goods – Wrongful Interference with goods

Facts:

United Utilities Water (UUW) operated water networks in the UK. UUW were required to shut off the water while undertaking street work. An UUW employee mistakenly shut off a gas valve rather than a water valve. As a result, Transco (the gas company) incurred substantial costs in restoring and investigating the issues surrounding the gas supplies. Transco alleged UUW was liable for negligence and trespass, seeking to claim pure economic loss.

Issues:

Was there necessary proximity in the relationship between the parties for UUW to owe Transco a duty of care?

Held:

Reasonable proximity was found to exist between the parties, as both parties operated in the same street and both were public utilities. It was reasonable to expect that accidentally shutting off the wrong valve may affect the installation of other providers or installers, which were located in the same substrata. Transco sought to recover economic loss resulting from UUW’s actions. The “spirit” of physical damage to property included any damage caused to reputation and wrongful interference with goods or land. UUW had negligently interfered with the property owned by Transco, which had consequentially resulted in loss. Transco were seeking to recover the costs of rectifying the damage, not the consequential loss flowing from the interruption of the supply. It was considered irrelevant that no physical damage occurred to the pipe, thus liability under the Torts Interference with Goods Act 1977 was established. As street works were being carried out at the time of the incident, UUW was also liable to compensate Transco under the New Roads and Street Works Act 1991, s 82(1)(b).