New Clause 4

HC Deb 19 February 1981 vol 999 cc471-8

COMPENSATION FOR LEAKAGE DAMAGE

'In the event of any leakage or escape of any substance from a sewer, main, reservoir or other works of a statutory water undertaker, or of any agent of a statutory water undertaker, causing loss or damage, any person sustaining loss or damage shall be entitled to full compensation therefor with or without proof of negligence provided the amount of compensation payable to or in respect of any person in respect of any injury or damage caused by any leakage or escape as is mentioned may be reduced by reason of the fault of that person if, but only if and to the extent that, causing of that injury or damage is attributable to any act of that person commited with the intention of causing harm to any person or property or with reckless disregard to the consequences of that act.'.—[Mr. Graham.]

Brought up, and read the First time.

Mr. Ted Graham (Edmonton)

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Bernard Weatherill)

With this we may discuss new clause 5—Compensation.

Mr. Graham

The new clauses were tabled primarily to provide the House with a short debate so that we could reinforce points made in Committee. New clause 5 is perhaps more germane because it deletes the direct reference to sewers and concentrates on the main point made by the Minister in Committee.

We are anxious about innocent people whose property, through no fault of theirs, is damaged by a burst water main, a collapsing sewer or a sewer overflow. They have the almost impossible task of proving that the damage is a result of negligence. The Minister showed the greatest possible sympathy for our case. We recognise the practical problems involved in dealing with the sewer aspect of the problem. There is no difference between us in our desire to legislate for compensation. We tabled the new clause to stress our anxiety.

The Minister will tell us that it has not been possible to honour the assurance that he gave in Committee that he would do something on Report. That has much to do with the haste of the business managers who want to get the Bill into another place as quickly as possible because of the urgency involved in settling borrowing requirements.

We believe that we have a good case for both water and sewage damage. In Committee the Minister said that the greatest damage arises from burst water mains. He went out of his way to explain why it was right and proper to deal with sewers as well as water. Perhaps rhetorically, he said: Why should the new clause be attached to this Bill, which is fundamentally about water per se and the problems associated with it? The answer is, clearly, that water authorities now have an undertaking for sewerage. That is why it is difficult to separate damage arising from water and damage arising from sewers. The Minister said: The question of the liability to be assessed in terms of sewerage is much wider, and the complexity of the issue is so great that I have been unable to give full attention to it in the relatively brief span for which we have been considering this Bill …I shall need to consider the matter further before I can form a considered view of the question of the extension of liability to the sewerage system as in the new clause. We fully understand the constraints of time and the difficulty of finding the money that might eventually be needed. We do not want to make a big issue of the Minister's being unable to deal with the matter now. We hope that he will deal with water later.

The Opposition's job is to remind the Minister of the commitments that he made in Committee. The Minister said: To summarise the position on new clause 1, the principle of imposing strict liability in relation to water supply is attractive. I am prepared to consider a Government amendment on Report to this effect, although I must say to the right hon. Gentleman and his colleagues that I have not yet completed all the consultations within the Departments which are so clearly necessary I assure the Committee that I hope to be able to produce a Government amendment on Report which will deal with the matter of strict liability in relation to water supply only. I am certainly prepared to consider the principle of dealing with the sewerage system and the problems of sewers. But, in fairness to the hon. Member for Bury and Radcliffe, I must say that I think it unlikely that I shall be in a position to take the matter much further on Report. Many people outside the House will be heartened that the Minister is prepared to discuss the principle of compensation and liability, not in a positively legislative manner but recognising that people are worried about it and would like to discuss the matter with him. When I concluded my remarks in Committee I said: I hope that if the Minister intends to deal directly and narrowly with the water aspect of the problem, he will accept that the Government will have to come forward as quickly as possible with a statement or paper recognising that the sewerage aspect of the matter needs to be dealt with."—[Official Report, Standing Committee A, 10 February 1981; c. 151–6.] I assume that a satisfactory new clause will be introduced in another place to deal with water. If we deal satisfactorily with the damage that can be sustained by a householder as a result of a mains burst we must recognise that there is a close affinity between that and the damage and hurt that results from sewage leaks. An occupier of land could suffer loss through a burst water main and receive proper compensation. Meanwhile, a neighbour could suffer from an overflowing or collapsed sewer and get no compensation.

The principle that the community, through water charges, reimburses an individual who suffers as a result of the failure of a community asset is identical in relation to both water and sewers. At present, at the Minister's request, a policy of ex gratia payments to uninsured householders suffering loss through burst mains is operated by water authorities because of possible personal hardship. If the Government accept the principle of compensation for people suffering loss through sewer failure it is within the Minister's power to make a similar request to water authorities to make ex gratia payments until such time as the legislative position can be resolved. The Minister's authority is embodied in section 5 of the Water Act 1973. It enables him to give directions of a general character to water authorities.

I believe that the Minister recognises the serious and calamitous personal circumstances which can flow from the sewer problem. This matter should not be pushed into pigeonholes. We have the Minister's sympathy and understanding. We want to help him to make a positive contribution which could affect all our constituents.

Will the Minister consider receiving an all-party deputation, with outside interested bodies, to examine the complex nature of tackling the repair and renewal of our sewerage system—of course without prior commitment—and to make recommendations thereafter? The general interest in the Bill's passage indicates clearly that there is a massive problem that should be considered seriously. I recognise that the problem has not been created by the Government. The Minister would be doing a valuable service to the House in recognising our general responsibility. I stress that my proposal would be an all-party approach and would include outside interests. A useful purpose would be served by a meeting or two to ascertain the help that can be given.

I express my gratitude to the hon. Member for Grantharn (Mr. Hogg), who has shown a keen interest in these matters. He has drafted amendments and pressed the case on Second Reading and in Committee. It is in that spirit of conciliation that I commend the clause to the House.

5 pm

Mr. Douglas Hogg (Grantham)

It is a great pleasure to take up the remarks of the hon. Member for Edmonton (Mr. Graham). I thank him for his kind words. I am grateful to him and his hon. Friends for the support that they have felt able to give to this proposal. The hon. Gentleman will appreciate that new clause 4 is somewhat of a composite, a concept with which he is rather more familiar than I am. I drafted new clause 5 with a view to curing one or two defects that may have arisen in new clause 4.

The objective of new clause 5 is to confine the strict liability imposed by the Bill to escaping water and to define contributory negligence in that context rather more exactly than previously. I have had the opportunity of advancing the arguments in favour of strict liability both on Second Reading and in Committee. That being so, I do not propose to repeat them now. Once again, I thank Opposition Members for the support that they have given. I thank my hon. Friend the Under-Secretary of State for his helpful and generous response to my proposals on Second Reading.

In view of my hon. Friend's remarks in Committee, I am optimistic that he will be able to give an assurance to the House that he will ensure that a new clause is moved in another place that will meet substantially the requirements of the House. I visualise that my hon. Friend will tell us that the clause will be confined to escaping water and will relate only to installations that are within the control of the statutory water undertaking. Speaking for myself, that would be satisfactory.

If that is my hon. Friend's response, I shall not wish to press my clause. I shall dwell on one or two matters that I hope will find their way into the clause.

I share the views of the hon. Member for Edmonton on sewerage. It may not be possible to extend the concept of strict liability to sewerage in the clause which is to be moved in another place. However, I hope that the Government will not overlook the requirement to impose strict liability at some future date. I welcome and endorse the hon. Gentleman's comments on giving a practice direction to water authorities requiring compensation to be made available to those who suffer damage as a result of escaping sewage.

When my hon. Friend considers the new clause which is to be moved elsewhere, perhaps he will bear in mind one or two desirable elements. First, I hope that the new clause, while providing compensation for damage to property, will not exclude compensation for consequential loss. He will appreciate that there are many situations when damage to property results in consequential loss such as loss of profit. That often happens when damage is done to farmers' machinery or to industrialists' plant. I hope that the clause will take account of that.

I suggest that the clause should be drawn in a way that includes compensation for personal injury. In the majority of instances that we are contemplating, we envisage water escaping from a pipe and flowing on to adjoining land. I am sure that my hon. Friend will not overlook the fact that many pipes adjoin roads. When water flows on to a road it results in a road hazard. That may result in quite serious personal injury. I hope that any new clause that he may be minded, through his friends in another place, to move elsewhere will include compensation for personal injury.

I hope that the new clause will include the concept of contributory negligence. I was rather alarmed when I considered this matter for the first time that we might be landed with a clause that had the result of depriving a claimant of all his compensation if he was but a little at fault. I hope that any new clause that may be laid elsewhere will encompass the concept of contributory negligence.

I do not want to detain the House further. I give my hon. Friend the opportunity of giving any undertakings or assurances that he thinks fit. If he is able to give the undertaking for which I hope, may I say on behalf of the agricultural and farming community and on behalf of the industrial community generally that we welcome his generous response to the matters that I raised on Second Reading?

Mr. Giles Shaw

These new clauses were based on a new clause that we considered at some length in Committee. Extending the principle of liability to water, to sewerage and to all other aspects of the water authorities' domains has aroused considerable interest. It is right and proper that we have a further opportunity now to debate it. It is an issue that has not attracted a vast attendance in the Chamber. There is still room for one or two more to join us on these Benches.

The principle involved will be recognised by every hon. Member as being of great importance to his constituents. It is right that we should discuss it. When we considered the issue earlier, I indicated clearly that I had broad sympathy with the principle of imposing strict liability on statutory water undertakers when damage is caused by escapes of water from water mains. It seems wrong that individuals should bear the cost when they suffer damage from a burst in a pipe that is placed in the ground for the benefit of the public at large, and where the burst is no fault of their own. That remains my view.

Part of the difficulty arises because of the wide powers that water undertakers have to lay mains and sewers across private land. In many instances there are no wayleaves, and no deeds of agreement providing for compensation in the event of damage. Under the law as it stands, water undertakers are not liable for such damage except on proof of negligence. As was pointed out so powerfully in Committee, it is exceedingly difficult to prove that. Unless there is that proof of negligence undertakers are not obliged to pay a penny. However, it has been recognised that they pay on an ex-gratia basis to uninsured householders. That is right and proper, but it is a practice that serves to highlight the legal problem. From the water undertaker's point of view there is a particular difficulty. As they are not liable for damage in law they cannot insure themselves against it.

It is desirable to restrict change for the time being to water mains. The case of Rylands v. Fletcher established a form of strict liability in the case of reservoirs. I am advised that the same principle would probably apply to "other works" of the undertakers—for example, water treatment works and sewage disposal works. I do not consider it necessary to deal with reservoirs or other works in the Bill.

Sewers present a much more complicated problem. There is a lot in drains, and no doubt that is why sewers present a complicated problem. In Committee we had some discussion on the subject. Reference was made to the massive problem of derelict sewers in certain areas. The water authorities have no control over the amount of effluent carried by particular sewers. Any householder can connect a drain into a public sewer. But the cost of renewing or replacing derelict or overloaded sewers would be enormous. Does that, or should it, affect liability? Many housing estates are served by private and not public sewers. Should an amendment which benefits only those served by public sewers be accepted? How would an amendment relating to sewers affect the relative position of statutory undertakers for various services, such as gas, electricity, telephones, and so on? What would the position of highway authorities be under an amendment of this sort?

We have had an opportunity to consider water mains. I am not expecting answers to the questions that I have posed. I draw them to the attention of the House in asking that the House accepts that we cannot reasonably tackle all the problems now. They will need further consideration. Although the hon. Member for Edmonton (Mr. Graham) stressed that he wished us to consider the position of sewers and sewerage and not to exclude it from our minds, at present I do not think that it would be feasible to tackle the ramifications of that in time for an amendment to be tabled during the passage of the Bill. But I take the point of principle that he raised. I hope to go sufficiently far to satisfy the hon. Member for Edmonton and my hon. Friend the Member for Grantham (Mr. Hogg). Having gone sufficiently far on the principle in relation to water mains, I cannot easily exclude that the principle should be established for sewage and sewerage. For the moment, I cannot deal with that issue as easily, in large measure because the water undertakers—with whom the Bill deals fundamentally—are a discrete body which has a large responsibility, and we can control water mains and the authorities thereto. That is not so with the sewerage and drainage system.

The matter of principle is duly noted. I give an undertaking to the hon. Member for Edmonton that we shall not neglect that matter of principle. Indeed, I go further and say that we should be willing to discuss with colleagues, on an all-party basis, the principles that lie behind the matter and some of the problems that we shall have to deal with before we can be satisfied that the matter can be dealt with legislatively.

Mr. George Cunningham (Islington, South and Finsbury)

I apologise for intervening when I have not been here during the debate. I was unable to be here. I have had a 10-year interest in the subject. I think that it was exactly 10 years ago that the House discussed the extension of liability.

Will the Minister bear in mind that one of the principal cases on this issue is that relating to gas mains? It arises from gas leakage, which then caused water leakage. If we are to tackle this in a comprehensive fashion, it may be right to bring in not only water and water-related services, but gas services.

Mr. Shaw

We have had discussions—indeed, the time for discussion has been relatively short—with the Department of Energy about the proposals on water. It will be recognised that we are not making a new principle which is at variance with the way in which the gas authorities will have to deal with their problems. I assure the hon. Gentleman that we shall look closely at the consequences of the liabilities that occur to other undertakers, such as gas, in relation to water mains that are described in the new clauses.

I turn to the point on which the hon. Gentleman was seeking clarification. We have been able to make progress since our deliberations in Committee on discussing the principle of an amendment on water and water mains and to impose strict liability on water supply. I explained that I had not completed all the consultations with Government Departments that are necessary. However, I am pleased to be able to tell the hon. Member for Edmonton and my hon. Friend the Member for Grantham that those consultations are more or less complete and that we shall be tabling in another place an amendment dealing with damage from burst water mains.

I regret that it has not been possible to table the amendment for debate today. I acknowledge the fact that the short time between Committee and Report has not made it easier for us to fulfil the undertaking that I gave in Committee. Having established the principle, the drafting of the amendment will be done with great care. I have seen a draft already, so we are well on the right track. There are such important legal principles at stake that it is inevitable that the drafting be done with care. I ask the House to be patient and await the amendment that we shall move in another place. The House will have an opportunity to consider it in due course.

My hon. Friend the Member for Grantham asked that we consider not excluding consequential loss, personal injury and third party loss. In the context of the amendment we propose, I agree with him that we shall consider those factors. I take note of what he said about contributory negligence. If we can arrange it, we hope to deal with that as well.

In view of those assurances, I hope that the hon. Member for Edmonton and my hon. Friend the Member for Grantham will feel able not to press their clauses.

5.15 pm

Mr. Graham

I am not one for looking a gift horse in the mouth. All through the debate we have recognised that, although water and sewage have an affinity, especially in the context of the Bill, they must be seperated, for the reasons given by the Minister. We are grateful for small mercies. It is clear, without wishing to cause offence to the Minister, that prior to the Bill it was not in the minds of the Minister or his colleagues to tackle the difficulty of proving negligence. The principle has been accepted not only for water but for sewage. We have made great strides. The principle has been accepted and the Minister is asking us to accept—which I do—that there are practical difficulties in producing a satisfactory form of words.

As my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) said, there are consequencies arising from what might appear to be a simple amendment dealing with what should be a straightforward issue. I am grateful to my hon. Friend and to the Minister for acknowledging that and for reminding the House that one should not endeavour to solve only a part of a problem if one can see that it is a major problem.

We are disappointed, however, that, in effect, the Minister has implied that, while he can see his way clear to introducing an amendment in another place which will deal with water, when that amendment appears it will exclude any reference to sewage.

However, I am heartened by the Minister saying, in response to my suggestion, that there should be an all-party initiative. I hesitate to use the word "deputation" because the matter needs to be discussed. The initiative should be on a non-party basis to include outside interests. I am thinking particularly of representatives of the National Farmers Union—which has been assiduous in drawing my attention to the problem—the Association of Metropolitan Authorities, and others.

Some time should be taken to consider the best way in which such discussions can take place. The principle has been conceded. The hon. Member for Grantham (Mr. Hogg) mentioned the consequences. The more I listen to the argument—I am a comparative layman on this subject—the more I am willing to acknowledge that we need to be careful, not least to use the right wording. My hon. Friend the Member for Islington, South and Finsbury said that from his experience the subject had been discussed 10 years ago. From other people's experience it has been discussed for many years and the House still has not dealt with it. If not a scandal, it is a sadness that all those outside affected by these issues are still looking towards the House to provide a way out.

In those circumstances I am disappointed that we have not achieved the whole cake. But half a loaf is better than none, and we have the copper-bottomed assurance from the Minister that in another place a form of words will be introduced. We shall scrutinise the amendment with care and, perhaps, have an opportunity of approving the amendment when the Bill returns from another place.

I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.