SEVERN TRENT WATER LIMITED v THE COAL LCA/38/1999

UPPER TRIBUNAL

LANDS CHAMBER

LCA/38/1999

Case No LCA/38/1999, LCA/34-38/1999

Between

SEVERN TRENT WATER LIMITEDApplicant

THE COALRespondent

Before

damage notice given – Coal Mining Subsidence Act 1991 s 3 – burden of proof –

Venue 48/49 Chancery Lane, London WC2A 1JR

Date 16 June 2004

Property: Sewers at, (i), Waterfield Farm, Old Clipstone,, Nottinghamshire, (ii)

Catchwords: COMPENSATION – mining subsidence – damage to sewers – limitation – preliminary issue – knowledge of subsidence damage – whether facts from which claimant might reasonably have been expected to acquire knowledge were observable or ascertainable by it more than six years before damage notice given – Coal Mining Subsidence Act 1991 s 3 – burden of proof – approach of sewerage authority to identification of damage – claimant held to have failed to show that it could not reasonably have been expected to acquire requisite knowledge

[1]The preliminary issues that we have to decide concern the entitlement of the claimant, Severn Trent Water Limited, to compensation for damage to its sewers which it is agreed was caused by coal mining subsidence. Severn Trent Water Authority was created under the Water Act 1973 as one of the ten regional water and sewerage companies. It became responsible for the water and sewerage networks within the catchments of the River Severn and the River Trent. Upon privatisation in 1989, Severn Trent Water Authority became Severn Trent Water Ltd. In this decision we refer to both simply as ‘STW’.

[2]There were initially five references in respect of sewers at different locations, but two have been withdrawn. The remaining references, which have been consolidated, relate to sewers at the following locations in Nottinghamshire:(i) Waterfield Farm, Old Clipstone (“Waterfield Farm”)

(ii) Greenwood Drive, Kirkby in Ashfield (“Greenwood Drive”)

(iii) Beauvale Road, Hucknall (“Beauvale Road”).

[3]At the parties’ request the Tribunal ordered that the following preliminary issue be determined:

“For each of the references did the claimant have the knowledge, as defined by section 3(4) of the Coal Mining Subsidence Act 1991 (“the 1991 Act”), required for founding the claim made in that reference, more than six years before notice in respect of that claim was given to the Compensating Authority under section 3 of the Act?”

[4]So far as is relevant, section 3 of the 1991 Act provides as follows:

“(3) The period allowed by this section for giving a damage notice with respect to any subsidence damage is the period of six years beginning with the first date on which any person entitled to give the notice had the knowledge required for founding a claim in respect of the damage. (4) For the purposes of subsection (3) above, the knowledge required for founding a claim in respect of any subsidence damage is knowledge – (a) that the damage has occurred; and (b) that the nature of the damage and the circumstances are such as to indicate that the damage may be subsidence damage; and a person’s knowledge includes knowledge which he might reasonably have been expected to acquire from the facts mentioned in subsection (5) below. 3 (5) Those facts are – (a) any facts which were observable or ascertainable by him; and (b) any facts which would have been ascertainable by him with the help of any expert advice which it was reasonable for him to seek.”

[5]The 1991 Act came into force in November 1991. Prior to that date, claims for subsidence damage were made pursuant to the Coal Mining Subsidence Act 1957 (“the 1957 Act”). The 1957 Act contained no equivalent to the “constructive knowledge” provisions of the 1991 Act. The trigger date for the service of a notice was the date when evidence of the damage first appeared.

[6]Damage notices were served by STW as follows: Waterfield Farm 8 February 1994 Beauvale Road 7 August 1995 Greenwood Drive 7 August 1995

[7]The most recent mining in the vicinity of the sewers was as follows: Waterfield Farm 1985/86 Beauvale Road 1982/83 Greenwood Drive 1976/77

[8]It is accepted by the compensating authority that the damage in each claim may have been caused by mining, whether by the most recent mining or by earlier mining. It is common ground that the damage occurred shortly after mining had taken place. It is agreed, however, that STW did not have actual knowledge of the damage to the relevant sewers until 1994/5. The question that arises on the preliminary issue is whether in each case STW had the required knowledge of the damage more than 6 years before the damage notice was served, ie before the following dates: Waterfield Farm 8 February 1988 Beauvale Road 7 August 1989 Greenwood Drive 7 August 1989

[9]STW accepts that it was aware that the relevant sewers were located in areas which were being mined. It knew that mining was taking place as a result of generalised notices of intended mining that were issued under section 2 of the Coal Authority Act 1975, together with the regular inspections of the NCB’s plans showing details of the mining that was currently under way or proposed. It denies that either that knowledge or any previous instances of damage should have caused it to carry out more investigations into possible further damage than those which it in fact did.

[10]The compensating authority (the Coal Authority) contend that STW ought to have known about the damage to the relevant sewers more than six years before it in fact did, because of 4 knowledge which it might reasonably have been expected to acquire. In summary, the authority rely on three categories of fact which they say gave STW the required knowledge. Firstly, the fact that mining was taking place under or in the vicinity of the sewers. Secondly, other adjacent incidences of subsidence damage, in respect of which STW had previously submitted damage notices to the compensating authority and then executed remedial works. Thirdly, the results of investigations which either were or ought to have been carried out by either its own staff, or by staff of its agents or professional consultants. The statutory provisions and the burden of proof

[11]In the provisions, which we have set out above, reasonableness comes in at two points. The first is the provision in subsection (4) that a person’s knowledge includes knowledge which he might reasonably be expected to acquire from the facts mentioned in subsection (5). The second is the reference in subsection (5)(b) to expert evidence “which it was reasonable for him to seek”. Subsection (5)(a) on the other hand – “any facts which were observable or ascertainable by him” – is not qualified by any express reference to reasonableness. This produces the potential problem that, since all sewer damage is, as we understand it, capable of being identified by CCTV inspections and levelling surveys that the sewerage undertaker is able itself to carry out, it could be said that the fact of damage to a sewer would always be ascertainable by the sewerage undertaker, and thus a claim would always be statute-barred if it was not made within 6 years of the damage occurring; but the cost of surveying on a regular basis all the many thousands of kilometres of sewers that could possibly have been damaged by mining subsidence would be prohibitive. Mr Darling recognised this problem, and it was no part of the authority’s case that subsection (5)(a) was to be treated as operating in this way.

[12]Mr Harding submitted that the reference was concerned with what ought reasonably to have been done by STW and whether, as a result STW ought reasonably to have known that damage had occurred. What was reasonable, he said, was to be judged, firstly, against the standards of a reasonable regional water authority and, secondly, in the light of all of the circumstances at the time when the events alleged to have given rise to constructive knowledge took place. Mr Darling submitted that the assessment of reasonableness should not be limited by reference to a reasonable water authority. The question of reasonableness had to be taken in the round. The fact that all water authorities behaved in the same way would not of itself make the behaviour of this one reasonable. It was perfectly possible that all water authorities were behaving unreasonably. Mr Darling noted the two-stage introduction of reasonableness in the statutory provisions: whether it was reasonable to instruct an expert and whether it was reasonable to expect STW to acquire the relevant knowledge from what he termed “the facts in the basket” – the fact of mining having taken place and damage that had actually been identified and made the subject of claims. No expertise was needed in order to detect damage through the use of CCTV, and the question therefore was whether STW ought reasonably to have acquired the relevant knowledge in the the light of the facts that were known.

[13]In our judgment it is right to approach the question of reasonableness by reference to the standards of a reasonable sewerage undertaker. The question requires consideration at two stages – firstly in determining what general approach to the identification of damage to sewers in its system a reasonable sewerage undertaker would adopt and, secondly, in deciding in relation to the particular facts of relevance to each of the present claims whether STW, acting 5 in accordance with a reasonable general approach, ought reasonably to have discovered the damage more than six years before the damage notices were served. Both the general approach and the particular facts and their implications were the subject of evidence, and we will return to the two-stage consideration of reasonableness after we have summarised that evidence.

[14]In his written closing submissions Mr Harding argued that, when considering all the circumstances, the reasonableness of STW’s action had to be judged in the light of the then current statutory scheme for obtaining compensation in respect of coal mining subsidence. Before the 1991 Act came into operation, the statutory scheme was that in the 1957 Act, which identified as the trigger date for the service of a damage notice the date when evidence of damage first appeared. It thus provided no reason for STW to go looking for damage, since its right to claim compensation was preserved until the damage became evident. The Coal Authority, Mr Harding said, could not sensibly seek to apply the standards of the 1991 Act to actions taken while the 1957 Act was in force. In the course of the oral amplification of his closing submissions, however, Mr Harding accepted that whether it was reasonable to make enquiries about possible subsidence did not turn on the prospects of obtaining compensation for remedying such damage as might be found. We consider that Mr Harding was right to make that concession. What it is reasonable for a sewerage undertaker to do to ensure that its sewerage system is suitably maintained cannot be conditioned by the nature of any entitlement it may have to have the cost of repairing a particular type of damage paid for by another person. The only exception to this, we think, is where delay in identifying damage might increase the liability on that other person. But simply because, under the legislation providing for such liability, the claim is preserved until the damage is discovered, cannot in our view be seen as justifying a less active approach to the identification of damage than a sewerage undertaker would reasonably adopt to ensure that its sewerage system was suitably maintained.

[15]Mr Darling submitted that the burden of proof under section 3 of the 1991 Act was on STW. Where six years had elapsed from the occurrence of the damage it was, he said, for the claimant to show that he only acquired the requisite knowledge less than six years before the claim was made. He relied on Crocker v British Coal Corpn (1995) 29 BMLR 159. That concerned a personal injury claim and the particular statutory provisions of relevance were sections 11 and 14 of the Limitation Act 1980. The issue was whether the claimant had knowledge (under section 14(1)(a) and (b)) that her injury was significant and that it was attributable to the negligence of the defendant. Thus the issue related to the actual knowledge of the plaintiff. Section 14(3) contains a provision relating to constructive knowledge similar to that contained in the provision of the 1991 Act that we have to consider, but no issue of constructive knowledge arose. However, in a full review of the relevant authorities, Mance J referred to a passage in the judgment of Mitchell J in Gascoine v Ian Sheridan & Co [1994] 5 Med LR 437 at 441:

“The burden on the plaintiff is to show, on the balance of probabilities, that her cause of action came into existence on a day within the limitation period. Once that is demonstrated then the evidential burden moves to the defendants – they in turn must demonstrate that, in truth the cause of action arose at some earlier date by virtue, for example, of constructive knowledge on the part of the plaintiff: Nash v Eli Lilly & Co ((1992) 14 BMLR1 at 13, [1993] 1 WLR 782 at 796).”

[16]Having quoted this passage, Mance J went on: 6 “It is clear from the reference to the effect of constructive knowledge that Mitchell J is, as a matter of shorthand although not strictly accurately, speaking of knowledge under s 11 as if it were an element in the accrual of the cause of action. His first sentence therefore reaffirms the legal burden on a plaintiff to prove that knowledge (where material) only arose within the three years preceding the writ. His second recognises that an evidential burden may exist on a defendant to rebut the plaintiff’s case, by, for example, adducing evidence to show (no doubt after pleading) constructive knowledge. Taking this as the correct interpretation of Mitchell J’s summary, there is in my judgment much to be said in favour of the analysis which it adopts. The legal burden rests throughout on the plaintiff, whether the issue is when the cause of action accrued or when the plaintiff first had knowledge of the facts in the sense identified in s 14. The concept which the authorities have called ‘constructive knowledge’ is by definition in s 14(3) one aspect of ‘knowledge’. The date of first knowledge depends as much on knowledge which the plaintiff might reasonably have been expected to acquire from(a) facts observable or ascertainable by him or

(b) ascertainable (subject to the proviso) by him with the help of medical or other appropriate expert advice as it does on actual knowledge. An issue arising under s 14(3) is, however, apt to involve an evidential burden on a defendant, at all events if there is nothing in the plaintiff’s own case or evidence to raise the issue, although in some respects, for example in relation to the words ‘so long as he had taken all reasonable steps to obtain (and, where appropriate, act on) that advice’ in the proviso where they became material, it may be easy to envisage both the legal and an evidential burden on a plaintiff.”

[17]In our judgment section 3 of the 1991 Act, as it falls to be applied in the present case, imposes the legal burden on the claimant but provides for a shifting evidential burden of proof. It is for the compensating authority to establish matters which, they say, would constitute facts for the purposes of section 3(5) and from which they assert that the claimant could reasonably have acquired the knowledge required for founding a claim. If they do so the burden is then on the claimant to show, in relation to such matters, that it could not reasonably have been expected to acquire the requisite knowledge from them. In the present case the authority have identified the matters that they say led to STW having the required knowledge for the purposes of section 3. They consist of the fact of mining having occurred in the vicinity of the sewers, the techniques available to STW for the discovery of damage, previous claims in the vicinity of the sewers, and complaints and records of flooding. Evidence of witnesses

[18]For STW Mr Harding called four witnesses of fact, namely Mr A B Loy, a mining/claims analyst employed by STW; Mr D C Wilshaw, FRICS, IEng, AMIMM, a partner in Wardell Armstrong, STW’s mining consultants; Mr R C Draper, a former employee of Mansfield District Council and Mr G Burden, an engineer employed by Newark and Sherwood District Council. Both local authorities acted as sewerage agents for STW. He also called two expert witnesses, namely Mr C V Knipe, BSc, CEng, CGeol, MIMMM, FGS, senior partner of Johnson Poole and Bloomer, who dealt with mining issues and Mr G F Read, MSc, CEng, FICE, FIStructE, FCIWEM, a director of Deakin Walton Limited, who dealt with sewerage issues. 7

[19]For the compensating authority Mr Darling called as a witness of fact Mr K Blackburn, MCIOB, MBEng, until recently employed by International Mining Consultants, who investigated subsidence claims on behalf of the compensating authority. Mr Darling’s expert witness on mining was Dr P Carr, BSc, PhD, CEng, FIMMM, head of mining at WS Atkins Consultants Limited and his sewerage expert was Mr R Engledow, IEng, ACIWEM, a principal engineer with Atkins Design Environment and Engineering.

[20]Mr Loy said that he had a background in civil engineering. When he first joined STW as a mining liaison engineer in July 1988 he inherited approximately 300 coal mining subsidence claims, which all related to claims under the 1957 Act. The total value of those claims was in the region of £10m. Since then STW had submitted approximately 230 claims against the Coal Authority and British Coal to a value of approximately a further £6.8m. Against all these claims British Coal/the Coal Authority had paid in the region of £13m.

[21]Mr Loy said that, following STW’s creation, it assumed responsibility for management of the sewerage systems. This had previously been carried out by local authorities. As the local authorities had detailed knowledge of the systems in their area, it was decided that STW would continue to employ them to maintain and manage the sewerage networks within their respective administrative areas. This continued until about March 2000, when STW began to carry out these functions itself.

[22]Before Mr Loy was appointed by STW there was no central management of subsidence claims. Claims relating to subsidence damage to sewers were pursued for STW by the local authorities as part of their management duties. Claims relating to water mains and the distribution system were generally pursued by STW’s own distribution staff. There was little, if any, communication of information on subsidence damage between those responsible for sewerage and those responsible for water mains, as they worked for different organisations, and there was no technical need for each to be kept aware of what the other was doing.

[23]The report that eventually resulted in Mr Loy’s appointment had found that the procedures which STW formally had in place had been “quite good at finding damage, quite good at serving the notices on time and even quite good at doing repairs that were necessary”. The reason it had been considered desirable to employ a single person with overall responsibility for subsidence damage claims was because of STW’s poor record in persuading the compensating authority to reimburse its expenditure on repairs necessitated by mining subsidence.

[24]Mr Loy said that STW never considered that it needed expert assistance to determine whether damage to its sewers and other installations might have been caused by coal mining subsidence. When damage was found, its location was compared with that of known mining. If it was in an area where mining had taken place, and the damage was of a type consistent with coal mining subsidence, this was considered sufficient for STW to make a claim for compensation.

[25]With one exception in 1995, no inspections were carried out where sewers were not considered to be critical to the operation of the system, as it was felt that there was no point in 8 adding inspection and analysis costs to the repair bill. In the case of sewers which were critical to the proper operation of the system, STW carried out a programme of inspections between 1984 and 1994 by way of drainage area studies (“DASs”). STW was the first of ten regional water and sewerage companies to complete such an appraisal. The purpose of these inspections was not to find whether STW had claims in respect of coal mining subsidence, but rather to ascertain the condition of these critical sewers. When deciding when the various sewers were to be the subject of a DAS, the fact that mining was taking or had taken place in the area was one of the factors that STW took into account, as sewers in such areas were more likely to be in need of work.

[26]STW investigated its sewerage systems in a systematic fashion. There were some 17,000km of sewers in the East Midlands area alone, of which 2495km (15%) were examined as part of DASs. Even at this level of coverage, these studies were expensive. To survey every single sewer which might be damaged by a single coal panel under a built-up area might entail a survey (both internal, by CCTV, and external, by levelling) of up to 100 km of sewers. This could cost between £100,000 and £150,000. In 1991 there were around 28 deep coal mines in the Severn Trent area. On average, each would be working two or more faces at any time. The cost of surveying only once every sewer potentially affected by mining would therefore be up to £8.5m. This would be the equivalent of carrying out almost 300 typical subsidence remedial schemes. By comparison, the current budget for the DAS-type surveys for strategic sewers for the period 1995 to 2005 was £12m and STW’s total average annual expenditure on maintenance of sewers was only about £25m. STW considered that spending in the region of £8m on investigations, with no guarantee of any recovery of the costs incurred, would not have made sense either from a commercial or an operational point of view.

[27]Mr Loy’s role in STW related to the processing and management of claims. He was not able to predict where and when damage might occur on STW’s sewerage network, except in very general terms. He usually became aware of such damage only when there was some evidence to show that damage may exist, such as surface flooding.

[28]In the Clipstone/Edwinstowe area alone (the location of the Waterfield Farm claim) STW had over 60 km of sewerage installations. It would not have been commercially prudent to carry out investigations at a cost of over £1,000 per km (excluding subsequent processing of the data obtained) in order to ascertain whether damage might have occurred due to coal mining. In cross-examination, however, Mr Loy accepted that this cost could have been substantially reduced if he had carried out some basic calculations of where the subsidence was likely to be most severe and then made some spot checks.

[29]The Waterfield Farm claim related to the main trunk sewer running from Mansfield to the Edwinstowe sewerage treatment works. It was a combined sewer, carrying both foul and surface water. Its diameter was approximately 45 cm. Mansfield District Council (“MDC”) prepared a DAS for the Clipstone/Edwinstowe area in 1991-1992. This covered the Waterfield Farm area. The surveys for the study were carried out in 1990, but did not discover any problems at Waterfield Farm at that time. However, the subject sewer crossed farmland and some of the manholes were buried under fields, so that it was difficult to locate them. As a result, neither the CCTV nor levelling surveys were completed over the section at Waterfield Farm where the problems were eventually found. 9

[30]Although the DAS did not identify any structural or hydraulic problems with the Waterfield Farm sewer, it did state that most of it showed overloading (peak flow greater than capacity). In addition, the computer model produced flooding under certain simulated rainfall conditions at one manhole. In relation to that location the DAS indicated that there was no record of actual flooding having been reported, although the inspection revealed evidence of surcharge and flooding. The Clipstone/Edwinstowe DAS did discover some damage to a nearby trunk sewer in farmland known as Forge Bridge/River Maun. As a result, Mr Loy served the appropriate damage notice on 18 October 1990 in respect of a loss of gradient and possible structural damage there.

[31]In the light of the Forge Bridge claim and the conclusions of the DAS, Mr Loy decided to have further investigations carried out in the area of Waterfield Farm. The levelling surveys were carried out by Newark and Sherwood DC (“NSDC”) as sewerage agents. A company called Insight Surveys was engaged to carry out a CCTV survey. The initial levelling suggested that the sewer had moved. Since this was typical of subsidence damage, a damage notice was served on the compensating authority on 8 February 1994.

[32]The Beauvale Road claim related to public sewers in Beauvale Road, Beauvale Crescent, Abbots Road and Whyburn Lane in Hucknall. The damage to the sewers was first discovered in March 1995 as part of a pilot CCTV survey of minor, non-strategic sewers in Coalville, New Swannington, Hucknall, Huthwaite and Kirkby in Ashfield. The 1995 pilot survey related entirely to non-critical sewers. Mr Loy explained that the claimant had been concerned that the compensating authority would interpret the 1991 Act as precluding claims made more than six years since the last mining in the area. On 4 April 1995 Mr Loy prepared a paper outlining the background to and the results of the pilot study. He recommended that damage notices should be served on the compensating authority in respect of the damaged sewers which had been discovered in the Ashfield district. If they were successful, further surveys of minor sewers in other mining “hot-spots” should be undertaken on a rolling basis, with a view to completing them within six years of the 1991 Act coming into force. The paper correctly anticipated that the compensating authority might reject the damage notices on the basis of the time elapsed since the last mining in the area. In that event Mr Loy recommended that “the case(s) should be pursued in arbitration/litigation after legal advice has been sought.”

[33]The locations for the survey were chosen because they were areas with sufficient lengths of non-strategic sewers which were likely to have been affected by mining subsidence. They were initially chosen by Mr Loy on the basis of a brief consideration of the density of recent mining panels in built-up areas. He then went to the local sewerage agencies to find out if there were any known problems with the sewers in the areas that he had chosen, or whether the sewers in those areas had been recently re-laid.

[34]The five areas studied produced two claims, both of which form part of this reference. The claims related to 700m of sewers out of 4,091m surveyed, or 17%. The study cost £2,440, excluding STW’s own supervision costs. Mr Loy did not consider that an exercise which found damage in only 17% of the sewers surveyed, and none for which the compensating authority accepted liability, was a success. Even had they accepted liability, they would only have offered to pay 17% of the direct costs of the survey. Since a survey of the whole area 10 would have cost more than £9m, and taken 20 years to complete, the compensating authority would have contributed only about £1.5m to the survey costs, leaving a shortfall of £7.5m.

[35]The Greenwood Drive claim related to public sewers in Greenwood Drive, Kirkby in Ashfield, 225mm in diameter. The damage which led to this claim was discovered in March 1995, as part of the pilot study of non-strategic sewers in mining areas which resulted in the Beauvale Road claim. The nature of the damage identified was structural damage to the pipes. STW submitted a damage notice on 7 August 1995. The compensating authority rejected the claim by a letter dated 23 November 1995. They pointed out that the area of Greenwood Drive was subject to a claim by STW dated 4 July 1979, which had been discharged by the NCB by a payment for repairs which were incorporated in the West Kirkby Subsidence Remedial Works Scheme. They also said that they considered that STW were aware of mine workings in the Greenwood Drive area in 1979 and therefore any claim was statute-barred. STW replied to this letter on 20 February 1996 to the effect that the previous claim and the West Kirkby Subsidence Remedial Works Scheme related to sewers on a completely different system. They accepted, however, that one section of sewer in Highfield Avenue might have been included in the earlier claim and they agreed to omit it from the Greenwood Drive claim.

[36]Mr Loy explained the involvement of Wardell Armstrong (“WA”) in advising STW on mining related matters. WA were first engaged by STW as regional mining consultants in 1986, since when they had been given 30 local briefs. Only four of these specifically dealt with sewers and they were all issued before Mr Loy joined STW. They were required to obtain mining information to aid interpretation of DASs. WA were not asked to investigate or advise on the condition of sewers. Fourteen of the local briefs were produced for the purpose of the eastern division overview in 1988. STW provided WA with a scale plan of the eastern division, on which STW marked “strategic installations”. These comprised pumping stations, sewage pumping stations, water reclamation works, strategic water mains, land drainage pumping stations, reservoirs, booster pumping stations, water towers and boreholes.

[37]WA were asked to inform STW of all mining which had taken place in the six years prior to the initial report and all planned future mining. The report was then to highlight any strategic installations shown on the plan which had been undermined in the previous six years, or which may be affected by future mining. The initial report had since been the subject of an annual update by WA. With one (irrelevant) exception, WA had not been informed of any additional strategic installations beyond those contained in the original brief. Consequently, none of the sewers the subject of the current claims had been included in WA’s report. Sewers were not included in the reports produced by WA for two reasons. Firstly, preventive works were generally impractical, as neither structural nor hydraulic damage could be predicted with any accuracy, especially with regard to position. Secondly, there was no operational justification for incurring the additional costs of the necessary surveys and analyses. WA’s reports were sent to STW’s various operational offices as a guide to potential future problems, to assist with the organisation of pre-mining surveys of strategic installations, where this was considered appropriate. In fact, very few such pre-mining surveys were undertaken.

[38]Mr Loy said that in the mid to late 1980s STW sought to develop a code of practice in conjunction with the British Coal Corporation, to streamline the recovery of compensation for damage caused by mining subsidence. This exercise was never completed although certain 11 aspects, including the recovery of design and supervision fees as a proportion of the cost of works, were agreed and had been relied upon on a number of occasions.

[39]Mr Loy said that the total length of public sewers within the Severn Trent region was 53,325 km. Approximately 15% of these were classed as “strategic”. As at 30 September 1998, there were 2,495 km of strategic sewers (14.6%) and 14,539 km of non-strategic sewers (85.4%) in the East Midlands region alone, ie the area covered by the three subject claims. Due to access difficulties, it had generally proved impossible to inspect even the full strategic system. The percentage of sewers actually inspected in the studies had therefore been around 12-13%. The notion of strategic sewers had been introduced to concentrate effort on those sewers which were most likely to fail and/or potentially cause most disruption on failure, that is, where the consequences of hydraulic or structural failure were sufficient to warrant the cost of pre-emptive strategic inspection and analysis.

[40]Mr Loy said that, as far as he was aware, STW was the only water services company in the UK to have completed a comprehensive assessment of its strategic sewerage network. Since 1995 it had been carrying out drainage area management studies (“DAMS”). These used the nationally recognised definition of “critical sewers” in place of its own notion of “strategic sewers”. This definition was taken from the Sewer Rehabilitation Manual (“SRM”), produced by the Water Research Centre (“WRC”), and related to sewers with the most significant consequences in the event of failure, taking into account whether the cost of post-failure rehabilitation exceeded that of planned renewal.

[41]STW’s on-going assessment process had been carried out as follows: 1984-1994 261 DASs covering strategic sewers in systems serving populations over 10,000 1990-1995 80 Rural Asset Management Plan Studies (RAMPS) covering strategic sewers in all areas not included in the DAS studies. 1995-(2005) 341 Drainage Area Maintenance Studies (DAMS) revisiting both the DAS and RAMPS studies.

[42]Mr Loy said that the only strategic sewers included in the subject claims were the one at Waterfield Farm and one short section (about 50m) in Beauvale Road, between manholes 291 and 292. The combined DAS/RAMPS studies took 11 years to assess just STW’s strategic sewers, which were about 15% of the total. On a pro-rata basis it would take over 70 years to cover the whole network, even if this were a cost-effective method of managing the sewerage system.

[43]In a supplementary report Mr Loy described STW’s methods of recording complaints. Prior to approximately 1989/90 STW operated the CRIES system which was replaced by the SCARS 1 system for the entire network. In approximately 1994/95 SCARS 1 was replaced by SCARS 2. To the best of his knowledge CRIES data was no longer available. Some SCARS 1 data was available but it was not a complete record. All available SCARS 1 and 2 data relative to the references had been disclosed by STW. 12

[44]Mr Draper said that he was registered as an incorporated engineer with the Engineering Council and was an associate member of the Institution of Civil Engineers. He was employed by MDC as a technical assistant from August 1976 to October 1977; Ashfield District Council (“ADC”) as an engineering technician from October 1977 to October 1979; MDC as an engineering technician from October 1979 to January 1988; Amber Valley District Council as a senior engineering technician from January 1988 to April 1990; MDC as a team leader– sewerage strategy from April 1990 to April 2000 and STW as a senior modeller in the asset planning and investment department from April 2000 to March 2001.

[45]He said that under the sewerage agency agreement between STW and MDC, the day to day management of the sewerage area within MDC’s administrative boundaries was under MDC’s control. This extended to capital and revenue matters. Subsidence damage investigation would be a revenue matter, whilst major sewer repairs would be a capital matter. All newly created problems were reported to STW liaison engineers and all repairs and major schemes were carried out with their approval.

[46]The investigation by MDC into subsidence damage was purely reactionary to reported incidents. He did not remember that MDC had a policy of looking for subsidence damage. There was not the available budget or the manpower to undertake investigations of this nature in relation to an administrative area that was being consistently undermined. Until the late 1980s there were six or seven active collieries within or around MDC’s administrative area alone.

[47]Mr Draper worked in the drainage section of the technical services department, which managed the agency arrangements with STW on behalf of MDC. He was one of four technicians who worked with a number of engineers. He thought that the annual budget for subsidence monitoring was in the region of £10,000. MDC would usually be made aware of problems within the sewerage network by contact from a member of the public who was experiencing flooding or blockage, identification of a problem by sewer maintenance crews or by a complaint that sewage was polluting watercourses.

[48]To assist MDC in obtaining a better understanding of where the mining was taking place, Mr Draper and others from MDC would visit British Coal’s records office at Edwinstowe House (which covered the north Nottinghamshire area) to take tracings of the mining plans. This would provide a first point of reference if any problems were notified and would enable MDC to consider whether coal mining subsidence was a possible cause.

[49]Mr Draper said that the responsibilities of MDC and NSDC under the agency arrangements were restricted to their respective administrative areas. If a damaged sewer were discovered in its area, MDC would inform STW but, so far as he was aware, no notification would have been given to NSDC.

[50]Mr Draper would prepare a “1957 profile plan” to support a claim for subsidence damage. Such a drawing was prepared following analysis of CCTV data and contained much information. It was used to determine the extent of the compensating authority’s liability to restore sewers which had suffered reduced gradient damage. The compensating authority 13 would not accept any responsibility for remedial works which provided invert levels or gradients better than the 1957 profiles. A 1957 profile calculated the notional effect of mining on the sewer. It was done by using formulae and guidance contained in the Subsidence Engineers Handbook (“SEH”), which was prepared by the NCB. Whilst an engineering background was necessary to use it, the SEH did not require specialist knowledge of mining. Mr Draper did not hold any ground engineering or geotechnical qualifications, but he had applied the principles contained in the SEH. The engineer looked at the depth, width, thickness and direction of a mining panel (based solely on the information obtained from Edwinstowe House) and applied this to the formulae. It was not precise. No account would be taken of overlying ground conditions. Its purpose was to provide a starting point to begin to appreciate the effect of the subsidence on the sewer and the likely remedial costs. It was never used to predict any areas of actual subsidence damage.

[51]The main sewerage network within MDC’s administrative area extended to some 450km of sewers of different kinds. To produce 1957 gradients for the entire network would have taken several years at least. Moreover, the same length of sewer could be undermined by any number of different seams. It would also require CTTV surveys, for which in 1984 the average cost was between £350 and £500 per day. The amount of time needed for, and thus the cost of a CCTV survey would depend on the condition of the sewer being surveyed.

[52]Mr Draper said that a DAS was a largely hypothetical exercise. Actual evidence of problems would usually be required before any substantive action could be taken and resources committed. DASs were not carried out to look for the effects of coal mining damage, but if damage were found it would be mentioned in the structural analysis section of the report.

[53]From around 1985/1986 British Coal began rejecting claims on the basis that the damage had not been discovered within six years of the particular mining taking place. In an effort to counter such rejections, in 1985/86 MDC began serving damage notices for the entire lengths of sewer that had been undermined by a particular mining panel. MDC would consider the mining information obtained from NCB against the sewer records and would serve damage notices on British Coal for all the sewers within that panel of extraction. This was done because British Coal considered that damage had occurred on the date that the panel was extracted. As the sewers were buried, damage would not become apparent for some time and this procedure was designed to prevent such rejections. There was no particular science to this approach, but following service of the damage notice the condition of the sewers referred to on the damage notice and/or the accompanying plan would have been investigated. British Coal did not like this policy.

[54]Mr Burden said that he joined NSDC in July 1980 as a trainee engineering technician in the engineering services section of the technical services department. He is qualified to HNC level. He progressed to become a project engineer and remained in the engineering services section until it was dissolved in 1999, largely due to the termination of the sewerage agency arrangement by STW. He then joined the council’s environmental/technical services department. 14

[55]Mr Burden described how, until 1988/89, he and his colleagues would obtain information on coal mining from the NCB’s offices. He rejected the suggestion that their mapping of the location of mining activity, together with their knowledge that mining was taking place, enabled them to predict where subsidence damage might occur. Their job was to react to incidents that were notified to them, usually by members of the public. They did not have a budget for or the manpower to carry out surveying exercises of those extensive parts of their administrative area which were being undermined. They all knew that mining was taking place in the area, but the visits to the NCB provided the information to assess the possible causes of problems once they had occurred.

[56]In cross-examination, Mr Burden said that he was not familiar with the provisions of the SEH.

[57]Mr Wilshaw said that he had been with Wardell Armstrong (“WA”) since 1988 and a partner since 1990. He specialised in mining subsidence and ground engineering, having previously been employed by the NCB for 17 years.

[58]Mr Wilshaw said that his firm’s original instructions from STW in 1988 were twofold. First, to map all of British Coal’s post-1982 workings lying within the eastern division boundary, which incorporated the Nottingham, Sherwood and Leicester districts. STW did not ask WA to go back further than 1982. Secondly, to advise STW about any future workings by British Coal which might affect their strategic installations. The maps were a record document, whilst the reports provided STW with WA’s analysis of the identified mining circumstances relating to the strategic installations. WA’s brief specifically referred to the installations marked by STW, which initially did not include any sewerage systems within the eastern division. Subsequently, STW included a few strategic sewerage systems on their master plans, but these did not include the subject sewers.

[59]WA’s initial report was dated July 1988 and was limited in its scope due to the enormous volume of mining information. It concluded that, of the 511 strategic installations identified by STW, and of the 400km of large diameter water pipelines, there were 153 installations and 71 pipelines which in WA’s opinion lay within influencing distance of mining.

[60]STW’s installations were divided into: category A – within influencing distance of post- 1981 mining; category B – installations affected by post-1981 mining and mining planned up to December 1989; category C – installations which might be affected by future mining, after December 1989. The installations were further subdivided by WA into 1 (large installations), 2 (small installations) and 3 (pipelines). There was no physical inspection by WA. Their work was purely a desktop exercise, but they advised on the need for inspections.

[61]The schedules to the report dealt individually with each of the installations that had been identified by STW on the master plan and which WA had advised were within an area which had been affected or might be affected by mining in the future. WA provided STW with replacement drawings where the mining details had been revised since the previous report was published. The report itself would only refer to the revised current and future mining 15 circumstances. The updated maps would show the cumulative mining position, but would only colour the workings within the preceding six years, plus the future workings.

[62]This information would be presented to STW in the subsequent reports by a series of replacement maps, on which the revised mining situation would be shown. WA’s advice would be updated to reflect the changed position. WA were not instructed to, and did not, examine any buildings or actual installations as part of the annual review. Where subsidence damage was found by STW and a claim submitted to British Coal, WA would advise STW on the claim if asked to do so. In 1993 the geographical extent of WA’s brief was extended to cover the northern division (including Stoke-on-Trent, Derby, Leicestershire and north Derbyshire) and the southern division (Warwickshire). The nature of the brief remained the same.

[63]As part of its data collection exercise, WA visited British Coal headquarters at Edwinstowe, Mansfield, to collect data and to identify the progress of workings. WA obtained details about future mining from RJB Mining (UK) Ltd and Coal Investments Ltd, who were the principal licensed operators within the areas under consideration. At no time did WA’s brief extend to a consideration of sewers in general or the subject sewers in particular. The only sewers considered by WA were pressurised sewage rising mains, which were considered by STW to be strategic installations. WA were issued with a total of 30 briefs from STW, of which 15 were in relation to the original 1988 report and subsequent annual updates. The remainder were to provide specific advice relating to the assessment of liability for damage, the anticipated impact of future mining and other miscellaneous matters.

[64]In cross-examination, Mr Wilshaw said that the work which WA took on in 1988 had to some extent been previously undertaken in part by district councils, but not in a properly structured manner. He added that STW had felt in the 1980s that they should “improve their act” because “they were having a rather hard deal”. In re-examination he said that in the early 1980s British Coal’s costs for subsidence were escalating rapidly. In an attempt to control them they rejected many claims, mainly on the grounds of limitation and STW felt that there had been a change in the way their claims were being dealt with.

[65]Mr Knipe said that he joined Johnson Poole and Bloomer in 1968 as senior geologist, becoming partner in 1975 and principal in 1978. During this period he obtained wide experience of all aspects of ground engineering and engineering geology, mining and minerals, geological, geotechnical and hydrogeological investigations, waste management and land filling, land reclamation and site development. He had been involved in investigating mining subsidence and property damage cases in the various British coalfields over the last 30 years.

[66]Mr Knipe said that each of the lengths of the subject sewers had been affected by numerous phases of past underground coal mining during their lifetime. The most recent panels of mining underlay or crossed numerous previous areas of extraction. He identified the coal workings at each of the claim locations and made calculations of the amount and nature of the subsidence caused. In relation to Waterfield Farm he said that there were three relevant seams, the Top Hard, the Deep Soft and Low Main (Tupton), and there were 11 separate workings from the 1950s to 1985/87 that could have caused subsidence damage along 16 particular sections of the sewer. Simply from a consideration of the most recent mining it was impossible to say how much subsidence, distortion and strains a pipe or culvert had been subjected to and whether the latest mining was likely to have caused structural damage or significant hydraulic impairment. His experience in preparing the evidence for this case had demonstrated just how difficult it was in the context of the multiplicity of mine workings in the Nottinghamshire coalfield to predict future subsidence from impending workings or to analyse past movements, even for a single specific location. It had also shown how wholly impractical it was for a utility company like STW with a network of sewers and pipes totalling ten of thousands of miles to consider in detail every potentially-affected sewer or pipe run for every new panel of coal working.

[67]Mr Knipe said that, to follow the logic of the compensating authority’s argument, in the case of just a few streets in the Beauvale Estate at Hucknall, STW or its forerunners would have had to carry out physical investigations to look for damage soon after mining in the 1950s, 1961, 1968, 1979, 1982 and 1983, when there were workings directly under some or all of the estate, and perhaps on a number of intermediate occasions when there were other workings close by. But the Beauvale Estate was just one tiny area in the whole coalfield, and the Nottinghamshire coalfield was just one of several within the territory of STW which had active collieries during the same period.

[68]At the start of 1988, when STW first engaged WA to act as its special mining adviser, Mr Knipe believed that there were 42 active coalmines operating within STW’s territory. Each would have had, on average, two or three faces active at a particular time, and each panel would have taken 1½ to 2½ years to complete, so collectively the 42 collieries would have had, say, 50 panels starting and finishing in any one year. Assuming that the average depth of working was around 750m and the average area that might be affected by mining subsidence from a single panel was 250 hectares, then the 50 new panels would affect 12,500 hectares, ie 125 sq km of surface in a year.

[69]Mr Knipe estimated that a typical sewer network in an urban area was about 21 km per sq km, and in a mixed urban/rural area about 7 km per sq km. If these figures were applied to the zone of potential influence of a single typical coal panel below an urban area, his figure of 250 hectares might contain over 50 km of sewers. Then considering the estimated 50 panels in a year at the 42 collieries throughout STW’s territory, and assuming a density appropriate to mixed urban and rural land use, the affected 125 sq km would contain perhaps 875 km of sewers. He was not surprised, therefore, that STW had considered it was wholly impractical to make general physical investigations of its drainage systems in areas of active coal mining.

[70]The date of this assessment was early 1988, which was effectively the same as the last phase of mining in the vicinity of the Waterfield Farm sewer claim. But in about 1983, the date of the last mining in the Beauvale Road area, there were many more active collieries in STW’s territory and therefore more faces and even more kilometres of potentially-affected sewers. Moreover in 1976/77, when the most recent mining took place in the neighbourhood of Greenwood Drive, there were still more active collieries and working faces. He concluded that at all material times, there was so much active mining in the Nottinghamshire coalfield and the other Midlands coalfields that it was altogether impractical for STW to have made speculative physical surveys of all sewer systems potentially affected by mining. 17

[71]Turning to possible methods of refining the areas of search, the usual method of subsidence prediction available to non-specialists was the SEH, but this was of only limited usefulness. It could not cope with the complexities of multi-seam mining and the practical problems of considering sites and installations at locations and orientations other than along the principal axes of the worked panels. Computer-based analytical methods were required, but these were available only to the coal compensating authority, specialists and academics, and even so the amount of time taken to prepare the models and run the programmes was disproportionate. Moreover the coal compensating authority and its agents had the basic information at their fingertips, whereas any surface property owner would have had to go searching for the information necessary to make subsidence estimates.

[72]Just to collect the data and carry out the numerical analysis for the neighbourhood of the three streets in the Beauvale Estate had taken him several days. If a mining consultancy were commissioned to carry out similar work as part of its ongoing retainer, he would expect the firm to save some time on collecting and collating the mining and geological data, because that would have been done as routine. However, an equivalent or even greater period would be taken up in gathering information about all the drainage systems in the relevant area (local networks as well as strategic sewers), and then it would be necessary to make trial calculations for many more sewer localities within potential influencing distance of the latest mining panel under consideration. The scale of the task would vary, because every panel would have a different history in relation to previous nearby mining workings and there might be fewer or more extensive drainage networks in its locality. His best estimate of the time that would be required to make the analyses and report the findings was of the order of 5 to 8 days per panel, or the equivalent of say £3,000 to £5,000 in professional fees on top of the regular retainer work; there may have been upwards of 50 coal panels to consider in the course of a year.

[73]Mr Knipe referred to the compensating authority’s assertion that, since s 2 notices under the Coal Industry Act 1975 had been published for the general localities, STW should have been aware of the progress of mining operations in the locality. He said that the total history of mining subsequent to a sewer system’s construction was relevant to whether the last phase of workings might have resulted in subsidence damage. In each of the three cases in question, however, much of the relevant mining pre-dated 1975 and therefore pre-dated any s 2 notices under the 1975 Act. Moreover, the s 2 notices covered such wide areas that they gave no practical indication of where the actual workings would take place. Even when an interested party made periodic visits to inspect plans of proposed workings, the general timing and layouts and actual panels of work very often did not follow the indicated programme.

[74]As for the assertion that previous claims in an area should have caused STW to make further investigations or to have taken expert advice, none of the examples quoted by the compensating authority as being relevant to the three subject sewers was in fact caused by the same panel of mining, and the combination of mining circumstances and history that led to subsidence damage at those localities was distinctly different from those at each of the claim sites. There was no geotechnical or scientific reasons for supposing that, simply because mining damage had occurred elsewhere within a few hundred metres of a particular sewer or sewer network, a new panel of work in the same or another seam would be likely also to cause damage and therefore an investigatory survey should automatically be carried out. 18

[75]As for the argument that by retaining mining experts STW should have received advice that would have caused it to survey the sewers, find the damage and submit notices within six years of the date of the last mining, expert or non-expert alike was unlikely to have considered the last phase of mining sufficient to have resulted in subsidence damage. Moreover, it was only by time-consuming consideration of the full history of mining subsequent to construction of the subject structure or installation that a mining specialist might be able to say whether and where mining damage was a distinct possibility and that a physical survey might be worthwhile. In addition, the large number of active coal workings at the relevant time would make it yet more impractical to make such calculations.

[76]Mr Read said that he had had over 50 years construction industry experience, including over 12 years as city engineer, Manchester, during the period when the city centre suffered several major sewer collapses. He currently had responsibility for his practice’s work in the fields of sewerage, land drainage and flooding. He had held appointments with six other local authorities, two of which – Arnold UDC and Doncaster CBC – regularly suffered sewer damage as a result of coal mining subsidence. Arnold UDC subsequently became part of Gedling BC, which is located within the same coal mining area of Nottinghamshire as the sewers.

[77]Mr Read said that from his experience STW’s annual expenditure on sewer maintenance, which equated to £469 per km of sewer, was comparable to that of similar water companies. He said that the first water regulator (OFWAT) was appointed in 1989 following privatisation of the water and sewerage companies and introduced the concept of trends in serviceability to customers (and the environment) in 1994. Previously control had been by the appropriate government department.

[78]The government initially set prices at privatisation in 1984. It devised a framework of quality environmental and economic regulation to ensure consumer protection. In relation to economic regulation the government decided in favour of price capping, to limit the average prices in real terms and provide maximum incentives for cost cutting, while imposing no limits on profitability. Following its creation, as part of its responsibility for protecting the public, OFWAT was charged with monitoring the levels of service to the customers, which included the companies’ response to complaints. Against this background, funding for sewer maintenance remained severely restricted.

[79]Although the water companies had a statutory duty to maintain the condition of their asset base, condition and age were not seen as indicators of the need for capital investment by the regulator. The sole criterion was the ability of the asset to deliver future services (serviceability) to the customer. In Mr Read’s experience the public in general showed little interest in sewers until they failed and interfered with normal life. It was the public’s views and the level of charging which were critical in the decision making process concerning levels of expenditure.

[80]In 1984 the WRC published the SRM which was adopted by all the UK water companies. The recommended strategy was based on concentrating rehabilitation efforts on those sewers where collapse repairs would be very expensive or disruptive to the community at large – the 19 “critical sewers”. Pre-emptive maintenance on these sewers would, it was claimed by the WRC, greatly reduce the risk of such failures occurring and could be shown to be cost- effective. The basic philosophy of the SRM strategy was to provide an acceptable service at lowest cost. The WRC had suggested that the development of DASs as advocated in the SRM could result in sewer rehabilitation solutions significantly cheaper than those produced by more conventional or traditional planning methods, which were essentially reactive in nature and based on repairing the most structurally defective sewers as and when required, rather than concentrating on the critical sewers. The WRC accepted that failures would occur on the non- critical sewers, but the cost of rehabilitation of non-critical sewers following failure would be relatively cheap and non-disruptive. For the non-critical sewers the view was taken that the response to failure, or crisis maintenance, was the most cost-effective strategy to adopt. This policy was adopted by STW.

[81]SRM had gained world-wide recognition as the standard reference work for industry professionals involved in the maintenance and rehabilitation of sewers. It was the basis of day to day maintenance and for strategic long term rehabilitation planning. All the UK water companies were involved in its development and it was an accepted standard throughout the industry. No water company was bound to follow the recommendations, but in view of its wide acceptance they would be unlikely and imprudent not to. In Mr Read’s opinion, it was improbable that OFWAT would have countenanced any alternative.

[82]STW followed the recommendations in the SRM except that, in view of the nature of the area, it broke down the DASs into urban and rural areas, whilst still concentrating on the strategic or critical sewers. Of the three subject sewers, only Waterfield Farm was a critical sewer. It fell within the area covered by the Clipstone/Edwinstowe DAS, which was prepared by the claimant’s local agent, MDC in 1991/92. By 1995 STW was the only water company in the UK to have completed a comprehensive assessment of its strategic sewer network in accordance with the recommendations of the SRM.

[83]Mr Read said that a sewerage system could be damaged by mining operations in two main ways. Its longitudinal gradient could be altered by vertical movement and, secondly, pipes could be fractured or joints opened as a result of compressive or tensile ground strain. In his experience, even in an active mining area, sewerage damage, particularly pipe fracture, did not always materialise. Sewer pipe damage was usually concentrated at pre-formed junctions and at manholes, owing to the extra stiffness there.

[84]The intensity of ground strain varied from point to point and ranged from zero through maximum compression and tension and back to zero in only 100 metres. He would expect this to be a very difficult situation for even a mining expert to predict with any degree of accuracy. In his experience, fractured pipes as a result of mining operations were more common where the sewers were comparatively old. Pipe damage of this type might lead to significant infiltration of ground water, possibly increasing the cost of pumping (if this were involved) or ultimate treatment of the effluent. The pipes also had to deal with traffic vibration, seasonal swelling and contraction of clay soils – factors which in themselves would not necessarily cause pipe failure, but which might do so if the sewer had previously been strained and disturbed by coal mining subsidence. In the areas with which this reference was concerned, sewer pipes were likely to have comprised a variety of different forms of construction. 20

[85]Mr Read considered that endeavouring to predict the extent or type of damage, if any, to sewers as a result of coal mining operations was in no way an exact science, because there were too many unknowns involved. Even if the discovery of damage led to an assessment that similar damage was likely as work on the same coal seams continued, that did not always happen in practice. It had been his direct experience that damage to sewers in one road was caused by a panel being worked, but that the same panel had not caused any noticeable damage to sewers in adjacent roads.

[86]Mr Read then referred to previous damage claims which had been made by STW and which the Coal authority alleged should have alerted STW to conduct further investigations themselves or take expert advice and which, had they done so, would have led them to identify the damage before the start of the six year period. In addition, in the case of the Greenwood Drive Claim, the Coal Authority asserted that the area had been subject to a claim in 1979 which the NCB had accepted.

[87]Mr Read commented on these claims as follows: Waterfield Farma. Newlands Road claim. The damage was 1.8 km from the closest part of the Waterfield Farm sewer, resulted from completely different mining and pre-dated the last mining to have undermined the Waterfield Farm sewer.

b. Mansfield Road claim. The damage was 1.4 km from Waterfield Farm, resulted from completely different mining and pre-dated the last mining to have undermined Waterfield Farm.

c. Squires Lane claim. The damage was 310 m from Waterfield Farm and resulted from completely different mining.

d. Forge Bridge claim The damage was almost contiguous with Waterfield Farm, although the damaged lengths were over 1 km apart. It resulted from completely different mining and its discovery resulted from the DAS which failed to discover damage to Waterfield Farm. This claim led to the investigations which located damage at Waterfield Farm but was within 6 years of the Waterfield Farm damage notice.

e. 15 inch water main claim. The damage was 375m from Waterfield Farm, resulted from completely different mining and was on a pressure main, which behaved differently from a sewer. 21

f. 3 inch water main claim The damage occurred within six years of the Waterfield Farm damage notice, and was therefore irrelevant. Beauvale Road a. Tiverton Close claim. The damage was 0.5 km from the closest part of the Beauvale Road sewer, resulted from completely different mining from that which caused the sewer damage at Beauvale Road and pre-dated the last mining to have undermined the Beauvale Road sewer. b. Whyburn Lane No.4 reservoir claim The damage was 0.4 km from the closest part of the Beauvale Road sewer, resulted from completely different mining and pre-dated the last mining to have undermined the Beauvale sewer. c. Beauvale Estate claim This was not a claim of which STW had any notice and British Coal at that time had concluded that the damage was not the result of coal mining subsidence. Greenwood Drive a. West Kirkby claim The previous claim did not cover the sewers in Lawrence Avenue and Greenwood Drive, which formed the current claim. It related to part of a sewerage system flowing in the opposite direction to the sewers in the Greenwood Drive claim. The damage which caused the current claim was either present at the time of the West Kirkby scheme or it was not. If it was present, it had not “occurred” within the meaning of the contemporary 1957 Act and therefore no claim was possible under that Act. The earliest time that a claim could have been made under the 1991 Act was 7 August 1989. The current damage notice was served within six years of that date.

[88]Mr Read placed considerable weight on the fact that, in relation to the Waterfield Farm and Beauvale Road claims, STW had received no complaints or reports which would have alerted them to the possibility of the sewers being damaged. In cross-examination he accepted that, because of the absence of documents, it was not possible to say whether or not there had been any complaints. He also accepted that the 1991 DAS had referred to overloading of the sewer at Waterfield Farm and that a report on Waterfield Farm dated 23 March 1995 had referred to a “recurring problem caused by lack of capacity”. He did not consider, however, that there was evidence that the problem was sufficiently serious to highlight the need for further investigations.

[89]Mr Blackburn said that he started working for British Mining Consultants (later called International Mining Consultants) in 1988. He was employed to investigate and assess mining 22 subsidence claims, mostly larger claims dealing with sewers, sewerage works, highways and large industrial installations. In January 2001 he moved to Gleeds Management Services.

[90]Mr Blackburn outlined the history of the three subject claims and provided details of previous claims which had been made in the vicinity of each. The damage notice on Waterfield Farm was submitted on 8 February 1994. Following correspondence and meetings between the parties the Coal Authority wrote to STW on 9 March 1998 as follows:

“Further to our meeting held on 2 July 1997, as agreed please find the reason why the authority considers this claim statute barred. As explained in the meeting, the reason for rejection was that the authority consider Severn Trent Water to have reasonable knowledge of the mining six years prior to the submission of the damage notice. In reaching this conclusion consideration was given to the following facts: The last mining to affect the upstream end of the sewer was in 1986 and the downstream end in 1982, some 8 and 12 years before submission of the damage notice. Investigations revealed that other claims in close proximity to this one had been submitted at various times between 1982 to 1990, one claim for Squires Lane sewer was surveyed up to the manhole where this claim joins that run. Accordingly it is considered that Severn Trent Water were aware of mining in this area and, under the 1991 Act, as a person who would have had reasonable knowledge, should have investigated the sewers at that time, when any subsidence damage would have been evident.”

[91]The claim for Greenwood Drive was dated 7 August 1995. The Coal Authority wrote to STW rejecting the notice on 23 November 1995. The reasons given were:

“The area of Greenwood Drive was subject to a claim under the provisions of the Coal Mining (Subsidence) Act 1957 and dated 04/07/1979. It was submitted by Ashfield District Council as agents to Severn Trent Water. The claim was discharged by the National Coal Board by payment for repairs which were incorporated in the West Kirkby Subsidence Remedial Works Scheme. The Mining Reports Office have indicated that no mine workings have affected the area of the claims since 1976. The Coal Authority is of the opinion that a reasonable body such as Severn Trent Water were aware of mine workings in the Greenwood Drive area in 1979 and any damage evident resultant from those workings would now be statute barred and therefore I am unable to recommend that any liability is accepted.”

[92]The Beauvale Road claim was dated 7 August 1995. The Coal Authority rejected the claim by a letter dated 19 June 1996 for the following reason: “The investigations have confirmed that there is no evidence that any coal mining subsidence damage has occurred within the relevant limitation period for making claims. All mining activity in the vicinity of the sewer ceased in 1984.” 23

[93]Mr Blackburn referred to six other claims which had been made by STW within the area of the Waterfield Road claim. They were:a. Newlands Road. Claim on 10 April 1984. This related to the trunk sewer along Newlands Road, upstream of the current claim. British Coal paid £38,395.73 in about March 1993. STW accepted this sum in settlement in February 1994.

b. Mansfield Road Claim on 12 July 1984. A supporting drawing showed details of a survey which extended towards the trunk sewer and the current claim. Settled in February 1994 for £56,156.

c. Squires Lane Claim on 14 October 1987. The sewer from Squires Lane connected with the trunk sewer at manhole 490 and the sewer length between manhole (“MH”) 490 and MH 690 was surveyed for both claims. Settled in June 1994 at £52,020.10

d. Trunk Sewer between River Maun and Railway Claim on 18 October 1990. Immediately downstream of the current claim and along the same trunk sewer. Settled in December 1993 at £68,086.43

e. 3 inch public water main between Clipstone Pumping Station and Waterfield Farm. Claim on 5 May 1988. Settled in September 1989 for £193.82.

f. 15 inch public water main opposite Clipstone Pumping Station. Claim on 20 April 1987. Settled in August 1987 at £4,098.02.

[94]In relation to the Beauvale Road claim, the other claims referred to by Mr Blackburn were as follows:a. No.4 Reservoir, Whyburn Lane, Hucknall Claim in 1982. Immediately adjacent to that part of current claim relating to Whyburn Lane. Claim accepted and damage to reservoir repaired.

b. Tiverton Close Claims in March 1978, July 1980 and June 1981.

c. Beauvale Estate Claim by ADC on 11 May 1987. An STW hydrologist attended a meeting with representatives of ADC at which mining subsidence was discussed as a possible cause.

d. ADC housing claims A number of claims submitted. Limited information available, but repairs undertaken included drains.

e. Other claims to damaged kerbs and 4 inch water main at Common Lane. No detailed information available. 24

[95]In relation to the Greenwood Drive claim, Mr Blackburn referred to the following previous claims:a. Greenwood Drive Claim on 4 July 1979. This related to sewers for Greenwood Drive, Berry Avenue, Highfield Avenue and the rear of Willow Street. The damage notice did not exclude any specific lengths of sewer within the streets named.

b. Sewers in the Kirkby area. A letter dated 17 January 1979 from NCB to Ashfield DC accepted liability for a number of lengths of sewers in the Kirkby area. This related to the sewers on Berry Avenue/Greenwood Drive and Highfield Avenue/Greenwood Drive and also Station Road/Copeland Road, Banks Avenue, The Hill/Victoria Road, Lime Tree Avenue and Chestnut Avenue.

c. West Kirkby Subsidence Remedial Work. A letter dated 5 April 1982 from Ashfield DC to NCB identified that works had commenced in relation to Berry Avenue, Greenwood Drive, Highfield Avenue and Lime Tree Avenue.

d. Main Drainage System to west of Kirkby. An NCB expenditure sheet dated November 1980 indicated that the main drainage system to the west of Kirkby had been investigated by the local authority as agent for STW.

e. Frederick Avenue. Damage notice dated 23 December 1976, relating also to Copeland Road and Sutton Road.

[96]Mr Blackburn said that the subject sewers were sandwiched between these various claims and actually duplicated part of the earlier claim for Greenwood Drive. A similar duplication had been identified in relation to Highfield Avenue, which had resulted in STW subsequently withdrawing that element of the current claim.

[97]It was clear from the survey information on the West Kirkby Subsidence Remedial Work that the sewers along Greenwood Drive had been surveyed. The most southerly point recorded on the drawings was MH K771 at the junction of Lawrence Avenue, which was the northernmost manhole in the current claim. The sewers along The Hill/Victoria Road were also surveyed up to the junction with Greenwood Drive. Mr Blackburn did not know why STW or the local authority had chosen to leave a small section of sewer between these points unchecked, especially as they were originally all on the same system.

[98]In cross-examination Mr Blackburn agreed in relation to the Squires Lane claim that no survey had been carried out between MH 490 and MH 690 of the same nature as that carried out for the rest of the sewer and that STW would not have had knowledge of any damage in that area in 1987. In relation to the lengths of sewer in Greenwood Drive and Lawrence Avenue, he accepted that neither had been repaired as part of the West Kirkby Remedial Scheme and that it was likely that no damage in those sections of those roads had been known about in 1979 and 1980. He also accepted in respect of No 4 reservoir that there was no evidence of any damage to sewers in Whyburn Lane; in respect of the Beauvale estate drainage problems that British Coal’s consultants had concluded there was no evidence that these had been caused by mining activities and, in respect of other claims at Common Lane, that it was possible that they too had been rejected because they were not mining related. 25

[99]Dr Carr said that he had graduated from University College, Cardiff, in 1975 with a degree in mining engineering, and was subsequently awarded a PhD for research, undertaken in conjunction with the Mines Research and Development Establishment, Bretby, into strata mechanics associated with longwall mining. Since 1983, following a period of production experience in the South African goldfields, he had been employed by, or had been a partner with, various firms of geotechnical and mining consultants in South Africa, Australia, Sweden and the UK. In 1997 he joined WS Atkins Consultants as head of mining. In this position he has technical and management responsibility for the majority of Atkins’s mining related projects, excluding the rehabilitation of former mining sites.

[100]Dr Carr outlined the statutory framework regarding notification of the intention to withdraw support for mining operations and for submission of claims for subsidence damage. This included s 2 of the Coal Industry Act, 1975, which required the NCB to give notice of its intentions three months before support was to be withdrawn; the 1957 Act, which provided statutory rights of repair or compensation to owners of land damaged by subsidence, no matter when mining had taken place, provided a damage notice was served within 2 months of the occurrence of damage, and the 1991 Act which introduced the six year time limit for claims.

[101]Dr Carr said that, following submission of a damage notice, levelling and CCTV surveys would be commissioned by STW’s agents to establish the actual nature and extent of the damage. The surveys would be issued to the compensating authority or their agents, and a remediation scheme prepared by the local authority engineers, possibly incorporating improvements to the system. When appropriate, the local authority would prepare a drawing identifying the 1957 profile of the sewer to establish the extent of the compensating authority’s liability for remedial works. This drawing was prepared by the local authority’s engineers, using the methods set out in the SEH.

[102]Prior to about 1986 subsidence claims were investigated by the compensating authority. After 1986, the compensating authority instructed British Mining Consultants Limited, acting as the compensating authority’s agents, to investigate claims on their behalf. Those agents would view the CCTV tapes and carry out an assessment of the structural condition of the sewer, identifying the nature and extent of the damage likely to be due to mining subsidence. The agents would also obtain a mining subsidence report identifying the relevant workings and date of extraction. Subsidence calculations would then be carried out to determine the hydraulic damage to the sewer resulting from the identified workings. The compensating authority then advised STW or their agents whether or not they accepted liability and, if liability was accepted, made a provisional offer of compensation. If the authority were not considered to be liable, either because the damage was not subsidence related, or because the claim was considered to be out of time, a rejection notice would be issued. On receipt of a response from the compensating authority, STW’s agents, or latterly STW’s mining liaison officer would make a recommendation to STW to accept or reject the compensating authority’s assessment. If liability was accepted, and remedial works were to be undertaken immediately, STW’s agents would invite tenders for the remediation work and inform the compensating authority of the lowest tender. If the remedial works were to be deferred, compensation was based on an estimated cost for the works. The compensating authority would then issue a formal offer of compensation to STW accompanied by a form of discharge. Compensation was paid by the compensating authority on receipt of the signed form of discharge. 26

[103]On 21 April 1988, a meeting was held between representatives of STW, the compensating authority and WA at which STW informed the authority of the appointment of WA and divisional mining liaison officers. At the meeting STW expressed the view that it would be preferable for STW and the compensating authority to work together in respect of mining subsidence matters rather than adopt an adversarial approach. It was agreed that Mr Hassall of WA and Mr Wenn of the compensating authority would set down guidelines for submission and acceptance of damage claims. Dr Carr outlined the principal elements of the guidelines. He did not know, however, the extent to which the guidelines had been implemented in practice.

[104]Dr Carr described WA’s involvement in advising STW on the effect of past, ongoing and future mining operations on installations within STW’s eastern division and STW’s pilot study of non-strategic sewers in 1995. He pointed out that, although their maps were produced to assess the impact of mining operations on STW’s distribution installations, WA had commented that they might be used by STW as a general guide to the identification of subsidence-related problems with rivers, streams and sewers.

[105]Dr Carr referred to the two main types of subsidence damage to drainage. He said that hydraulic damage to a drainage system arose from differential subsidence, resulting in a change in gradient, and consequent change in flow velocity and capacity. The change in gradient might be either adverse or favourable, depending on where in the system the subsidence occurred and the mining sequence. Furthermore, any change in gradient might be only temporary. The original gradient might be restored once the face had passed, or an adjacent panel had been extracted.

[106]Dr Carr produced the following table, taken from the SEH, listing the principal types of structural damage, their causes and means of prevention: Type of failure Cause Prevention Beam fractures Uneven resistance of foundations or soil movement, or differential settlement. Caused by mining in extreme cases of shallow workings. Flexible joints and uniform hardness of foundation. Pull fractures Thermal or drying shrinkage of pipe, or site concrete, drying shrinkage or clay soil. Extension of ground through mining. Flexible telescopic joints and gaps in site concrete and pipe joints. Shear fractures Differential settlement of wall relative to pipe or vice versa. Can be caused by fissuring in subsided ground. Flexible joints at a and b and making ab not more than 1m. Thrust Restrained thermal or moisture expansion of pipe Flexible telescopic joints. Spigot End not laid hard up in socket 27 fractures or compression due to subsidence. Leverage fractures Excessive angular displacements. Extreme cases of differential subsidence. Flexible joints. Avoidance of excessive slew when laying.

[107]Dr Carr said that different structural damage criteria applied to flexible and rigidly jointed pipe systems. In flexibly jointed pipes, pipe strain induced by ground movements was dissipated at the joints until any freedom of movement was used up and only then would the strain start to accumulate. In rigidly jointed pipes, no movement of the joints was possible and strain would accumulate from the onset of ground movement until fracture occurred.

[108]Dr Carr said that subsidence analysis in the UK had traditionally been based on the approach developed by the NCB and described in the SEH, originally published in 1966 and revised in 1975. It was an excellent means of assessing the anticipated surface response to the extraction of single coal panels. As the analysis was a manual process, it was less suitable for assessing the effects of more complex multi-panel layouts, although this was technically feasible. The SEH was, however, widely used as a standard against which other subsidence prediction methods were compared.

[109]The analysis of the multi-seam, multi-panel layouts contained in Dr Carr’s report was performed using the SWIFT (Subsidence With Influence Function Techniques) subsidence prediction programme. This programme was developed by Ren, Reddish and Whittaker (1987) at the University of Nottingham and used the stochastic influence function method as a basis for calculation. It was used by Dr Carr to determine the subsidence impact of each panel within the influence zone of the three reference sewers, together with resulting hydraulic and structural damage.

[110]Dr Carr described the reference sewers and the damage which they had suffered. The Waterfield Farm claim related to a section of a 450mm diameter main trunk sewer which ran from Mansfield to the Edwinstowe sewage treatment works. It ran from MH 0201 to MH

[8401]The total length of this section of the sewer was approximately 2535m. It was constructed in 1961. The damage comprised a reduction in gradients and/or backfills to some 1300m, structural damage, including 252 m of sewer with structural condition grade 3, and evidence of pulled joints generally.

[111]The Greenwood Drive claim related to a 225 mm diameter public combined sewer along Lawrence Avenue and Greenwood Drive. It ran from MH 2401 in Lawrence Avenue to MH 3401 at the junction with Greenwood Drive, and from MH 3401 to MH 3206 along Greenwood Drive. The total length of these sewers was approximately 427 m. Construction of the sewers in Greenwood Drive was believed to date from 1938, while the sewers at the western end of Lawrence Avenue were completed some time after 1945. The damage comprised structural damage to 328m of sewer with structural condition grade 3 or above, including 133m in structural condition grade 5 (collapse imminent). 28

[112]The Beauvale Road claim related to 225mm diameter public combined sewers along Beauvale Road, Beauvale Crescent, Abbots Road and Whyburn Lane, Hucknall. They ran from MH 9901 to MH 3901 in Beauvale Road, from MH 9906 to MH 2802 in Beauvale Crescent, from MH 2802 to MH 2901 in Abbots Road and from MH 8201 to MH 1101 in Whyburn Lane. The damage comprised 752m of sewer in structural condition grade 3 or above, including 131m of sewer in structural condition grade 5.

[113]Dr Carr referred to various facts which he considered might have been observable or ascertainable in relation to the damage to the various sewers. Firstly, the s 2 notices, which were dated 20 January 1983 (Waterfield Farm) and 12 February 1976 (Beauvale Estate, Lawrence Avenue and Greenwood Drive). Those provided notice that mining operations were planned in the general area. To identify what infrastructure might be affected by the planned operations, STW’s agents regularly inspected the large scale plans for each colliery at the relevant area headquarters of the compensating authority.

[114]Dr Carr considered that, had levelling surveys to identify hydraulic damage and CCTV surveys to identify structural damage been undertaken at any time since the date of the last mining to affect the relevant sewer (1986 in the case of Waterfield Farm, 1977 in the case of Greenwood Drive, 1982 in the case of Beauvale Road and Beauvale Crescent and 1984 in the case of the Whyburn Lane sewers), evidence of subsidence damage would have been observed. He accepted, however, that in view of their cost such surveys would only have been undertaken if there were reasonable grounds to suspect that damage had occurred.

[115]He said that evidence of hydraulic or structural damage might be apparent from the consequences of damage in the form of surcharging, flooding, pollution incidents and complaints about smells. The record of complaints disclosed by STW in relation to Waterfield Farm only started in March 1995. However, the first complaint listed related to flooding of a field and commented that this was a “recurring problems caused by lack of capacity”. He therefore inferred that STW or its agents had received previous (undisclosed) complaints.

[116]Subsequent complaints referred to blockages, surcharging, flooding at two separate locations and clean up of sewerage in the field. All complaints were received between the months of October and May. Given that the damage to the sewer had probably occurred in or before 1986, and that evidence of flooding was apparent in 1992, it was difficult to believe that there had been no record of complaints until March 1995.

[117]Five complaints had been disclosed by STW in relation to Lawrence Avenue, received from Nos.8 to 22. These complaints dated from February 1995 and appeared to relate to blocked drains and consequential flooding.

[118]Approximately 40 complaints had been disclosed by STW in relation to Greenwood Drive, received from Nos. 8 to 112. The complaints dated from November 1992 and referred predominantly to blocked drains and consequential flooding. Given that the last mining to affect the sewers was in 1977, Dr Carr would have expected the record of complaints to have started well before 1992 if the causative damage had been subsidence related. 29

[119]Twenty-five complaints had been disclosed by STW in relation to Beauvale Road, the majority of which were received from the area of Nos 1 to 69, with one further complaint received from No 189. The complaints dated from February 1993 to April 1999 and appeared to relate to blocked drains and consequential flooding and smells.

[120]There were 10 complaints disclosed in relation to Beauvale Crescent, received from the area of Nos 5 to 77. The complaints dated from August 1995 to June 1998 and again referred predominantly to blocked drains and consequential flooding. No record of complaints had been disclosed for Abbots Road and Whyburn Lane. Given that the last mining to affect the subject sewers was in 1984, Dr Carr would have expected the record of complaints to have started well before 1993 if the causative damage had been subsidence related.

[121]Dr Carr produced a table, listing the causative mining for the following previous claims in the vicinity of Waterfield Farm: Mansfield Road and Newlands Road, Clipstone; Squires Lane, Old Clipstone; River Maun (Forge Bridge); a burst 15 inch water main and a burst 3 inch water main. Dr Carr said it was apparent from this table that workings in the Deep Soft and High Hazles seams were instrumental in causing damage in the majority of the previous claims in the area, particularly those in the immediate vicinity of the sewer. Although the damage that was the subject of the various claims was not necessarily caused solely by these panels, nevertheless it was the extraction of these panels that triggered the claims. In particular, the claim for the damage to the 3 inch main in 1988 was attributed to the Deep Soft 103’s panel, the same panel that was primarily responsible for the damage to the Waterfield Farm sewer.

[122]Dr Carr referred to damage notices in 1979 and 1980 relating to claims in the immediate vicinity of Lawrence Avenue and Greenwood Drive, and to the West Kirkby Subsidence Remediation Scheme. He considered that three panels in the Second Waterloo scheme were probably responsible for all the claims in the vicinity of Greenwood Drive. In his opinion, if all the sewers likely to be affected by these three panels had been investigated at the time of the other claims, the damage to the subject sewers could have been identified in or about 1980.

[123]Dr Carr also produced a table listing the causative mining for the following previous claims in the vicinity of Beauvale Road: Tiverton Close and Hucknall No 4 reservoir, Whyburn Lane. He did not consider two other claims which had been referred to in the Coal Authority’s pleadings, namely the Beauvale Estate and 24 Beauvale Road, were relevant, since the former was not caused by mining activity and the latter did not relate to any of STW’s assets. He said that it was apparent from the table that the panels that were responsible for the damage to the Hucknall No 4 reservoir were two of the same panels that were responsible for the damage to the subject sewers. Therefore, had the sewers affected by those panels been investigated at the time of the Hucknall No 4 reservoir claim, the damage to the subject sewers would have been identified at that time.

[124]Mr Carr considered that, had they been instructed to do so, WA and probably STW’s agents also would have been able to identify, on an annual basis, those panels which were likely to have had a significant adverse effect on sewers. He outlined the following possible approach to such a study:

“(a) Identify panels which had been worked during the preceding year; 30 a. identify the zone of influence around that year’s mining in respect of each panel (based on 0.7 x depth); b. identify one or more sewers within each panel most likely to be adversely affected by subsidence (generally those crossing the downstream rib side of the panel); c. determine the pre-and post-subsidence profile of the sewer by reference to the SEH; d. estimate the maximum anticipated ground strain induced by each panel by reference to the SEH.”

[125]For panels where significant hydraulic damage was identified (that is more than 10% reduction in capacity), damage notices could have been issued in respect of those panels or area of sewers. For panels where the hydraulic damage was found to be not significant, the predicted maximum strain levels could be used to prioritise initial CCTV investigations to identify structural damage. In prioritising areas for investigation, other available information, including any previous claims submitted and complaints received in the area, could also have been taken into consideration.

[126]Dr Carr considered that, in relation to the Lawrence Avenue and Greenwood Drive sewers, STW’s agents had the relevant information available to them regarding the extent to which the drainage network in the area had been undermined by three panels in the Second Waterloo seam during the period 1972 to 1977. He also considered that STW and their agents were aware that these panels had resulted in subsidence damage to sewers in the immediate vicinity of the subject sewers; that the West Kirkby Subsidence Remediation Scheme had been implemented during 1978/9 to make good some of the resulting damage, and that further damage notices had been submitted in 1979 and 1980 in relation to other sewers undermined by the same panel. In his opinion, by 1980 there were sufficient grounds to suspect that damage had occurred to the subject sewers to warrant investigation of the Lawrence Avenue and Greenwood Drive sewers without recourse to expert advice.

[127]It was Dr Carr’s opinion that, in relation to its eastern division sewer system as a whole, it would had been reasonable for STW to have adopted a structured approach to identifying mining subsidence damage to the drainage network similar to that adopted for the distribution network. WA, or STW’s agents, could have been instructed to undertake an annual study, using the approach outlined above, to identify those panels which were likely to have had a significant adverse effect on sewers. He was aware of no reason why WA or STW’s agents could not have been instructed to undertake such studies at a date earlier than 1988. That study would have served to identify priorities in relation to the investigation of claims concerning the drainage network.

[128]In cross-examination Dr Carr agreed that it was not within his expertise to say what it was reasonable for STW to have done, but only what they could have done. Although he had stated in his report that the compensating authority would meet the cost of surveys where subsidence damage was identified and half of the cost where it was not, he accepted that this statement had been based on a recommendation in the code of practice. In fact, the evidence of 31 Mr Loy and Mr Blackburn was that in practice the compensating authority only contributed to the cost of surveys where damage was discovered. He also agreed that he had not carried out an exercise along the lines he had suggested; that the prediction exercise he had done using the SWIFT programme could not have been used to predict damage in 1988 or 1989, and that its use would have cost about £5,000 for every km of sewer.

[129]Although Dr Carr had suggested that it would have been reasonable to use the SEH for targeting investigations at the relevant time, he accepted that in a significant number of cases the SEH would not have been able accurately to predict ground movement induced by mining. He also agreed that it would have been necessary to consider the effect of all the mining since the date of construction of the sewers in any particular location and that this would be a “significant but not unrealistic exercise”; that the less that was known about the existing condition of the sewers, the less accurate would be any prediction about whether the subsidence strains had caused any damage and that STW need not necessarily have been informed about the “recurring problem” of lack of capacity at Waterfield Farm prior to March 1995.

[130]In answer to the Tribunal, Dr Carr said that previous claims associated with a particular coal seam (as opposed to a particular panel in a particular seam) would not have given a reliable indication of likely damage in a different seam.

[131]Mr Engledow said that he had been employed by various local authorities between 1974 and 1990, working in main drainage departments dealing with the design and maintenance of public sewer systems. All these local authorities had sewerage agency agreements with their respective water authorities. He joined WS Atkins Consultants in 1990 as a senior engineer. In that capacity he had been responsible for the design of new and rehabilitation of existing sewerage systems, mainly located within the Severn Trent administrative region. He was currently leading a team of engineers dealing with a variety of sewerage infrastructure projects, including several in former coal mining areas.

[132]Mr Engledow said that, from its formation in 1974, STW had a control structure in place to manage the sewerage function devolved to them under the Water Act 1973. This structure included local authority agents, with staff who would have had local knowledge of both mining activity and the operational history of the sewerage network in their areas. During the 1970s and 1980s STW were actively involved with the formulation of water industry good practice regarding the strategic inspection and management of sewerage systems in England and Wales. In line with industry good practice they commenced their programme of DASs in or around 1982, but studies in the claim areas were not undertaken until the 1990s.

[133]Mr Engledow referred to various other sewers in the vicinity of each of the reference sewers. He said that, in the Baulker Lane area, near Waterfield Farm, the original section of the trunk sewer between MH 0401 and MH 1502 had been replaced with larger diameter pipes at some time during, or more probably after, the period 1977 to 1986. He considered that these works, even if not carried out as a result of subsidence damage, would have exposed evidence of mining subsidence affecting the claim sewer. In his opinion this section of public sewer would have been constructed either by STW or their agent, NSDC. 32

[134]In Mr Engledow’s opinion, if the April 1994 CCTV survey of the Squires Lane sewer had been extended further downstream into Mansfield Road, it would have led a competent body to undertake further investigations into the condition of the section of the Clipstone trunk sewer immediately downstream. He considered that such investigations, in conjunction with knowledge of mining in the area, would have provided sufficient information for a damage notice related to these trunk sewers to have been submitted earlier than February 1994.

[135]Mr Engledow said that it was clear from the Clipstone/Edwinstowe DAS that other sewers in the catchment area, which were known to have been affected by mining subsidence, exhibited the same conditions. It would therefore have been reasonable to expect STW or its agents to investigate conditions in the claim sewer earlier than they did.

[136]If the Monopolies and Merger Commission’s recommendations of 1981, regarding the need for STW to take greater control over its divisions, local water companies and sewerage agents had been followed, he would have expected improved communication within STW to have been part of this control. Even without the increased control recommended by the Commission, it was reasonable to expect the constituent parts of STW to exchange information about matters which were likely to affect their assets. With mining subsidence in particular, where different assets were affected by the same physical conditions, there was clearly a common interest for all parts of STW with responsibilities for those assets to exchange information.

[137]With regard to the claim sewers at Lawrence Avenue and Greenwood Drive, Mr Engledow considered it likely that complaints had been registered prior to the SCARS 2 reports on a separate recording system, probably maintained by ADC in its capacity as agent for STW. In his opinion such complaints, in conjunction with knowledge of mining in the area, would have provided sufficient information for a damage notice to have been submitted earlier than August 1995. Moreover, since the West Kirkby scheme included alterations to the sewer up to MH K771, it would have been good practice to inspect the sewer downstream of MH K88B – the claim sewer in Greenwood Drive – at the time of the original inspection.

[138]As for the Beauvale Road claim, two sections of sewer in Beauvale Road, Beauvale Crescent and Abbots Road did not exhibit damage in the March 1995 survey. It could be inferred from this that these lengths of sewer had been re-laid after the period of mining which would have induced damage.

[139]In cross-examination Mr Engledow accepted that his evidence was restricted to suggesting what STW could have done, rather than what they should have done. He agreed that he was not qualified to express an opinion as to whether STW had acted reasonably. He said that OFWAT would not have agreed to surveys being carried out to discover damage if they were not cost-effective. If the problem at Baulker Lane had been caused by mining subsidence, he accepted that one would have expected a damage notice to be served and the same sized pipe to be used rather than one with a larger diameter, and it was not possible to be certain whether the Baulker Lane works had been carried out before or after the last mining. He agreed that damage to a water main did not necessarily mean that a sewer immediately 33 adjacent to it would be damaged. He also accepted that the Monopolies and Merger Commission’s report did not say that more money should be spent on the sewerage system. Conclusions The general approach to the identification of damage

[140]STW’s approach to the identification of damage to sewers accorded with the SRM. This had been published in 1984 by the WRC and was adopted by all water companies in the United Kingdom. Mr Read described it as the standard reference work for industry professionals involved in the maintenance and rehabilitation of sewers and an accepted standard throughout the industry. Mr Darling contended that STW was wrong to suggest that what it had done should be judged against the industry standard set by the SRM. It was, he said, a self-serving document prepared for the industry by the industry. We do not accept this contention. There is nothing to suggest to us that the SRM was prepared with any other objective than that of establishing what it was reasonable for sewerage authorities to do for the purpose of managing their sewers.

[141]The SRM recommended strategy for planning a sewerage rehabilitation programme was based on concentrating rehabilitation efforts on those sewers where collapse repairs would be very expensive or disruptive to the community at large. These were termed the “critical sewers”. The WRC claimed that pre-emptive maintenance on these sewers would greatly reduce the risk of such failures occurring and could be shown to be cost-effective. The basic philosophy of the SRM strategy was to provide an acceptable service at least cost. The WRC suggested that the development of drainage area plans as advocated in the SRM could result in sewer rehabilitation solutions significantly cheaper than those produced by more conventional or traditional planning methods, which were essentially reactive in nature and based on repairing the most structurally defective sewers as and when required rather than concentrating on the critical sewers. The WRC accepted that failures would nevertheless occur in the non- critical sewers, but the cost of rehabilitation of such sewers following failure would be relatively cheap and non-disruptive. The SRM took the view that for the non-critical sewers the response to failure, or crisis maintenance as it could be described, was the most cost- effective strategy to adopt.

[142]By carrying out DASs in respect of critical sewers and reacting to damage to non-critical sewers as and when it occurred STW followed the selective planned/reactive approach recommended by the SRM. In view of the nature of the area it broke down the DASs into urban and rural areas, whilst still concentrating on the strategic or critical sewers. Of the three sewers with which we are concerned, only Waterfield Farm is a critical sewer. It falls within the area covered by the Clipstone/Edwinstowe DAS, which was prepared by the claimant’s local agent, MDC, in 1991/92.

[143]Mr Darling contended that the SRM should be rejected as a standard against which STW’s practices should be judged because it did not take account of mining subsidence. The way one would approach areas affected by mining and those where no mining had taken place would, he said, inevitably be different, and the SRM did not allow for any such differences. 34 There is clearly, however, nothing in the SRM to say that mining should be ignored in determining which sewers should be the subject of investigation, and such evidence as there is suggests that STW did take into account to some extent, when deciding when the various sewers were to be the subject of a DAS, whether mining was taking or had taken place in the area. It was in our view appropriate to take this factor into account, as sewers in such areas are more likely to be in need of work. Despite the relatively small proportion of STW’s repair costs that is attributable to mining damage the potentiality of mining subsidence to cause damage is obvious

[144]We reject the basic contention of the authority that STW should have carried out studies aimed at predicting where damage caused by mining was likely to have occurred and to use this as the basis for deciding which lengths of sewer should be investigated. There are, in our view, two reasons why such an approach would not be justified. The first is that such studies could at best predict the amount of subsidence which would have affected specific locations on the lengths of sewer and, as Dr Carr agreed, to predict subsidence is not the same as predicting damage since the subsidence will not necessarily have caused damage. Secondly, and of fundamental importance, is that the more accurate the prediction the more it will cost to produce because of the detail of the studies required, and the less accurate the prediction the less its utility in assisting in the identification of damage. Dr Carr referred to two different methods of predicting subsidence affecting sewers. The first used a computer programme called SWIFT but, as he accepted, this was not available until 1989, and there was no evidence to show what could have been predicted using programmes available in the 1980s. Any such analysis would be location-specific and extremely time-consuming to carry out so that, given the great lengths of the sewers in the area, the cost of any extensive study would be huge; and, unless the study were extensive, its predictions would be of little help. In any event, it appears that different experts using different computer programmes could reach widely differing predictions of subsidence, as the three different predictions of Dr Carr, Mr Knipe and Binnie and Partners at a single location at Beauvale Road demonstrate.

[145]Dr Carr’s second method of prediction involved the use of the SEH. In the light both of his evidence and that of Mr Knipe, however, we accept the view of Mr Knipe that the information required for such an approach would be too extensive, the calculations needed would be too complex and imprecise and the lengths of sewer involved would be too great for such an approach to be practicable. In the area under consideration the calculations are in any event made extremely difficult both by the local geological conditions and because of the multiplicity of seams and panels. Dr Carr produced no worked example of how such a predictive exercise would perform, and it does not surprise us that prediction of subsidence is not a method used by sewerage and water authorities in their approach to maintenance.

[146]The purpose of the predictive studies that Dr Carr suggested should have been carried out was to identify those lengths of sewer to be investigated for possible damage. The cost of surveys was agreed to be in the range £1.00 to £1.50 per metre. Mr Loy said that the costs of investigating all the sewers within the area of influence of a single mining panel could have been up to £150,000 at the relevant time, and this would result in investigation costs for the whole STW region of about £8.5m a year. On the basis of Mr Knipe’s estimate of the area most likely to be affected by a single mining panel Mr Read calculated that investigations would cost £55,000 per panel, and £2.75m per year for the STW region. We accept that because of these costs a selective approach to investigation was required. STW suggested that 35 as the authority paid an uplift of only 15% on the cost of repairs any system of investigation that had much less than a 100% success rate would be unlikely to be cost-effective. The extent of reimbursement that STW might achieve can only, in our view, be relevant to whether it should have gone further in its investigations than it was reasonable for it to go for the purposes of the proper management of its sewers. Such reimbursement would not be any guide to the extent of the investigations that it would be reasonable for it carry out as a sewerage undertaker to ensure that its system was kept in proper repair. We accept that the prospective recovery from the authority was not sufficient to justify going beyond the investigations carried out in its DASs in respect of its critical sewers.

[147]Our conclusion is that a reasonable approach for a sewerage authority to adopt in relation to the identification of damage is that recommended by the SRM – a system of planned maintenance involving DASs for the critical sewers and a reactive response to manifestations of possible damage to both critical and other sewers. In determining the timing and priority of DASs and the response to complaints and evidence of flooding the fact that the an area has been the subject of mining is likely to be a material consideration. Complaints and the absence of complaints

[148]It is clear that complaints from the public have in practice provided an important guide to STW in determining where investigations of sewer damage should be carried out. In our view it is appropriate that they should do so. The reliance on complaints was explained by Mr Harding in opening as follows: “The public will complain to the local authority, saying: ‘There is a terrible smell of the drains round here. Can you come and inspect?’ What has generally happened is that the sewage is not flowing through the sewer any more and that may be because there is a lack of gradient or back fall or the sewer has been damaged, and that could be by mining or it could be by other causes, tree roots or other works or simply the age of the sewer, or it could be blocked by some material that has got into the pipe. So there might be smells resulting from that or alternatively that can also lead to flooding of property, because if the sewer is blocked and more sewerage is coming down, ultimately, particularly if there is heavy rain, then the sewer can back up either in houses or on to land, and then that will be again reported to the local authority. The local authority will come out to investigate. What they will do is clear the blockage. They will jet out what is there, because it is usually a blockage that they will find. If they see there is damage or there is obviously a hydraulic problem, then they will report that and come back and carry out surveys, but what generally happens is that they clear the incident and leave it and wait to see what happens, because the majority of incidents will be isolated ones and will not run on, or if they do, it will not be for a number of years, but if they encounter a number of complaints about a particular area, then they will go and carry out more detailed investigations as to what is the cause of those problems, and that will involve them carrying out a CCTV and levelling surveys.” 36

[149]The approach recommended by the SRM in respect of critical sewers is not one that consists solely of planned maintenance. The sewerage authority will also react to damage as and when it is identified. For non-critical sewers, on the other hand, the recommended approach by the SRM is a purely reactive one. We have concluded that such an approach is one that a reasonable undertaker would have adopted. It requires that the undertaker should receive complaints about the possible malfunctioning of sewers and should then investigate them. Such investigations ought in our view undoubtedly to include, where appropriate, CCTV inspections. Mr Loy regarded the pilot CCTV survey carried out in the Beauvale Road and Greenwood Drive area as unsuccessful, not only because the compensating authority had not accepted liability for the damage that had been discovered, but also because it had discovered damage in only 17% of the sewers surveyed and the compensating authority would only therefore reimburse 17% of the study cost of £2,440. The implication is that STW ought not to carry out such surveys where the prospective discovery of damage is only of this order. We cannot accept this. As we have said, what it is reasonable for a sewerage authority to do to ensure that its system is suitably maintained cannot depend on the amount that it may hope to recover from the Coal Authority. The pilot study discovered damage that was in need of repair, and on that account was successful. Moreover the remedial cost of the repairs as set out in the points of claim was £110,000, so that the cost of the study was small in relation to this.

[150]For the periods with which we are concerned (up to February 1988 in the case of Waterfield Farm and up to August 1989 in the case of Beauvale Road and Greenwood Drive) STW is unable to locate its records of complaints. Mr Loy said that prior to 1989/90 STW operated what was referred to as the CRIES system, with a manual recording of complaints. It was replaced by a computer-based system, SCARS 1. There was a suggestion on STW’s part, but with no reliable evidence to support it, that the changeover from CRIES to SCARS 1 occurred in 1986. Mr Loy said that some SCARS 1 data was available but that it was not complete.

[151]Mr Read acknowledged the importance of complaints in directing a sewerage authority’s investigative efforts. He agreed with the view expressed by Mr Engledow that, given the extent of the recorded problems with the sewers in the DAS area, the lack of complaints before those recorded in the 1990s was surprising. In relation to Beauvale Road and Greenwood Drive, Mr Read was asked in cross-examination why the CCTV survey that located the damage could not have been carried out earlier. “Q. Now can we then, please, go forward to Beauvale and Greenwood? Now, I wonder if I can just try to cut matters short. We know that both of these areas of problem were discovered from a pilot CCTV survey. A. Yes. Q. Is there any reason, so far as you are concerned, technically why such a survey could not have been carried out years earlier? A. Technically, no. Q. Now you nevertheless think that it was not reasonable, or nor reasonably necessary, to carry out such an investigation? 37 A. We are dealing with Greenwood Drive and Beauvale Road together, are we? Q. They were dealt with by the same pilot CCTV survey. A. Precisely, so we are dealing with them. The answer to the question is no, because there is no evidence of complaints. Q. Essentially the debate between you and I comes down, does it not, to the presence of or absence of complaints? A. Precisely.”

[152]Since, to the extent that a reactive approach to maintenance is employed, it is complaints or reports of flooding that cause the investigations to be made that lead to the identification of damage, the need for good records of complaints is obvious. A single incident of flooding might not justify a CCTV and levelling survey, but repeated occurrences would be likely do so. The lack of records for the periods with which we are concerned is a matter, in our judgment, of considerable importance. We return to the issue of complaints and the lack of complaints below. Waterfield Farm

[153]The Waterfield Farm sewer is a critical sewer and thus, on the basis of the SRM strategy, which STW adopted, in our view reasonably, it fell to be investigated as part of the programme of DASs that STW put in hand in 1984. Given our conclusion that it was appropriate for STW to follow the SRM strategy, two questions arise: firstly, whether the priority accorded to the Clipstone/Edwinstowe area was reasonable (and, if it ought reasonably to have been carried out earlier than it was, whether the damage would have been discovered); and, secondly, if the priority was reasonable, or if the damage could not have reasonably have been discovered by an earlier DAS, whether complaints or reports of flooding ought to have caused STW to react by carrying out investigations (and, if so, whether such investigations would have identified the damage). We express the questions in this way, but it must be borne in mind that the onus in relation to them is, as we have concluded, on STW. It is for STW to show that it could not reasonably have acquired knowledge of the damage to the Waterfield Farm sewer before 8 February 1988.

[154]The evidence shows that the Waterfield Farm sewer has been affected by a large number of coal workings, most recently in 1985/86, and there is no dispute that this was ascertainable by STW. Neither party seeks to attribute the damage that the sewer has suffered to any particular workings. There is agreement that subsidence damage usually occurs within a short time of the withdrawal of support. The damage could have occurred, therefore, in 1986 or it could have occurred earlier. There is no dispute that previous claims had been made in the Waterfield Farm area, and these are identified above in the evidence of Mr Read. Flooding occurred and was recorded in the vicinity of the Waterfield Farm sewer in 1995 and it was recorded as being a recurrent problem. CCTV and levelling surveys, if carried out after the damage had occurred, would have identified the damage. All these matters, which we accept as being factually correct, are relied on by the compensating authority as showing that the damage was ascertainable by STW more than six years before the service of the damage notice. 38

[155]We have rejected the compensating authority’s contention that specific calculations of mining subsidence should have been done and that a specially targeted survey should have been carried out. The Waterfield Farm trunk sewer, however, was a critical sewer and as such it fell to be investigated as part of STW’s DASs. It is clear that a DAS carried out before February 1988 and after the 1985/86 workings could have been expected to identify any damage caused by those or earlier workings. The question, as we have said, is whether the priority accorded to the Clipstone/Edwinstowe area was reasonable. The evidence on this is exiguous. In evidence in chief Mr Loy said simply:

“When deciding when the various sewers were to be the subject of a DAS, we gave priority to areas where we knew mining was taking or had taken place, as these were more likely to be in need of work.”

[156]That says nothing about the priority accorded to the Clipstone/Edwinstowe area at the time that STW had determined its programme of DASs. At that time Mr Loy was not employed by STW. He only joined STW in July 1988. A document, disclosed by him in the course of the hearing, suggests that, while mining was a matter taken into account in determining the priority of DASs, to say that such areas were given priority over other areas would be inaccurate. The document, entitled “Drainage Area Studies: A Priority Ranking for Reassessment” was prepared for STW in 1994 by a research student. It stated that the DAS programme contained a priority list that had been drawn up based on three main indicators, investment, strategy and performance, which were the subject of a scoring system. It annexed a form “DAS 1 – Drainage Areas – Ranking” which, under the heading “(3) Performance Indicator” contained seven factors to be scored for the area under consideration. Among them were structural collapses, flooding incidents, the area of development, the number of pumping stations and mining subsidence. The basis of scoring was set out. In cross-examination Mr Loy said that he had no knowledge of the completion of DAS forms and was not aware of any surviving documents. He had no knowledge of the raw material that was used as an input to the mining factor.

[157]As we have said, since the onus is on STW it is for STW to show that it was reasonable for the Clipstone/Edwinstowe DAS not to have been carried out before 1988 or that, if it had been, the damage would not have been discovered. The evidence before us is insufficient to conclude on what basis DAS priorities were determined or the extent to which mining subsidence either was or ought to have been a factor in such priorities. Nor is there any explanation as to why this particular DAS was carried out at the time that it was. The claims made in respect of nearby lengths of sewer at Newlands Road, Mansfield Road and Squires Lane would undoubtedly have been relevant to a consideration of what the priority should be. Moreover, if there was evidence of flooding in the vicinity of the Waterfield Farm sewer, that also would have been relevant. How those matters would have impinged on the priority given to Clipstone/Edwinstowe DAS we do not know. STW has failed to show that the DAS ought not reasonably to have been carried out before 8 February 1988.

[158]Of course, the programme of DASs only began in 1984 and the damage could have arisen as the result of earlier mining. But the selective planned/reactive approach recommended by the SRM would in our view have been the approach that a reasonable sewerage authority would have taken before the publication of the SRM recommendations. We have no evidence 39 as to the approach of STW before then, however, so that, for that earlier period also STW has failed to show that the DAS ought not reasonably to have been carried out.

[159]It is to be noted that the surveys that were carried out by MDC in 1990 in connection with the DAS did not discover any problems at Waterfield Farm. This was because the subject sewer crossed over farmland and some of the manholes were buried under fields and were difficult to locate. When, however, NSDC were subsequently instructed to carry out levelling surveys in this area, they were able to locate the relevant manholes and discover evidence suggesting that the sewer had moved. No evidence was adduced by STW to explain why the manholes in question, which were able to be located in late 1993, could not have been located at an earlier date, and in our judgment a properly conducted DAS would have done so. We find that STW have failed to establish that a DAS carried out before 1988 would not have identified the damage.

[160]We would add that Mr Harding in closing sought to base his case in relation to the priority of DASs on the evidence of Mr Engledow. Mr Engledow had agreed with him in cross-examination that, although the DAS could have been carried out sooner, he was not suggesting that it should have been. However, Mr Engledow had made it clear that it was no part of his evidence, as an engineering technician with no previous experience of coal mining subsidence claims and no experience of water authorities’ funding, to say what STW ought reasonably to have done. Indeed Mr Harding had been at pains to stress that in relation to these matters Mr Engledow was not an expert and was not in a position to comment on the issue of whether STW had acted reasonably. We attach no significance to the answer on which Mr Harding sought to rely.

[161]In relation to the Waterfield Road claim, therefore, STW has failed to show that it was reasonable for the DAS not to have been carried out before 1988 or that, if it had been, the damage would not have been discovered. In view of this conclusion the second question we identified – whether complaints or reports of flooding ought to have caused STW to react by carrying out investigations (and, if so, whether such investigations would have identified the damage) – does not arise. Beauvale Road and Greenwood Drive

[162]We take these claims together. The sewers that are the subject of the Beauvale Road and Greenwood Drive claim are non-critical sewers. The damage was discovered in a pilot CCTV survey carried out in March 1995. Mr Loy explained that the pilot study was embarked upon because of concerns on the part of STW about the way in which the authority would seek to interpret the limitation provision in the 1991 Act. The area was chosen for study as a mining “hot-spot”. It was an area in which it was known that damage to sewers had been caused by mining subsidence and there was a likelihood that further damage would be found.

[163]The only question is whether STW have shown, given this recognition of the area as one in which the sewers were particularly at risk of subsidence damage, and the discovery of the damage in 1995, that they could not reasonably have ascertained this damage in the period before August 1989. The approach to sewers such as these, as recommended by the SRM, is a 40 reactive one, with the sewerage authority reacting to damage as and when it occurs. We have concluded that such an approach is one that a reasonable undertaker would have adopted. It requires that the undertaker should receive complaints about the possible malfunctioning of sewers and should then investigate them appropriately. We have referred above to the issue of complaints and the absence of complaints. Mr Read, in evidence we have recorded, said that the reason he did not think that Beauvale Road and Greenwood Drive should have been investigated earlier was the absence of complaints prior to 1989/90. Mr Harding submitted that, had there been any complaints before those for which records existed, it must be presumed that an authority such as Ashfield District Council would have investigated the sewer, found the damage and submitted a damage notice, as they had previously done on numerous occasions. The absence of a damage notice was therefore strong evidence that there were no complaints that should have led STW to find the damage any earlier than it did.

[164]We do not think that the inference that Mr Harding asks us to draw can properly be made. No evidence was called to show what ADC’s procedures were for acting on complaints or the extent to which such procedures were followed. In the absence of such evidence it is impossible for us to conclude that, because there were no damage notices, it is to be inferred that there were no complaints that should have led STW to find the damage any earlier than it did. The lack of any record means that STW cannot show that no complaints were received before 1989 or that, if there were complaints, they would not have led to the discovery of the damage. This, in our judgment, is fatal to its claim. While we do not think that all the previous claims relied on by the compensating authority are of significance, the fact is, as STW have put it, that this area is a mining “hot-spot” so that the reactive approach to any complaints ought to have been conditioned by this consideration.

[165]In the light of these conclusions we determine the preliminary issue in relation to each of the claims in the compensating authority’s favour. We determine that STW did have the knowledge, as defined by section 3(4) of the 1991 Act, required for founding the claim more than six years before the claim notice was given. That determination disposes of the references, which are accordingly dismissed. A letter on costs accompanies this decision, which will take effect when, but not until the question of costs is decided. Dated 14 April 2004 George Bartlett QC, President N J Rose, FRICS 41 Addendum on costs

[166]We have received written submissions on costs. The compensating authority ask for their costs. They say that they have been successful in the three references which went to a hearing as well as in the two which were abandoned at an earlier stage. They submit that no special reason exists for departing from the principle that costs should follow the event. Although the Tribunal rejected the compensating authority’s case that STW should have carried out predictive studies and targeted investigations, that finding should not prevent the normal order for costs being made, for two reasons. Firstly, the issue did not cause any significant increase in the cost or duration of the proceedings and was not raised unreasonably or improperly. Secondly, the expert evidence, in relation to mining and its timing and effects, and in relation to sewerage systems and their operation, was necessary in any event for the proper determination of the references. The claimant has not gained by pursuing the references and there are no matters of conduct which have any significant bearing upon the issue of costs.

[167]STW’s primary submission is that the Tribunal only found in favour of the authority on matters that were unpleaded and were only contained in supporting evidence and that the Tribunal expressly or impliedly rejected the compensating authority’s pleaded case on the three issues referred to in its replies to further and better particulars, as summarised in paragraph 10 of the decision. STW says that the compensating authority should pay its costs of and occasioned by those issues in all five references. STW also argues that the compensating authority’s failure to serve a proper and detailed defence, and to accept STW’s repeated suggestion that it should drop its reliance on the section 2 notices had increased costs unnecessarily, and that its dismissive response to a request that it should amend its pleadings “borders on the arrogant”.

[168]The parties have set out their respective submissions on costs fully in writing and there is in our view no need for the oral hearing on the matter that has been suggested by STW.

[169]The general rule is that the successful party should receive its costs. The extent to which this general rule is qualified was explored in the written submissions we received. STW refer to Purfleet Farms Ltd v Secretary of State for Transport Local Government and the Regions

[2003] 1 P & CR 324

, the Civil Procedure Rules, and the observations by Lord Woolf MR in AEI Ltd v Phonographic Performance Ltd

[1999] 1 WLR 1507

at 1522-3, in which he emphasised that under the CPR the following the event principle is a starting point from which the court can readily depart. Reference is also made to Johnsey Estates Ltd v Secretary of State for the Environment, Transport and the Regions

[2001] EWCA Civ 535

, in which Chadwick LJ, identifying the principles applicable in that case, said at para 21 that a judge should consider making different orders for costs where a party has been successful on one issue but unsuccessful on another and may, in that event, make an order for costs against the party who has been generally successful in the litigation.

[170]We do not consider that the compensating authority’s conduct, either in relation to their approach to the pleadings or otherwise, warrants a departure from the general rule, under which, as the successful party, they ought to receive their costs. The issues raised in the pleadings and the disclosure that was sought as a result were not, in our view, unjustifiably 42 extensive, given the nature of the claims and the fact that the application of section 3 of the 1991 Act to damage to sewers was an important and previously unexplored matter. STW are wrong in suggesting that we impliedly rejected as factually irrelevant to the issue all the incidences of damage in adjacent lengths of sewers. We did not do so, as appears from paragraphs 157 and 164 of our decision. Nor do we consider that the fact that the issues on which the compensating authority succeeded were not pleaded but arose in the course of the hearing is sufficient justification for depriving the authority of all or part of their costs.

[171]The significant matter, in our judgment, however, is that on the important issue of principle – the correct approach for a sewerage authority to adopt to the identification of damage – we found in favour of STW and against the compensating authority, and we think that this should be reflected in the order that we make. The evidence relating to predictive studies and targeted investigations, involving as it did both mining and sewerage experts, occupied a significant part of the hearing. Taking into account both the compensating authority’s failure on this issue and the time spent in exploring it, therefore, we consider that the compensating authority should receive only fifty per cent of their costs.

[172]On the two withdrawn references we see no need to deprive the compensating authority of their costs.

[173]Accordingly, STW will pay the compensating authority’s costs of references LCA/35/1999 and LCA/37/ 1999 and one half of the compensating authority’s costs of references LCA/34/1999, LCA/36/1999 and LCA/38/1999. In default of agreement such costs are to be the subject of a detailed assessment by the Registrar on the standard basis. Dated 16 June 2004 George Bartlett QC, President N J Rose FRICS 43