Fire damage and statutory duties: Morrison Sports Limited and Others v Scottish Power

1 Introduction

1.1 A recent case in the Inner House of the Court of Session concerned a fire in Paisley which destroyed two buildings and a gable wall. The seat of the fire was identified as an electricity meter cupboard.

1.2 The tenants and owners of the damaged properties brought an action against Scottish Power, the electricity suppliers. The decision by the Court was in favour of the claimants and clarifies when a failure to comply with a duty imposed by legislation can give rise to liability for damages. It will be of interest to all those who provide services under statutory duties.

2 The claim

2.1 The issue before the Court was whether or not the claimants were entitled to rely upon the Electricity Supply Regulations 1988 (“Regulations”) as a basis for an action for damages or compensation. The Regulations place various duties on electricity suppliers, including an obligation to ensure that works are installed and maintained so as to prevent danger (so far as is reasonably practicable).

2.2 In defending the claim, Scottish Power adopted what may be described as a traditional approach to statutory interpretation. Relying upon the earlier case of X (Minors) V Bedfordshire County Council, they argued that the Regulations did not give rise to liability for compensation because they did not meet the relevant test. The essential requirements of the test are that:

2.2.1 The legislation is for the benefit of a particular class of persons rather than the general public; and

2.2.2 Parliament intended to confer on members of that class a private right of action for breach of the statutory duty.

2.3 In response, the claimants argued, amongst other things, that the only rule imposed by previous caselaw was that the Court should look for the true intention of Parliament by construing the particular legislative terms in question.

3 The Court’s decision

3.1 In finding in favour of the claimants, the Court highlighted that the Electricity Act 1989 (“1989 Act”) contained a provision which specified that the Regulations were to have effect “as if they were made” under section 29 of the 1989 Act. This was significant because section 29(3) provides that regulations made under the 1989 Act may impose criminal penalties for contravention of such regulations but that nothing within that provision
“shall affect any liability of any such person to pay compensation in respect of any damage or injury which may be caused by contravention”.

3.2 The Court found that the clear and plain meaning of section 29(3) was that Parliament intended any member of the public who suffers damage or injury to be entitled to raise an action for damages based on a contravention of the Regulations. As such, there was no need to define a protected class.

3.3 The Court also said that even if Parliament’s intention was not clear from section 29(3), there were various other factors which indicated that Parliament had intended liability to be imposed. In particular, the Court stated that it was more inclined to construe the Regulations as conferring private rights of action because protection of the physical safety of persons and property is one of the major purposes of the legislation.

4 Implications of the decision

4.1 The judgement is of significance to anyone interested in statutory interpretation. Perhaps more importantly, it has practical implications for electricity suppliers - and potentially any individual or organisation subject to statutory duties - depending on the particular wording of the legislation. This is especially so if the legislation aims to protect the physical safety of the public or property.

4.2 The decision by the Court of Session is not the end of the story in this case, as Scottish Power deny any wrongdoing on the part of their employees and a decision will require to be made on this in due course. Nonetheless, this judgement obviously opens the door to further claims for damages against electricity suppliers on the basis of the Regulations. It also suggests that those who are subject to statutory duties may wish to examine carefully the wording of the applicable legislation, to find out whether liability for damages is another incentive for compliance.