![HT-2022-000090 - [2025] EWHC 723 (TCC)](https://backend.juristeca.com/files/emisores/logo_yJUntHA.png){kind=logo}
Conclusions
Summary of Key Facts drawn from Sections D and E
The starting point is that I have found that replacing both circuits (as opposed to doing nothing, or replacing some or all joints) was a technical remedial solution in the face of the breaches of the Adoption Agreement established that was, objectively, reasonable.
That is not, however, the end of the enquiry. On the evidence, there were a number of potential ways of achieving this: by reference to the options paper, Options 2, 3, 4 and 5 all involved replacement of two circuits: see paragraphs 56 to 59 above for a discussion of the Options.
The further facts of relevance are, in my judgment:
Modus was not prepared to carry out or fund any technical solution acceptable to SEPD.
Modus also expressed concerns as to its ability to fund, or repay, the cost of carrying out even Option 1 (which was approximately 33% of the Option 2 estimated costs and 25% of those for Option 4);
SEPP were entitled to conclude, at least at the time they were making their decisions, that the prospect of recovering any or any substantial sum from Modus was (at the very least) risky;
SEPD had a statutory obligation to connect SSF to the grid;
carrying out the works in such a way as to require a significant downtime of the existing circuits would cause very significant financial losses to SSF (whether the daily losses are £23,000, £28,000 or £50,000);
SEPD had no legal liability to compensate SSF for those financial losses;
SSF/Rockfire placed pressure on SEPD to agree a solution which did not involve any significant downtime to the connection, including explaining why there was a ‘large public interest’ in maintaining generation.
SSF/Rockfire also offered a financial contribution in order that the remediation take place without causing an outage (subject to that contribution being repaid if any recovery was made in relation to the costs of remediation against any third party).
SEPD agreed to carry out the works in the way they did (‘the Adopted Solution’) under an agreement by which SEPD received £700k for doing so. It is not possible, on the evidence, to say for certain whether this contribution was more, less or the same as the then perceived additional cost of carrying out the works in the way requested by SSF. On the basis of figures within the options report spreadsheet, at least, it exceeded the delta between Option 2 (in-line replacement with significant outage) and Options 4 and/or 5. The Remedial Agreement would, on these figures at least, have represented a net contribution to SEPD’s anticipated costs irrespective of the maintenance of the connection during the works.
In light of my findings above, the central questions, applying the principles of law I have set out in Section C are:
was it reasonable for SEPD to replace the circuits by the Adopted Solution?
if it was reasonable, are the actual costs of doing so properly attributable to the defendant’s wrong rather than a consequence of the claimant’s choice?
if so, are the actual costs of doing so themselves reasonable?
The answer to each of these three questions is, in my judgment: yes. This is for the following reasons:
it was objectively reasonable to reject in-line replacement (Option 2) as not being equally technically efficacious, in light of the contemporaneous concerns over ducting. However, in light of SEPD’s own view that this was its preferred method at the time of entering the Remedial Agreement, I approach the remainder of the analysis on the basis that SEPD did not regard the advantages of complete replacement over in-line replacement as sufficient to justify as reasonable the additional costs;
it was objectively reasonable to reject any replacement methodology, including in-line replacement, which required personnel to work in close proximity to a live circuit. I accept Mr Alyah’s technical evidence that there were significant risks, which could not be fully mitigated, in carrying out the installation of the replacement circuits in the same or an adjacent trench whilst one or both existing circuits remained live;
this conclusion leads to two possible approaches in practice: (1) replacing both circuits, whether in-line or by way of complete replacement in the same or adjacent trenches within the same easement, but in so doing, ensuring that the existing cable was disconnected so it presented no risk. This would mean that, inherent in any of these solutions, there would be a long period during which SEPD would provide no method by which SSF could generate revenue from the solar plant; or (2) replacing both circuits in a different route, which would mean no risk of interference with the existing circuits and which could therefore leave the live circuits in place until the installation of the new circuits was complete i.e. the Adopted Solution;
although Mr Phillipps’ evidence was that there were reasons independent of the outage issue which meant that routing the replacement cable in a different route had advantages in terms of landowner relationships/access, I do not accept that this of itself was likely to be a weighty issue in the decision to undertake the Adopted Solution. This is because the importance of these issues is inconsistent with the Agreement with SSF which identified SEPD’s ‘preferred method’ which, I have found, was ‘Option 2’ – i.e in-line replacement;
it is plain on the evidence that the motivation for choosing the Adopted Solution was the desire to accede to SSF’s request that the remedial work did not give rise to any or any significant outage. It is clear that a long outage would cause SSF significant losses in revenue. Whilst I take account of the fact that there was no legal liability on SEPD’s part to compensate that loss in revenue, that did not mean that it was unreasonable to accede to SSF’s request, or that so doing did not flow naturally from the requirement to remedy Modus’ breaches. This is because:
SEPD’s business is (at least in part) providing infrastructure to solar generation plants allowing them to export electricity and generate revenue. It had a statutory obligation to provide that connection. On any view, SEPD had a legitimate business interest in maintaining that which, by statute and by the Connection Agreement with the SSF, it was (to put it at its lowest) expected to provide. The fact that consequential loss for a failure to provide an effective export mechanism was minimised or excluded does not detract from the wider business and reputational interest in maintaining the connection. Put another way, whilst, as Mr Dickson said, SEPD could have (legally) said ‘tough luck’ without direct pecuniary implications, it does not follow that it is unreasonable, or a failure to mitigate loss, to decide not to do so;
pressure was being exerted by SSF on SEPD to keep the connection live during the remedial works by reference to the wider impacts on the local community if electricity generation from the solar farm ceased. In particular, SEPD was being told that, ‘Swindon project is a very public one with some very big public backers that relies on the income we generate each year to in the main assist with the provision of front line services to the residents in their areas, the funds are used in a variety of ways ranging from adult and social care to innovative projects to help people in fuel poverty so in simple terms this is a large public interest project’. There is no suggestion that this was not true. Mr Smith fairly accepted that this was a legitimate factor to consider: it plainly was. The legitimate interest in maintaining the connection in a large public project would be an important consideration in its own right, in addition to the related self-interested reputational issues which SEPD was entitled to take account of. Moreover, SSF had earlier threatened to consult with SEPD’s regulator during the initial period during which the circuits were disconnected, and it is a reasonable inference that they may have done so again had the Remedial Agreement not been reached. It is therefore unsurprising that SEPD felt ‘pressure’ from SSF, as described by Mr Dickson, even if there was no direct financial leverage in the sense of a liability to pay compensation;
SSF offered a financial contribution to the solution, in circumstances where on the basis of Modus’ communications, SEPD was entitled to conclude that any recovery against Modus in practical terms was, at best, risky. Acceding to its customer’s wishes, and acting, in circumstances where the customer was willing to finance, subject to recovery, some, all or indeed potentially more than additional costs involved in carrying out the works to keep the ability to generate electricity was objectively reasonable.
It is not possible to say with any certainty what the additional cost was for carrying out the works in such a way as to keep the existing circuit alive. The highest it could possibly be put is the delta between the estimate for Option 2 at £1.4m and the outturn costs of the new route at £2.4m, but this is plainly not a safe comparison. A closer, but definitely not an entirely satisfactory guide, is the difference between £1.4m and Option 4 (£1.9m) i.e. about £500,000. It may have been lower. The burden is on Modus to prove the failure to mitigate, and to do so it is for Modus to establish how much cheaper it may have been to carry out the work in the way they contend SEPD should have: they have not done so. However, putting the burden of proof to one side, when weighed against the very legitimate interest in minimising as far as possible any downtime to the connection to the solar park, I conclude that whether the additional cost was £500,000 or £1m, the Adopted Solution was objectively reasonable;
in circumstances where, by reason of Modus’ defective work, it was reasonably necessary to replace the circuit, it was readily foreseeable that, SEPD would seek to carry out repairs without, insofar as they reasonably could, interrupting the existing connection to their customer. The decision to carry out the remedial works in this way was both reasonable, and caused in law by the underlying breaches and defective circuits;
there is no evidence that the actual cost of carrying out the work was itself unreasonable, once it has been determined that the decision to replace the circuits was reasonable, and the decision to use the Adopted Solution was reasonable.
In the circumstances, SEPD’s claim succeeds in the claimed sum of £2,642,237.71. I will hear from the parties in relation to interest as part of the consequentials.