HT-2022-000090 - [2025] EWHC 723 (TCC)

The Facts

Swindon Solar Farm Limited (‘SSF’) was a special purchase vehicle to hold the solar farm, and SSF was initially operated by British Solar Renewables Limited (‘BSR’).

SEPD is a DNO that owns and operates electricity distribution infrastructure across the UK. SEPD has a statutory obligation to connect customers for import or export of electricity pursuant to section 16 of the Electricity Act 1989, further to which SEPD and SSF entered a Connection Agreement dated 21^st January 2016. The solar farm was to be connected to the network by installing a new DNO switch room at the project site (the ‘PV Substation’) and installing 7km of two 33kV ducted underground cable circuits between the PV Substation and SEPD’s existing DNO substation at Toothill. The two circuits were each made up of three individual cables, so there were six cables overall. Generally, any works taking place outside a DNO’s site boundary fence are called ‘contestable works’ and can be done by a third party contractor registered under the Lloyd’s Register accreditation scheme (called an independent connection provider, or ‘ICP’). Modus is one such ICP.

Mr Phillipps’ team’s role was to deliver the connection, and it was involved in the parties reaching the Adoption Agreement, which was entered at or near the conclusion of the design and construction work and testing, so that following successful testing, the circuits became part of SEPD’s network of assets. Mr Dickson was SEPD’s Project Manager for the Works and Mr Phillipps was his line manager, and it was Mr Dickson’s responsibility to arrange for the entering into of the Adoption Agreement.

As explained by Mr Phillipps, the key phases of the Works leading up to adoption can be summarised as follows: (i) gaining landowner consent to access the land on the circuit route; (ii) carrying out any ecological or archaeological mitigation that is required as identified in pre-construction surveys; (iii) excavating of cable trenches; (iv) removing of any surplus ground; (v) installing the cable ducts to the correct depth; (vi) installing cable marker boards above the ducts; (vii) final backfilling above the cable marker boards to ground level and remediating at ground level; (viii) pulling the cables through the ducts; (ix) joining cables at joint bays if the manufactured cables are shorter than the required circuit length (as was the case here); and (x) backfilling the joint bays. SEPD had a Cable Supervision Team to witness ICP works, such as the excavations and cable pulling. The Cable Supervision Team would have done ad hoc inspections at various points to check that the Works were to SEPD’s standards. There is no suggestion that at any time during the currency of the works, the Cable Supervision Team identified any issues with the quality of Modus’ works. When the ICP considers the works to be completed, pre-energisation tests will be performed on the circuits. The pre-energisation tests included pressure tests, to ensure the circuit holds the right level of voltage, and a sheath test which looks at the earth sheath pressure testing, and a final sheath test. A sheath is a copper conductor around the main case of the cable, and this test ensures the continuity of sheath conductors which is part of the cable make up and are essential to the safe operation of the cable circuit.

In this case, initial pre-energisation tests were carried out by SEPD on 21 March 2016 from their substation at Toothill, which included end to end testing which was successful. The final pre-energisation tests took place on 23 March 2016 and the results appeared successful. SEPD energised the works the same day and the circuits became part of SEPD’s assets. The completion certificate was signed by Mr Dickson on 4 April 2016. Mr Dickson explained his understanding about the time pressure which existed to have energised the circuit by 31 March 2016. By reason of the conditions for the PV farm receiving a tariff from Ofgem, the Works had to complete load (i.e. electricity generation) commissioning by 31 March 2016.

After the cables had been energised, Mr Phillipps received a call to say that one of the circuits had faulted (meaning that it had fully discharged, or that the circuit breaker had tripped indicating a failure of a cable or a piece of apparatus) and that one of SEPD’s Regional Faults Teams was trying to identify the location of the fault. Mr Dickson recalled that this was over the bank holiday Easter 2016 weekend and that he was contacted on Easter Sunday. The fault was 10 or 15 metres from the new PV substation. All six cables had sheath repairs on them in the same place. Cable sheaths include an outer-sheath of PVC and a wire mesh layer underneath that is usually earthed. The outer-sheath can get damaged, so a sheath repair is a rubber sheath that is heat-shrunk around the damage to prevent moisture getting into the cable. When SEPD’s team opened the repairs up, it found that a section of the mesh sheath had been removed on all six cables. This meant that the pre-energisation tests carried out from the PV farm substation only tested the first 10 or 15 metres of each cable from the substation to the point where the mesh had been removed.

Mr Phillipps described how, at this time, there was a meeting between him and Modus’s senior management at the SEPD office in Forbury. Modus denied that they had carried out the sheath removals. They believed a third party had accessed the site and carried out those activities overnight without their consent. Modus does not dispute its contractual liability in respect of these defects pursuant to the Adoption Agreement. It does dispute, however, that an inference can or should be drawn from the fact of these removals (which appear to have been carried out deliberately in order to accelerate successful pre-energisation testing by the required deadline) and Modus’ own quality of work or approach to its obligations. I accept, in the context of the issues I have to decide, that SEPD has not established on the balance of probabilities that the sheath removals were carried out by Modus’ operatives, rather than, as Modus said contemporaneously, an unknown third party in circumstances which were not authorised by them. It is not said by SEDP that the need to repair these unauthorised works on the cables itself justified, or indeed was relevant to, the eventual decision to replace the entire cable.

SEPD performed an emergency repair to the areas where the sheaths had been removed in order to reconnect the circuits. Due to the proximity to the PV Substation, it was agreed that cables would be pulled from the PV Substation to the joint so that there was only a single joint replacement. Ordinarily, when a joint is removed and repaired, it is necessary to install a replacement length of cable of 3 metres with the effect that each joint repair leads to two joints in the repaired cable. After SEPD had repaired the circuits at the location of the removed sheath, it re-ran the sheath tests on the rest of the 7.2km circuits; the results of those tests indicated that the cables failed to meet the required standard at the time of 100MΩ resistance or higher in the sheath test. It was Mr Phillipps’ view that this sheath removal had masked poor workmanship on the remainder of the circuit, and it is probable that the results of the Pre-Energisation Tests would not have passed SEPD’s minimum requirements if they had related to the entire circuit, as SSEN believed they did pre-energisation. As I refer to further below, the independent Lloyds Register (“Lloyds”) report concluded, ‘there only seems to have been one possible motive for the removal of the screen wires which would be to prevent the detection of sheath faults during testing so that the connection would be energised before 31 March 2016 so enabling the wind farm operator to claim the higher export tariff’.

Mr Dickson described how, at this point, SEPD was not prepared to re-energise the circuit until it had been repaired properly. SEPD had to go through the process of locating all the sheath faults on the cables. SEPD would dig down to find the cable, look at the quality of it, cut out the relevant section and send it off for inspection.

By 27 April 2016, on which date there was a meeting between personnel from Modus and SEPD including Mr Phillipps and Mr Dickson, it was reported that the following fault works had been carried out:

“- 6 Sheath repairs at PV substation cut out & sent to jointing school

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2 joints in Joint Bay 6 cut out and replaced;

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3 at Joint bay 13 cut out and replaced; sheath fault located at Joint Bay 15; 5 cores good from end to end (continuous sheath) C

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Circuit 1 – Red is faulty, yellow faulty - Only holding 1200kV.

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¾ of cable route cleared of sheath faults. From Wroughton PV to Joint Bay 13 is clear, other side of the railway to Toothill - still possible faults.”

Other issues then reported included unrecorded repairs and that at the joints, the cables were not in trefoil. ‘Trefoil’, in this context, means the three cables bundled together into a triangle and kept in place with cable ties. The meeting minute also referred to a need to ‘partial discharge’ (or ‘PD’) test the entire cable route before energising again to ensure everything ‘was okay’. SEPD was going to recommend an independent company who

SEPD informed Lloyds, the accreditation organisation which operated the National Electricity Registration Scheme, of their particular concern about the circumstances surrounding the initial sheath removals. Lloyds carried out an investigation, to which reference has already been made. On 22 April 2016, Lloyds suspended Modus’ membership of the National Electricity Registration Scheme. In May 2016, Lloyds produced a report, which identified multiple issues with the circuits. The issues identified included the following:

In its Defence, Modus admitted (1), (4) (6), (7) and (8), contending that they were minor and/or repaired by Modus and/or administrative so as not to compromise the integrity of the circuits. As to (2), (3) and (5), Modus attributed these faults to the unauthorised works. In relation to backfill, Modus are reported to have advised Lloyds that the backfill material used was 0-4mm limestone which was SEPD’s specification, and at least on the face of the Lloyds Report it does not appear that this contention was contested.

In an exchange of emails between Mr Crofts (also of SEPD) and Mr Dickson on 25 May 2016, Mr Crofts gave an update on the ongoing issues with fault detection and repair. He described issues with joint bays 14 to 17, with low MΩ readings being achieved, particularly in circumstances where the joints were surrounded by water. He considered that the economical, efficient use of resources and the correct engineering decision would be to ‘overlay’ (i.e. completely replace, albeit without removing the existing cable) from joint bay 14 to 17. He pointed out that what he described as ‘the healthy circuit’ as holding 5kV, but with approximately 5MΩ, which was not in accordance with the specification. He also concluded that, if possible, all the joint holes should be re-opened along the entire length of the run and re-jointed, ‘as all the issues found thus far are with the ICP’s joints, however this would more than double the amount of joints on the cable run.’ As a result of this failure to meet the specification, John Baker (Procedures and Investigations Manager, a senior technical authority within SEPD) reviewed document PR-PS-063 and agreed to reduce the requirement to 10 MΩ at 5kV, essentially making it easier for circuits to meet the new requirements whilst not increasing the risk of failure in the future. Mr Baker sent an email to Mr Dickson on 27 May 2016 saying ‘I am taking a more pragmatic view in that an average leakage of current should be 0.5mA and with a 5kV tester equates to 10M ohm. Whilst the update to PR-PS-063 is still to be issued I would accept values in excess of 10M ohms as being satisfactory for Wroughton’.

On 13 June 2016, SSF wrote to SEPD, and was strongly critical about the delays to energisation of the circuits, suggesting that it was costing SSF £23,000 a day. The letter concluded:

“Regrettably, due to the slow progress made to date, coupled with lack of regular updates and a clear programme of works to completion, we must now inform you that the next step for us is to consult with Ofgem, with a view to go to determination. Whilst we would hope that we can resolve prior to determination, you will appreciate the financial impact, as well as impact on onward sale, of the solar park not being energised, is such that we feel it necessary to take these steps.”

In his witness evidence, Mr Phillipps described this as ‘more of a reputational issue’ in circumstances where he saw SEPD as blameless for lack of connection.

At a meeting two days later between SEPD, BSR and representatives of the Chinese investors in BSR, at which Mr Phillipps was present, it was reported that the complaints made in the letter were being taken very seriously. BSR reported losses of £28,000 per day. The reduction in policy to 10MΩ was confirmed, but it was reported that all cores still had sheath faults that did not meet this value, with two having significantly lower values.

Two weeks later, at a meeting between the same representatives, Mr Hitchcock of SEPD explained that they were looking at a plan to re-energise the cable with some sheath faults remaining outside of their policy, by which Mr Hitchcock meant the minimum resistance, now reduced to 10MΩ. He said that, ‘this would be with the caveat that the supply may not [be] as reliable as they would like and on condition that SSE will need to isolate the supply again in the future to carry out further repairs to get the cable up to policy.’ Mr Hitchcock stated that full joint replacement would also be an option.

The following month, on 11 July 2016, Mr Phillipps emailed Mr Baker and others from SEPD about recording the details of the call they had had that afternoon on the subject of energisation, stating that:

“The question as to the extent of works which should be undertaken.

The best case is to re test the circuits following isolation and review the results. Re energise and carry out a regime of outages and tests at 6 monthly intervals until be are confident that the circuits are not degrading further.

Worst case is to take the outage and test then systematically excavate each joint bay on a rolling program as provided to the customer and removal all joints on circuits that do not meet the 10M ohm criteria, a two stage program has been provided to the customer and is circa six months carried out over two financial years. This will result in compensation claims from the land tenant for crop damage and reinstatement of access roads and land in the join bay area. May in fact mean that we are removing good joints from the network. The doubling of the amount of joints on the circuits increasing the risk of future failure. Potential damage to circuits and joint adjacent to the works and currently meeting the required criteria. SEPD will become liable for any reinstate on highways opening notices. May leave SEPD with a large bill for works that are undertaken that can not be recouped from the ICP this cost if unrecoverable will need to be capitalised in some way and may not have any widget based health improvement score associated with it.”

The point is made by Modus, with justification, that at least at this point the ‘worst case’ was being seen as complete joint replacement, rather than full replacement, although the email did highlight the disadvantages of such a remedial scheme, in terms of the doubling of joints on the circuit thereby increasing the risk of future failure, and potential damage caused during the joint replacement works which would take place, by definition, in and around the existing exposed circuits.

The following day, Mr Phillipps wrote to SSF setting out the programme ‘for Temporary energisation’, and indicated, as had been discussed, that following the energisation for the purposes of commissioning, the cable would be tested and the next steps would be considered. The letter also provided the results of sheath testing between various locations. It can be noted that where Circuit 1 from Joint Bay 13 to joint bay 14 had been completely replaced, the readings for all three cables within the circuit were measured in GΩ. Of the 12 other results, 6 showed readings below 10MΩ.

On 18 July 2016, Mr Hitchcock wrote to Mr Baker, copying in Mr Phillipps, noting the latest sheath tests across the entire circuits. The results were as follows:

As Mr Hitchcock then noted, the results did not meet the policy requirement of 10MΩ@5kV “or the reduced requirement of 5MΩ”. There was no further reference in the documents to this ‘reduced requirement’ and both sides proceeded on the basis that the only contractually permitted reduction was to 10MΩ@5kV. Mr Hitchcock stated that the team had been unable to locate any further faults and they risked damaging the cable/joint sheaths by repeat testing. He continued, ‘Replacing all the joints remains an option but this will take months to complete, double the number of joints and may not resolve the problem’. He pointed out that he did not consider there to be any safety implication with energisation, notwithstanding the low resistance values, but following energisation to allow BSR to complete commissioning, he said, ‘we can de-energise, re-test and if necessary plan to replace part or all of the installation’.

By the date of the meeting between Modus and SEPD on 14 September 2016, the circuits had been re-energised to enable SSF to complete commissioning. There was an outage planned to test the cables, as had previously been indicated, the following day. It was minuted that, if the cables failed to meet SEPD’s minimum specification of 10MΩ @ 5kV, Modus had been requested to submit a proposal of works to improve the circuits so that they complied. Modus indicated a reluctance to agree to undertake any further works on the cables as they had not been paid (by BSR) for the original works. The other option discussed was for SEPD to carry out the rectification works and to recoup the costs from Modus. The minutes also indicated that the faulty joints cut out of the circuit had been sent off for independent investigation to ascertain the cause of the faults. This was an investigation by EA Technologies (‘EA’), the results of which were provided in December and are referred to further below.

The testing referred to ended up taking place on 29 September 2016. Out of the 6 cables across the 2 circuits, it showed only one with resistance in excess of 10MΩ. This was confirmed in a meeting between Modus and SEPD on 1 November 2016. As described in an email some time later (in February 2017), the tests did not show any marked improvement over previous test results, but the tests did not show any marked degradation either. The meeting also noted the initial findings from EA which highlighted poor quality jointing techniques, raising concerns of the quality of the remaining joints on the circuit. In respect of its proposal for rectification works, Modus said that they would not be prepared to replace remaining joints, nor to overlay both circuits. Modus also indicated that they could not claim the costs of the faults from insurers as their policy did not cover poor workmanship.

On 15 November 2016, at the now regular SEPD/BSR meeting, it was reported that Modus had agreed with SEPD that only the defective sections required remediation, which could take 12 weeks (working 7 days a week). BSR indicated the importance of timing given the loss of generation.

EA produced a report, dated 13 December 2016 (‘the EA Report’), which identified the results of their investigations. EA analysed 10 sample joints which were removed from the circuits. The joints were not randomly selected. They were the joints which had faults or had been identified as sub-standard by inspection. The EA conclusions included the following criticisms:

In respect of the foregoing, Modus admitted, in its Defence, (1) to (7) and (9); it denied (8) on the basis of its comments in the Lloyds report, referred to above, that the backfill material was to the SEPD specification. No other evidence was adduced to support this contention. It admitted the wording of (10), contending that the conclusion was not ‘entirely’ attributable to Modus.

The EA Report concluded, amongst other things, that if other, similar joints remained, and poor quality backfill was still present, the probability of failure of this cable circuit was high in the short to medium term due to the ingress of moisture into the joint/cable, the likelihood of partial discharged activity and the impact damage to the internal joint components. It said that corrosion of the copper wire screen could result in a reduction in the level of protection offered to the connected equipment and personnel who may be working near these circuits. It therefore stated that, ‘consideration should be given to the replacement of this cable circuit because of the potential safety risks to personnel and the likely continuing degradation of the cable’. Modus accepted, as they must, the fact of this conclusion, but emphasised the contingent nature of the potential issue (…if other joints….), and noted that the advice was not ‘definitive’.

Following the issuance of the report, Modus and SEPD met on 24 January 2017. The minutes stated that:

“The General conclusion from the E.A Technology report was that the joints had failed due to poor Jointing Practices. One of the recommendations from the report was to replace the cable circuits. SSEN stated that the findings of this report has dented their confidence in the quality of the remaining joints on the circuits and requested that these joints be replaced.”

The minutes also noted the rejection of Modus’ proposal to replace the cable between Joint Bay 12 and Toothill substation, and it was agreed that the joints which had been replaced and witnessed by SEPD during the fault location works would not require replacing. It was agreed to include the solar farm owner in the forthcoming meeting to discuss proposals. Thus, notwithstanding the EA recommendation, at this point SEPD were not anticipating the replacement of the entire cable.

Mr Phillipps explained in his witness evidence that at this time SEPD did not wish to fund the replacement of the cables out of its own pocket. On 9 February 2017, Mr Phillipps wrote to a Mr Virno of Rockfire Capital Limited (‘Rockfire’), a company which had a significant financial interest in the solar park and, as a consequence, its continuing ability to provide power into the network via the circuits. The email set out three remedial options open to discussion: (i) full replacement of both circuits and all the joints at £2,795,069; (ii) replacement of all joints and up to 10% partial replacement of the circuit at £1,046,631; and (iii) replacement of all joints that had not already been replaced which would have been £878,860.00. Mr Phillipps confirmed in evidence that option (i) was an ‘in-line replacement’ (rather than to a new, separate route), and at the time this envisaged being undertaken whilst the customer remained connected to the grid. In his witness statement, Mr Phillipps explained that there was a risk with options (ii) and (iii) in that, in essence, in neither scenario was there a certain scope of works from the outset. A full replacement was, he said, much more controllable, as all the risks could be built into a fixed program and quoted for by the contractor. Although Mr Phillipps accepted in cross-examination that there was no ‘formal’ risk assessment, and that, indeed, it was not his particular job to manage the risks, it is plain that the different options involved different risks, and I accept his evidence that the risks involved were being considered at the time, even if not being written down formally. For example, on 20 February 2017 Mr Chigbo of SEPD was providing comments on a draft specification for works based on Mr Phillipps’ notes. Mr Chigbo stated, “I wanted to have a brief discussion with you about the proposed repair works as to the replacement 90% of the entire cable circuit. Which EA Tech put down as their first recommendation. I strongly feel that the risk in just doing the repair works is very high compared to replacing the majority of the cable. Let me know when you are free so we can discuss”. It was not suggested to Mr Phillipps that the substance of the matters he was raising by way of risk implications identified for the various options were themselves misconceived or unjustified, no doubt because there is no evidential foundation from which such a positive assertion could have been properly put by Mr Smith.

A more formal estimate of costs was then provided to Rockfire a few weeks later, on 2 March 2017. This estimated (i) at £3,2000,000; (ii) at £950,000; and (iii) at £850,000, each plus VAT. Full (in-line) replacement was estimated to take 24 months, and the other options 6 or 7 months, but during which period the solar farm would not be able to export electricity.

On 23 March 2017, there was a further meeting between Modus and SEPD, at which it was reported that Modus had submitted their rectification work plan. On the basis of the most recent testing, the report indicated that 6 lengths, both between Joint Bay 14 to Toothill and from Joint Bay 12 to Wroughton and across both circuits were out of specification. The proposal sought to concentrate on getting Circuit 1 up to specification in a first phase of works (in 2017) and on Circuit 2 in a second phase (2018). The plan involved excavating to expose joints, testing and installing new joints as necessary. The planned programme was 3 months and was subject to and critically dependent upon the works being carried out in dry conditions. Both circuits were to be isolated during both sets of works. Modus indicated that, whilst ultimately it would be for SEPD determine whether to adopt the plan, it did not have the financial strength to either replace all the joints or overlay the entire route.

In April 2017, a report was prepared by Durkin & Sons, one of SEPD’s framework contractors for cable and capital works. It considered two options, having undertaken a site visit. The first was partial joint repair, and the second a replacement, along the existing route. As to the first option, various potential difficulties were highlighted, a number of which led to the conclusion that it was recommended there be an investigation regarding the existing duct installation which would be required before accepting any liability for its suitability. Mr Alyah fairly accepted that because the circumstances in which the report was prepared, and the information provided to Durkin, was unknown, the report was of no assistance in assessing the future risks associated with the circuits. That said, one of the important points made (‘the network cannot be warranteed [sic] as the existing cable installation remains suspect and already faults in winter/wet conditions. Contractor cannot accept liability for works not undertaken by them i.e. duct installation and cable installation’) does not depend on a detailed understanding of particular risks: it was a statement of the unsurprising and usual position that pertains to a repair solution (the end product of which entails the interaction of both the original and the repair works for which different parties have legal responsibility) rather than complete replacement (where responsibility can lie with a single party). Durkin also pointed that ‘due to the amount of variables in respect of the existing installation and the requirement to continually test back it is not possible to state with any certainty a completion date’ and warned, ‘we would be installing a further minimum 96 joints, or weak points onto already weakened cables’. The steer away from carrying out a joint replacement solution was clear. The contemporaneous views of an independent (although not completely uninterested) third party when asked to consider a partial remediation as to the practical and technical concerns and the benefits of competing options cannot be discounted as irrelevant.

On 15 May 2017, Mr Phillipps was involved in an email exchange during which the possibility of ‘unadopting’ the cables was discussed, so that the customer could affect its own repair solution which would not involve being off supply for up to six months. In evidence, Mr Phillipps explained that the value placed on the cable for the purposes of selling back was £1, equivalent to the value placed on an asset beyond its life cycle. Mr Phillipps made reference to loss of £50k per day, notwithstanding the previous communications which referred to lower figures. On any view, the potential losses to the customer were significant. Mr Phillipps concluded, ‘The project has already been subject to a CEO complaint and Colin Nichol [Managing Director of SSEN] has been involved in one meeting with the previous owners before the site was sold, so it is a high profile issue…’. That option, in the event, did not seem viable for either SEPD or Rockfire.

At a meeting on 30 May 2017, between SEPD, Modus and Rockfire, Modus indicated that they would not consider further rectification works until their dispute with BSR had been resolved. However, Modus offered a fund of up to £660,000 as a contingency pot that would be paid to SEPD to facilitate the repair of any future failings in the circuit. This was minuted as being unsatisfactory to SEPD: the proposal did not increase confidence in the long term performance of the circuits, and would not enable SEPD to be able to provide reassurance to the end customer (the solar farm) that they would not experience unplanned outages due to faults in the future. In addition, SEPD would not be able to address land owner concerns regarding repeated access and disruption due to an unknown number of faults over an unknown period of time. Mr Phillipps is recorded as saying that SEPD would now ‘proceed with carrying out the rectification works, in the most economical way to ensure the long term performance of the circuits and to realistically manage the end customer and affected landowners/tenants expectations of minimal disruption….’. This was then stated to be the replacement of all the original joints on both circuits that had not already been replaced during previous works and any cable sections found to be faulty during testing of the works (i.e. what had been referred to as option (iii) above). Modus stated that they did not have the funds to cover these costs and ‘would seriously put their company in jeopardy’.

By mid-June 2017, however, clear views were being expressed internally that replacement of the cable was the better option. On 12 June 2017, Hilton Howsen, the Project Manager (Design) for SEPD, stated:

“Due to the uncertainty over the quality of the workmanship, the Durkin Option 2 [i.e. replacement along the same route] appears to be the most feasible and cost effective option. In addition to the replacement of cables and joints, consideration should be given to removing the backfill material around the ducts and replacing it with sand or CBS. Also, the reinstatement materials and top soil should be installed to the correct specification.

If a double circuit outage cannot be tolerated for an extended period, it would be necessary to consider a third option of constructing one completely new circuit offline, and rehabilitating one existing circuit later.”

Mr Dickson responded,

“I totally agree with your summary that Option 2 would be the preferred option. Unfortunately as SSE will be looking to recover the costs form the ICP who installed these circuits, we have to be very careful how we proceed. If we can get the contractors to give us price on both options this will give us some evidence to present to senior management who can then make the final decision how they would like to proceed with these works. Could you put together a bill of quants for both options….”

At the end of June 2017, there was an exchange in which the Lead Project Manager for Cables and Over Head Lines expressed the view, by reference to experience on a different project, that they should just concentrate on joints, by which he meant joint replacement as a remedial solution, rather the replacement of the cable which, because it passed a pressure test and had been in service for about 18 months, they could regard as fit for purpose. Mr Phillipps accepted that he did not respond to this at the time, but pointed out that Mr Rooney was a civil engineer rather than an engineer with electrical qualifications. Either way, it is evident that different people within SEPD saw different technical solutions as being the way forward. It is not correct, as urged upon me in submissions by Mr Smith, that the universally acknowledged preferred option within SEPD was joint replacement: it clearly was not. It was not Mr Dickson’s view, who plainly preferred the option of cable replacement for the technical reasons advanced to him by Mr Hilton.

On 4 August 2017, Mr Smart sent to Mr Dickson an excel spreadsheet entitled ‘CS BB financial analysis of options’. This was accompanied by a word document entitled ‘Remedial Proposals for Wroughton 33kV’ and which was stamped ‘Draft outline for initial comment’, into which Mr Dickson had inserted his comments. Following his changes to the introduction, it included the following text (largely from Mr Dickson’s drafting), after setting out the original six sheath faults which were identified close to the PV substation:

In cross-examination, Mr Dickson accepted that the reference to the ‘minimum request’ of replacing all the joints was what SEPD wanted at the time; however the context of this, of course, is that the ‘minimum request’ was a reference to SEPD’s ‘request’ to Modus to carry out remedial works at Modus’ cost (so that capital expenditure was not required by SEPD). As the text goes on to state, Modus indicated that they did not agree that there was a need to replace all the joints and, as they had indicated previously, they did not in any event have the funds to cover the costs for such an undertaking. No agreement could be reached with Modus, therefore, and it would be for SEPD to carry out what it considered to be the appropriate remedial works at their own cost, subject to any potential recovery.

The accompanying table and spreadsheet set out the options. Option 1 was joint replacement, at a cost of £551,080 with £8.0m of consequential loss (160 days x £50,000); Option 2 was cable and joint replacement within existing ducts at a cost of £1,415,920 with the same consequential loss (this is referred to as ‘in-line replacement’); Option 3 was cable and joint replacement with a plough at a cost of £1,848,825 with consequential loss of £750,000 (15 days x £50,000); Option 4 was complete circuit replacement at contractor rates at a cost of £1,920,270 with the same consequential loss; and Option 5 was complete circuit replacement at in-house rates, at a cost of £1,656,357 and the same consequential loss. It might be noted that the ‘in-house’ rates effectively exclude the cost of what appears to be labour, presumably on the basis that there is not a ‘cash’ cost to the business using existing employees. However, this is not really a valid comparison, in circumstances where using in-house labour does not, in reality, generally come at zero cost. In any claim for damages, SEPD would be entitled to claim the notional in-house cost of employing its own workforce.

The spreadsheet is as follows:

It is clear from the text within the ‘Conclusion’ quoted above that Options 4 and 5 involved the routing of the cable in the existing easement, in a separate new trench with new ducting, in order to maintain the existing circuits as live during the works. It can be seen that some cost differential existed between Option 2 and Options 4/5. Although it is not stated in terms, the figures for ‘Option 2’ (in-line replacement) seem to be third party contractor costs: this can be discerned from the fact that costs are claimed for various items in both Options 2 and 4, but excluded from Option 5. On the face of this document, therefore, the comparison is between c£1.4m for using the existing ducts and £1.9m the new trench/ducts. This delta of c£500,000 should be treated with some caution in circumstances where (a) these figures differ from those quotes referred to above provided to SFF for in-line replacement, of c£2.9m and £3.2m; and (b) the actual costs incurred for complete replacement were £2.4m (rather than £1.9m).

In terms of other factors relevant to each of the options, the following technical risks/advantages set out in the document included the following:

Consistent with the stated intention that the developer would contribute to the capital cost of replacement of the defective circuits, there followed correspondence from Mr Dickson to Ms Warnock, PA to the CEO of Rockfire, in October 2017 chasing their formal position on a contribution, stating that such a letter would be critical in the decision of what type of rectification works would be progressed.

On 3 November 2017, the CEO and Founder of Rockfire emailed Mr Dickson, seeking to emphasise the importance of avoiding an outage during the anticipated remedial works, in terms of the wider social impact of a lengthy interruption to the supplies on the local council and the fact that this was a large public interest project. This email stated:

Mr Dickson replied ten days later, stating that SEPD had had an internal meeting to discuss the proposals for repairing/replacing the cables, and asked to arrange a meeting/ call to discuss its proposals and in particular the potential contribution towards an ‘enhanced’ scheme to replace the cables. The reference to the ‘enhanced’ scheme was a reference to one in which the cables were routed in a separate trench allowing the existing circuits to remain in use during the period of the works.

Contemporaneous records include an undated extract from what appears to have been a later, updated version of the same options paper. In respect of the position of the Solar Park Owner, the report stated, after noting (as had the previous version) that ‘some contribution could be made towards the remedial works if there is an option to reduce the time that the Solar Park is offline’:

Evidently following discussions, a further letter was in due course provided by SSF on 30 January 2018. The letter said:

The contribution was to be £700,000 paid over several instalments, and made conditional on part or all of the contribution being repaid if SEPD was successful at recovering any expenditure back from Modus.

Mr Dickson confirmed in cross-examination that there was no contractual liability on the part of SEPD to recompense Rockfire in respect of its losses for outage, and it could have said, in effect, ‘tough luck’. When asked directly why SEPD did what they agreed to do, Mr Dickson’s answer, which I take to be true, was:

Mr Dickson was therefore clear, and I accept, that the pressure from Rockfire was one of two principal influencing factors in decision making. Although in circumstances where Mr Dickson said in terms that he did not make the ultimate decision, and he was not aware of what leverage existed in the absence of a liability to pay to SSF consequential losses, the contemporaneous correspondence makes clear that the pressure being put upon SEPD by SSF related to the importance of continued generation in the summer months to the local community.

The second influencing factor was the unknown risk of how long a repaired (rather than replaced) circuit would last. This concern was clearly set out in the options paper referred to above, which considered that restricting the solution to replacing the joints would leave SEPD with a ‘compromised final installation’. Other contemporaneous evidence, referred to above, also demonstrates that this remained a concern actively being articulated within SEPD at the time, and was a continuing concern which both Mr Phillipps and Mr Dickson repeated in their evidence. I do not consider that it is likely on the evidence I have seen and heard that (unless perhaps in circumstances where Modus had agreed to fully fund the works, which did not happen), SEPD would ever have agreed to carry out ‘Option 1’ and saddle themselves with a ‘comprised final installation’. Moreover, even if they had at various times contemplated this, that contemplation did not fix for all time what an objectively ‘reasonable’ decision was.

A formal agreement between SEPD and SSF was then entered into, some time later, in November 2018 (‘the Remedial Agreement’). The recitals set out as follows:

The Remedial Agreement provided for cable replacement to be carried out on a different route, not alongside the existing route. This was therefore a move away from ‘Option 5’, which had been predicated on an ‘overlay’ in a trench alongside the existing route within the same 3m easement, albeit keeping the existing circuits live during the works. Mr Phillipps’ evidence was that this development was because the landowners and tenants (whom he described as ‘unhappy’ having dealt with access during the original and the remedial works) could have made further access to the existing cable difficult. This was given as a reason independent from the ‘outage point’. Mr Phillipps pointed out, and I accept, that there was considered a risk of disturbing the existing circuits if working within the same or even an immediately adjacent easement (at least if the existing circuits are live).

The Remedial Agreement also provided for the agreed contribution of £700,000 and an obligation to make a repayment, less a contribution towards costs of obtaining any recovery, should recovery be made against any third party in respect of the defective cable. Mr Dickson could not be sure, when asked, what the ‘preferred method’ the Remedial Agreement made reference to, but accepted it was likely to be Option 1 or 2. As set out above, I consider it unlikely that at this stage the ‘preferred method’ referred to the replacement of joints, given SEPD’s concern that this would leave them with a final installation which remained ‘compromised’. This is also reflected in Mr Dickson’s evidence quoted above, as well as Mr Phillips’ evidence which I accept, that ‘SSE did not want to pay for replacement works. If funding had not been an issue, SSE would have made the decision to replace the circuits. If we’d had the funds and mechanisms to replace the circuit, we would have done so, because that was the right decision. This has probably been the most problematic connection we’ve had: with all the internal meetings, customer meetings and updates, it was very time consuming for all involved.’

Therefore, the reference within the recital to the Agreement to SEPD’s ‘preferred method’ must have (at least by reference to the 5 Options identified above) been a reference to Option 2, in-line replacement, the only Option which (a) replaced the entire cable in existing ducts but (b) required a lengthy outage.

Mr Smith suggested that the Remedial Agreement also involved SEPD taking on a warranty in respect of the quality of the works, such that any future outages could give rise (if caused by a breach of that warranty) to damages for lost generation revenue which were otherwise excluded from the Connection Agreement. It is neither necessary nor appropriate to express any definitive view on this, in circumstances where the proper meaning of the Remedial Agreement may be the subject to some future dispute between SEPD and SSF. It is sufficient to say that it is not clear that such a significant liability was taken on by SEPD, and one reading of the Remedial Agreement is that the rights and liabilities of the parties in respect of the new cable were as they were under the existing Connection Agreement.

Pursuant to the Remedial Agreement, the ‘full replacement’ works were carried out, and SEPD were paid the anticipated £700,000 contribution by SSF. The actual cost was £2,453,327.75. It is agreed that, notwithstanding some evidence given by Mr Dickson, the work was carried out by third party contractors. The sum is therefore less than the quotes provided to SSF for in-line replacement early in 2017 (c£2.7 and c£3.2) but more than the estimate for Option 2 at c£1.4m (and, indeed, more than the estimate for third-party cost of complete replacement of c£1.9m).