EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lady Paton Lady Dorrian Lord McEwan	[2009] CSIH 92 A839/04 A840/04 A842/04 OPINION OF THE COURT delivered by LADY PATON in the cause MORRISON SPORTS LIMITED AND OTHERS Pursuers and Respondents; against SCOTTISH POWER Defenders and Reclaimers: _______

Pursuers and respondents: Ivey Q.C., P. Stuart, Advocate; Andersons

Defenders and reclaimers: Cullen Q.C., Barne, Advocate; Shepherd & Wedderburn

8 December 2009

Introduction

[1] These three reclaiming motions concern the proper construction of the Electricity Supply Regulations 1988. The pursuers contend that the regulations give them a civil right of action to recover damages in respect of alleged breaches of Regulations 17, 24 and 25. The defenders submit that no such right arises. After debate, Lord Wheatley sustained the pursuers' argument, and by interlocutor dated 18 July 2007 allowed a proof before answer in each case on the pursuers' averments including averments of breaches of the regulations as set out in Article 6 of Condescendence. The defenders reclaimed, seeking to exclude the statutory case from probation.

The events giving rise to the claims

[2] On 6 March 1998, a building at 23 Moss Street, Paisley, was destroyed by fire. Investigations identified the seat of the fire as an electricity meter cupboard in the ground floor sports shop. It was thought that a metal shim wrapped around the prongs of a fuse to improve the fit in the fuse-holder had caused arcing, leading to fire. The neighbouring building at 25 Moss Street was damaged and had to be demolished. The gable wall between 23/25 and 27 Moss Street was left exposed and had to be made weatherproof.

[3] Actions of reparation were raised against the defenders as suppliers of electricity to the sports shop. The parties seeking reparation are Morrison Sports Limited, the tenants of the sports shop; Brian Pitchers, the owner of the buildings at 23 and 25 Moss Street; and Baljit Singh and six others, the owners and occupiers of tenement flats at 27 Moss Street. The pursuers blame the defenders' employees, alleging negligence at common law and breaches of the Electricity Supply Regulations 1988. Morrison Sports Limited claim in respect of lost stock, contents, and profit. Brian Pitchers claims in respect of the value of the properties destroyed, demolition costs, professional fees, the cost of meeting smoke and water damage claims, loss of rental income, and demolition and repair costs. Mr Singh and others claim in respect of the cost of weatherproofing the exposed gable wall.

[4] The defenders deny that their employees inserted the metal shim in the fuse, and suggest that someone else tampered with the fuse. They also contend that the pursuers' cases so far as based on the 1988 Regulations are irrelevant.

The statutes and regulations

Excerpts from the primary legislation

[5] Section 3C of the Electricity Act 1989 provides for consultation by the Secretary of State and the Gas and Electricity Markets Authority with the Health and Safety Executive about all electricity safety issues, defined as:

" ... anything concerning the generation, transmission, distribution or supply of electricity which may affect the health and safety of -

(a) members of the public ..."

[6] Section 29 of the 1989 Act (the successor to section 16 of the Energy Act 1983, which provided for the making of regulations for the supply of electricity, including "the eliminating or reducing of the risks of personal injury, or damage to property or interference with its use, arising from the supply of electricity") provides inter alia:

"Regulations relating to supply and safety

(1) The Secretary of State may make such regulations as he thinks fit for the purpose of -

(a) securing that supplies of electricity are regular and efficient;

(b) protecting the public from dangers arising from the generation,
transmission or supply of electricity, from the use of electricity supplied or from the installation, maintenance or use of any electric line or electrical plant; and

(c) without prejudice to the generality of paragraph (b) above, eliminating or reducing the risks of personal injury, or damage to property or interference with its use, arising as mentioned in that paragraph ..."

[7] In terms of section 29(2) of the 1989 Act (the successor to section 16(2) of the 1983 Act and similar in its content), the regulations may contain powers to prohibit systems not approved by the Secretary of State; to require notice to be given to the Secretary of State of accidents or failures in supply; to provide for the keeping of maps and plans by the electricity supplier; to require compliance with Notices issued by the Secretary of State (for the purpose of preventing or ending a breach of the regulations, or eliminating or reducing a risk of personal injury or damage to property or interference with its use); to provide that compliance with certain specified standards will be deemed to be compliance with the regulations; and to provide a power to grant exemptions from the regulations.

[8] Section 29(3) of the 1989 Act further provides:

"Regulations under this section may provide that any person -

(a) who contravenes any specified provision of the regulations; or

(b) who does so in specified circumstances,

shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale [£5,000 at the relevant time]; but nothing in this subsection shall affect any liability of any such person to pay compensation in respect of any damage or injury which may be caused by the contravention."

[9] Section 39 of the 1989 Act provides that the Director General of Electricity Supply may make regulations prescribing standards of performance in the supply of electricity. Section 39(3) and (4) provide:

"(3) If a public electricity supplier fails to meet a prescribed standard, he shall make to any person who is affected by the failure and is of a prescribed description such compensation as may be determined by or under the regulations.

(4) The making of compensation under this section in respect of any failure by a public electricity supplier to meet a prescribed standard shall not prejudice any other remedy which may be available in respect of the act or omission which constituted that failure."

[10] Schedule 17 to the 1989 Act provides inter alia:

"2 ... Any regulations made under section 16 of the Energy Act 1983 which are effective on the day appointed for the coming into force of section 29 of this Act shall have effect as if -

(a) they were made under the said section 29 ..."

Excerpts from the secondary legislation

[11] The Electricity Supply Regulations 1988 (S.I. 1988 No.1057, made originally under section 16 of the Energy Act 1983) provide inter alia as follows:

"3.-(1) In these Regulations, unless the context otherwise requires ...

"danger" includes danger to health or danger to life or limb from shock, burn, injury or mechanical movement to persons, livestock or domestic animals, or from fire attendant upon the generation, transformation, supply or use of energy ...

"supplier's works" means electric lines, supports and apparatus of or under the control of a supplier used for the purposes of supply, and cognate expressions shall be construed accordingly ...

Sufficiency of supplier's works

17. All supplier's works shall be sufficient for the purposes for, and the circumstances in, which they are used and so constructed, installed, protected (both electrically and mechanically), used, and maintained as to prevent danger or interruption of supply so far as is reasonably practicable ...

Inspection of supplier's works

24. The supplier shall take all reasonably practicable steps to inspect his installations and works to ensure compliance with these Regulations.

Supplier's works on consumer's premises

25. (1) The supplier shall ensure that all his works on a consumer's premises which are not under the control of the consumer (whether forming part of the consumer's installation or not) are -

(a) suitable for their respective purposes;

(b) installed and, so far as is reasonably practicable, maintained so as to prevent danger: and

(c) protected, so far as is reasonably practicable, by a suitable fusible cut-out or automatic switching device as close as reasonably practicable to the supply terminals.

Provided that no such fusible cut-out or automatic switching device shall be inserted in any conductor connected with earth...

Exemption from requirements of Regulations
37. (1) Where a request is made to the Secretary of State to grant an exemption from a requirement of these Regulations, that request shall be made in writing and shall state the full extent of the reasons for the exemption sought.

(2) Where the Secretary of State is satisfied that an exemption may be granted without prejudice to safety or interference with the supply of others, the Secretary of State may grant such an exemption as he thinks appropriate."

The averments challenged: Article 6 of Condescendence

[12] In each case, Article 6 of Condescendence is in the following terms:

"Separatim the fire at the premises was caused by the defenders' breach of statutory duty. The defenders were in breach of the duties incumbent upon them as suppliers of electricity under and in terms of the Electricity Supply Regulations 1988.

Regulation 17 is in the following terms:

'All supplier's works shall be sufficient for the purposes for, and the circumstances in, which they are used and so constructed, installed protected (both electrically and mechanically), used, and maintained as to prevent danger or interruption of supply so far as is reasonably practicable.'

The cut-out fuse was part of the suppliers works as defined by the said Regulations. In its condition as at the time of the fire the fuse was not sufficient for the purposes for which and the conditions in which it was being used due to the presence of the shim. The fuse as fitted with the shim by the defenders' employees had not been installed, protected, used or maintained so as to prevent danger so far as was reasonably practicable.

Regulation 24 is in the following terms:

'The supplier shall take all reasonably practicable steps to inspect his installations and works to ensure compliance with these Regulations.'

As hereinbefore condescended upon the defenders installed night storage heaters and a night meter in the pursuer's premises approximately 2 years prior to the fire. Following completion of the said works it would have been reasonably practicable to carry out an inspection of the works. Esto as the defenders aver, the shim had not been fitted by their employees (which is denied), such an inspection would have revealed the presence of the shim around the prongs of the cut-out fuse.

Regulation 25 thereof is in inter alia the following terms:

'(1) The supplier shall ensure that all his works on a consumers premises which are not under the control of the consumer) whether forming part of the consumer's installation or not) are -

(a) suitable for their respective purposes;

(b) installed and, so far as is reasonably practicable, maintained so as to prevent danger.'

The defenders failed to ensure that their works on the pursuer's premises were suitable for their respective purposes and that they had been installed and, so far as was reasonably practicable, maintained, so as to prevent danger. The defenders' employees fitted a shim to the prongs of the cut-out fuse. Esto as the defenders aver, they did not fit the shim (which is denied) the shim was present when they carried out the works of installing the storage heaters and the storage meter prior to the fire. The defenders' employees would have required to remove and refit the cut-out fuse in order to carry out the said works. Once the cut-out fuse had been removed the presence of the shim would have been obvious. As hereinbefore condescended upon in those circumstances the defenders' employees ought to have removed the fuse and re-fitted a fuse without a shim. The defenders' employees ought not to have re-fitted the fuse with the shim. In the exercise of each and all of the statutory duties incumbent upon them the defenders failed and by their said failures caused the fire. But for the said failures in duty the fire would not have occurred. The defenders' averments insofar as not coinciding herewith are denied."

Submissions for the defenders and reclaimers

[13] Counsel for the defenders and reclaimers submitted that the Lord Ordinary had failed to acknowledge the basic starting-point, namely that a breach of statutory duty did not normally give rise to a private right of action. General statutory provisions intended to reduce or eliminate risk of injury or damage did not necessarily import an intention to confer private law rights on individuals: R v Deputy Governor of Parkhurst Prison [1992] 1 AC 58, Lord Jauncey at pages 170-71; Phillips v Britannia Hygienic Laundry Co Ltd [1923] 2 KB 832, at pages 839-842. Private law rights of action only arose if the two-fold test set out by Lord Browne-Wilkinson in X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at page 731 was satisfied, i.e. whether the statutory obligation was imposed for the protection of a limited class of the public, and whether Parliament intended to confer on members of that class a private right of action for breach of the duty. The pursuers had failed to satisfy that test.

[14] Counsel further contended that, when construing the primary and secondary legislation, the chronologically later Electricity Act 1989 should not be taken into account. Parliament's intention could only be discerned from the legislation under which the 1988 Regulations had been made, namely the Energy Act 1983. The pursuers' approach (namely construing the regulations by taking the 1989 Act into account) was dependent upon a transitional provision in Schedule 17 to the 1989 Act, but the purpose of that provision was simply to keep the 1988 Regulations in force despite the repeal of Part I of the Energy Act 1983. It would be revolutionary to impute to an earlier Parliament the intention of a later Parliament. Government policies might have changed (for example, in relation to the privatisation of industries). If Parliament had wished regulations to be interpreted in terms of the 1989 Act, it should have promulgated a fresh set of regulations under that Act. The pursuers' case was heavily dependent upon the 1989 Act. Thus in order to succeed, the pursuers had to convince the court that it was legitimate to construe the 1988 Regulations in the light of the later 1989 Act: but they could not do so.

[15] Focusing then on section 16 of the 1983 Act, counsel drew attention to indicators of Parliament's intention: cf Lord Browne-Wilkinson in X (Minors) at page 731E. Counsel submitted that those indicators pointed away from the conferring of private rights of action.

(i) No specific class was identified: The Lord Ordinary's definition of a class as "consumers of electricity" had not in fact been advanced at the debate by counsel for the pursuers. Nor was that definition currently advanced. Any definition such as "those whose persons or property were potentially endangered by a breach of the regulations" was in effect a definition of the public in general: cf Phillips cit sup (the dicta of Atkin LJ being obiter, unsupported by other members of the court, and doubted by the Court of Appeal in paragraphs 20 and 29 of Todd v Adams and Chope ("The Margaretha Maria") [2002] 2 Lloyds Rep 293); cf too the wide-ranging terms of Regulation 17 and the definition of supplier's works in Regulation 3, making it clear that the range of persons potentially affected in today's society would be everyone. Finally, any attempt to define a class as "those likely to suffer personal injuries or damage to property" would be circular.

(ii) There were means of enforcement other than criminal sanctions: The 1988 Regulations provided a comprehensive scheme regulating the supply of electricity, with detailed provisions for inspection and enforcement by a Notice procedure in addition to criminal sanctions. The regulations contained inter alia a dispute resolution procedure (regulation 38); inspection by the supplier to ensure compliance (regulation 24); and notification to the Secretary of State of certain events, such as fires and failures in supply (regulations 34 and 35). With such a range of enforcement procedures, it was clear that Parliament did not intend to confer additional private rights for personal injury or property damage: X (Minors) v Bedfordshire County Council, Lord Browne-Wilkinson at page 731F; Groves v Wimborne [1898] 1 QB 402; Cutler v Wandsworth Stadium Ltd [1949] A.C. 398, Lord Simonds at pages 408-409. Thus, on one view, there was no need to consider whether an obligation had been imposed for the protection of a particular class of individuals, because Parliament had made it clear how the obligations were to be enforced.

(iii) Exemptions from the regulations were permitted: The legislation empowered the Secretary of State to grant exemptions from the statutory obligations. That was a clear indication that Parliament had not intended to confer private rights, for a situation could arise where the same breach of the regulations would be actionable in one part of the United Kingdom, but not in another part.

(iv) The nature of the regulations envisaged by the parent Act: The introduction of detailed and complex regulations in a situation where there were already pre-existing duties of care was an indicator that the creation of a new array of private law rights was not envisaged: cf Neuberger J at paragraph 29 of Todd v Adams and Chope.

(v) The regulations related to a duty to supply electricity to the public: The supply of electricity was undertaken for the benefit of the public at large. In those circumstances, Parliament did not envisage imposing a potentially open-ended liability on the suppliers of electricity by means of legislation. A minor breach of an electricity regulation could result in significant damage. Parliament could not have intended private liability rights to arise in such circumstances.

[16] Counsel further submitted that reported decisions relating to the supply of electricity did not provide clear guidance. In Alexandra Hotel (Ballater) Ltd v Scottish Hydro Electric plc 1998 SLT 668 and McLean v Scottish Power plc 2000 GWD 4-157, there had been an assumption that the regulations gave rise to a private right. No argument to the contrary had been presented. In AE Beckett & Sons v Midland Electricity plc [2001] 1 WLR 281, the issue had been raised, but was not the subject of appeal. In the present case, the Lord Ordinary had taken too much from the passage concerning the court's "greater willingness" in Clerk & Lindsell, Torts (19^th ed) paragraph 9-24. There was no presumption that health and safety legislation created civil actionability: the two-fold test in X (Minors) had to be satisfied. The application of that test to delegated legislation was helpfully and convincingly explained in Todd v Adams and Chope. The only tenable construction of the legislation pointed away from the conferring of a civil remedy. The pursuers' position appeared to be that only some of the 1988 Regulations, for example, regulation 25, gave rise to private rights. But other regulations had to be considered, for example regulation 32 relating to a duty to provide a constant supply of electricity. It would be inequitable if the defenders could be held liable for all losses arising from interruption of the supply of electricity, including, for example, the death of a child in an incubator. While the pursuers suggested that the more extreme claims would be filtered out by arguments about remoteness, the potentially wide-ranging nature of possible claims was nevertheless an important factor to consider when ascertaining Parliament's intention.

[17] If, contrary to the defenders' position, account were to be taken of the 1989 Act, then one did not find any express or implied power to make regulations containing duties enforceable by civil action. The public scope and reach of the legislation was clear from section 29(1)(a) and (b). The remaining parts of section 29 concerned the issuing of regulations in relation to the supply of electricity, and certain powers of exemption. So the arguments advanced by the defenders in relation to section 16 of the 1983 Act applied mutatis mutandis to section 29 of the 1989 Act, subject to one acknowledged difference, namely the rather tantalising reference to "compensation" at the end of section 29(3). Counsel accepted the force of the pursuers' argument in that regard, but suggested that the reference to compensation simply preserved, for the avoidance of doubt, the possibility of recovering damages at common law for negligence in the performance of a particular statutory duty.

[18] Counsel further argued that the alleged inadequacy of any fine imposed in terms of the enforcement provisions of the statutory scheme should not be viewed in isolation. The entire enforcement procedure (including the Notice system) should be viewed as a whole. The availability of existing common law remedies was highly relevant when assessing parliamentary intention: cf Atkin LJ in Phillips v Britannia Hygienic Laundry Co Ltd, at page 842 (cited by Neuberger J at paragraph 29 of Todd v Adams and Chope); Issa v Hackney London Borough Council [1997] 1 WLR 956, Nourse LJ at page 962E. Parliament must be assumed to be aware of existing remedies in reparation, and to have provided additional remedies such as criminal penalties and the Notice procedure.

[19] Nor was it accepted that the type of language used in the electricity legislation was the type of language familiar in the context of civil rights arising from negligence. A similar sort of statutory language was used in the legislation considered in Todd v Adams and Chope, and Weir v East of Scotland Water Authority, 2001 SLT 1205, yet the courts held that no civil right of action arose. The language of sections 2 to 7 of the Health and Safety at Work Act 1974 was familiar to reparation practitioners, yet the Act specifically provided (in section 47) that those sections were not to give rise to civil liability. Accordingly nothing could be taken from the type of language used.

[20] In conclusion, counsel for the defenders and reclaimers invited the court to allow the reclaiming motions and in each case to exclude the statutory case from probation.

Submissions for the pursuers and respondents

[21] Counsel for the pursuers submitted that the issue was the proper construction of the particular statutory regime. The leading cases, namely Cutler v Wandsworth Stadium [1949] AC 398, Lonhro Ltd v Shell Petroleum Co Ltd [1982] AC 173, R v Deputy Governor of Parkhurst Prison [1992] 1 AC 58, and X (Minors) v Bedfordshire County Council [1995] 2 AC 633, provided guidance, but the reasoning and outcome in each case depended upon the particular statutory scheme being considered. In that context, three propositions could be advanced. (i) A breach of a statutory provision would not in general confer private rights of civil suit, unless the terms of the statute provided for such rights. (ii) The generality of that principle was not affected by the line of authority ending in X (Minors). Each case dealt with a specific statutory regime. (iii) If, on a proper construction of the statute, it could be shown that Parliament intended to confer private rights of action upon members of the public for their protection, it was unnecessary to define a protected class.

[22] Counsel then reviewed Cutler, Lonhro Ltd, Deputy Governor of Parkhurst Prison, and X (Minors). He submitted that in Cutler, the court held that, on a proper construction of the particular statute, there was no parliamentary intention to confer private rights of action on bookmakers at a racetrack: the intended enforcement of rights was by means of criminal prosecution. In Lonrho Ltd, a company sought to recover damages from another company who had evaded an Order in Council and made profits. Again it was held that, on a proper construction of the particular statute, there was no parliamentary intention to confer private rights of action on individuals. The enforcement intended was criminal prosecution, and no exception could be found on the basis that the prohibition was imposed for the protection of a particular class of individuals. In Deputy Governor of Parkhurst Prison, the statutory provisions in question were not prohibitions or duties subject to criminal sanctions, but rather a scheme of prison rules imposing duties in relation to the regime for prisoners. It was held that, on a proper construction of the provisions, Parliament had created an administrative regime entirely silent on any question of sanction or enforcement, and that Parliament had not intended to confer private rights of action on the prisoners. In X(Minors), the statutory scheme imposed duties on local authorities in relation to the care of children. The statute did not provide sanctions or criminal offences. Lord Browne-Wilkinson emphasised that he made no general statement of the applicable law, he was concerned only with the particular statute in question. It was held that no private rights of action were conferred on the children in terms of the statutory scheme.

[23] Against that background, counsel submitted that the only rule which emerged from the leading authorities was that the court should find the intention of Parliament by construing the particular statutory terms in question. In the present case, an issue arose as to whether the court should look to section 16 of the 1983 Act (under which the 1988 Regulations had been promulgated), or to section 29 of the 1989 Act (which in effect replaced section 16). Counsel submitted that section 29 was deemed to be the parent legislation under which the 1988 Regulations should be construed, for three reasons. (1) The terms of section 17(2) of the Interpretation Act 1978. (2) The express terms of paragraph 2 of Schedule 17 to the 1989 Act. (3) The approach adopted in the Electricity Supply (Amendment) Regulations 1990, which amended the 1988 Regulations, referring to those regulations in footnote 2 to paragraph 2 as "effective as if made under section 29" of the 1989 Act. Accordingly counsel invited the court to ascertain the intention of Parliament by construing the regulations in the context of section 29 of the 1989 Act.

[24] Section 29 concerned the supply of electricity and the safety of persons and protection of property from damage arising from that supply. Section 29(3) provided that any person who contravened a specific provision of the regulations should be liable on summary conviction to a fine, "but nothing in this subsection shall affect any liability of any such person to pay compensation in respect of any damage or injury which may have been caused by the contravention". Counsel submitted that the reservation in section 29(3), which was primary legislation, provided the answer to the issue before the court. "Compensation" was not defined in the Act, and should thus be given its ordinary meaning i.e. damages for personal injury and damage to property. What was envisaged by the word "compensation" was a liability to pay compensation for personal injury and/or damage to property arising from a contravention of the regulations. It was a liability which had its source in the statutory contravention. The word compensation did not refer to criminal compensation, as that was unnecessary, such compensation having its source in the sentence imposed by the court. Nor could the word compensation easily be read as referring to damages at common law, as the context was "compensation in respect of any damage or injury which may have been caused by the contravention". As in Stevens v General Steam Navigation Co Ltd [1903] 1 KB 890, the 1988 Regulations were, as a result of the chronologically later wording of section 29(3), properly construed as conferring a private right of action where none may have existed under the 1983 Act.

[25] The pursuers' position was further supported by the fact that the statutory scheme made provision for private rights of action to be conferred in sections in the 1989 Act other than section 29 - for example, section 39 and sections 25 to 27. In terms of section 39, regulations to be made thereunder could include private rights of action. In terms of section 27(5), private rights of action were conferred on persons affected by a licence-holder's failure to comply with the licence conditions. The 1989 Act was therefore a regulatory scheme providing civil rights of action (a type of statutory scheme not referred to by Lord Browne-Wilkinson at page 731H of X (Minors)). Moreover the class upon which the rights of private suit were conferred by sections 27(5) and 39 was broad. In fact, it was not necessary to define the benefited class: cf dicta of Atkin LJ in Phillips v Britannia Hygienic Laundry Co Ltd, and cf Clerk & Lindsell, Torts (19^th ed), at paragraph 9-14 (an approach applied by the Court of Appeal in Roe v Sheffield County Council [2004] QB 653, at pages 672-3, and not disapproved, although not followed by Neuberger J in Todd v Adams and Chope). Esto a definition of a benefited class was required, counsel submitted that, on a proper construction, the 1989 Act gave civil rights of action to members of the public. Arguments relating to remoteness would be available to exclude claims which were too far-reaching.

[26] Counsel contended that it was not necessary, in the present case, to rely upon specific indicators in the legislation, as the intention of Parliament was clear from a proper construction of the statute. Esto it was necessary to consider indicators, the pursuers relied upon six, as follows. (i) The Secretary of State had the necessary power to make regulations conferring private rights of action. Counsel referred to the wording of the 1983 Act and the 1989 Act, particularly the specific saving relating to civil liability in section 29(3), and to the dicta of Lord Bridge at page 160C of R v Deputy Governor of Parkhurst Prison [1992] 1 AC 58. (ii) Parliament intended that a private right of action be conferred: both section 16(1) of the 1983 Act and section 29(3) of the 1989 Act made that clear. (iii) The statute and regulations were designed to protect the physical safety of persons and property, and the courts should construe them accordingly: Clerk & Lindsell, Torts (19^th ed) paragraph 9-24. (iv) The 1988 Regulations were not concerned with general administrative functions involving a broad exercise of administrative discretion, such as the regulations in Deputy Governor of Parkhurst Prison. The 1988 Regulations were limited and specific: cf dicta of Pill LJ in Roe v Sheffield City Council
[2004] QB 653. (v) The language in the 1988 Regulations (particularly regulations 3, 4, 7, 17, 24 and 25) was similar to that which one would expect to find in industrial health and safety legislation. (vi) The remedies provided by the 1989 Act and the 1988 Regulations were highly restricted, suggesting that they were not intended to be the only remedies: cf Smith LJ at pages 408-409 of Groves v Wimborne [1898] 1 QB 402. Further, the availability of a common law alternative was not necessarily decisive: cf Clerk & Lindsell paragraph 9-25.

[27] Counsel for the pursuers did not consider the power to grant exemption from the regulations to be an indicator. The exempting provisions were section 16(2)(g) in the 1983 Act, and section 29(2)(g) in the 1989 Act. On a proper construction of the enabling Act, the exempting provision did not detract from the primary purposes of (a) securing a continuous supply, and (b) eliminating or reducing personal injury and property damage. Both sections 16(2) and 29(2) began with the words "without prejudice to the generality of subsection (1) above". Subsection (1) contained the two primary purposes. Thus the power to grant an exemption in subsection (2) was not to detract from the primary purposes of continuous supply and safety set out in subsection (1): contrast with the legislation considered in Todd v Adams and Chope. Regulation 37 of the 1988 Regulations illustrated the maintaining of the protection, as that regulation provided:

"(1) [An application for exemption must be made in writing]

(2) Where the Secretary of State is satisfied that an exemption may be granted without prejudice to safety or interference with the supply to others, the Secretary of State may grant such an exemption as he thinks appropriate [emphasis added]".

Final response for the defenders

[28] Counsel for the defenders made three points in a final reply:

[29] The Interpretation Act 1978 did not advance matters. The provision in Schedule 17 of the 1989 Act simply kept in force subordinate legislation made under primary legislation which had been repealed.

[30] The fact that Parliament had made express provision for civil rights of action in section 27(5) and 39 of the 1989 Act suggested that section 29(3) should not be construed as conferring civil rights of action. It would have been an easy matter for Parliament to have made a similar express provision in relation to the 1988 Regulations.

[31] Finally, if the pursuers were correct, a breach of the 1988 Regulations would prima facie give rise to claims for pure economic loss, yet that could not have been intended where the purpose of the statute was to protect individuals from personal injury and damage to property.

Discussion

The relevance of the Electricity Act 1989 when construing the Electricity Supply Regulations 1988

[32] Part I of the Energy Act 1983, comprising sections 1 to 26, was repealed in its entirety by section 112(4) and Schedule 18 of the Electricity Act 1989. Thus section 16, under which the 1988 Regulations were promulgated, was repealed by the 1989 Act. Section 16 was in effect replaced by section 29 of the 1989 Act, largely repeating the previous provisions but with some additions and modifications, including the reservation concerning compensation in section 29(3).

[33] The transitional provisions can be found in Schedule 17 to the 1989 Act. Paragraph 3 of that Schedule is in the following terms:

"Any regulations made under section 16 of the Energy Act 1983 which are effective on the day appointed for the coming into force of section 29 of this Act shall have effect as if -

(a) they were made under the said section 29;

(b) references to an Electricity Board were references to a person authorised by a licence to supply or transmit electricity;

and the provisions of Part I [sections 1 to 64] of this Act shall apply accordingly [emphasis added]."

[34] It would have been an easy matter for Parliament simply to provide that any regulations made under section 16 of the Energy Act 1983 should remain in full force and effect despite the repeal of Part I of the 1983 Act. Such a provision would have avoided the unwanted lapse of the 1988 Regulations. However Parliament chose to use the specific words "shall have effect as if - (a) they were made under the said section 29". Thus those applying the regulations are directed that the regulations shall "have effect" as if they were made under section 29 of the 1989 Act. We consider therefore that a proper construction of the regulations involves taking into account section 29 as if the regulations had been made under section 29. A failure to do so would fly in the face of the express deeming provision in paragraph 3 of Schedule 17 of the 1989 Act.

[35] The construction outlined above is also supported by section 17(2)(b) of the Interpretation Act 1978, which provides:

"Where an Act repeals and re-enacts, with or without modification, a previous enactment then, unless the contrary intention appears -

... (b) in so far as any subordinate legislation made ... under the enactment so repealed ... could have been made ... under the provision re-enacted, it shall have effect as if made ... under that provision [emphasis added]."

[36] Further the construction is consistent with the approach adopted in secondary legislation amending the 1988 Regulations, namely the Electricity Supply Amendment Regulations 1990. The amending regulations treat the 1988 Regulations as if they had been made under section 29.

[37] Accordingly we are satisfied that we should construe the 1988 Regulations as if they had been made under section 29 of the Electricity Act 1989.

The proper construction of the 1988 Regulations

[38] As Lord Browne-Wilkinson explained in X(Minors) v Bedfordshire County Council [1995] 2 AC 633 at page 731H:

"... the question is one of statutory construction and therefore each case turns on the provisions in the relevant statute ... "

Similarly Neuberger J observed in Todd v Adams and Chope ("The Margaretha Maria") CA, [2002] 2 Lloyds Rep 293 at paragraph 16:

"It appears to me that the question of whether, by imposing a duty, the legislature intended the breach to give rise to a civil remedy, must ultimately depend upon the construction of the particular statutory provision, bearing in mind the language and purpose of the provision, and all other relevant circumstances. Accordingly as with any question of statutory (or indeed contractual) interpretation, it can be difficult, even dangerous, to attempt to lay down any rules of general application. Of course, cases in which a similar problem has arisen, albeit in relation to a different statutory provision, may provide assistance, particularly so far as the reasoning is concerned. However, in each case the court has to make up its mind by reference to the relevant material available in relation to the particular statutory provision under consideration."

[39] In our view, the proper construction of the particular statutory provision is indeed the fundamental principle which should be adopted. Thus we consider it possible that a particular statute might contain clear language indicating that Parliament intended to confer private rights of action upon members of the public, even although a particular class could not be easily defined. Much depends on the terms of the statute: cf Lord Browne-Wilkinson in X (Minors); Atkin LJ in Phillips v Britannia Hygienic Laundry Co Ltd [1923] 2 KB 832, at page 841; Clerk & Lindsell, Torts (19^th ed) paragraph 9-14; Roe v Sheffield City Council [2004] QB 653, at pages 672-3.

[40] In the present case, section 29(3) of the 1989 Act provides:

"Regulations under this section may provide that any person -

(a)   who contravenes any specified provision of the regulations; or

(b)  who does so in specified circumstances,

shall be liable on summary conviction to a fine ...; but nothing in this subsection shall affect any liability of any such person to pay compensation in respect of any damage or injury which may have been caused by the contravention [emphasis added]."

The 1988 Regulations are deemed to have been made under section 29, and thus section 29(3) applies. Accordingly an important issue in the present case is the meaning of the word "compensation" as used in that subsection.

[41] The word "compensation" is not defined in the 1989 Act. The word is used in several contexts, the meaning varying according to context. "Compensation" may mean, for example, compensation for loss of office or diminution of pension rights (section 55: compensation to chairmen and officers of abolished Councils); compensation to landowners in respect of land compulsorily acquired (Schedule 3 Part III); compensation to any person for loss or damage suffered by reason of a licence holder's breach of duty in failing to comply with a final or provisional order made by the Director General of Electricity Supply (section 27(5)); compensation to any person affected by the failure of a public electricity supplier to meet standards of performance prescribed in regulations promulgated under section 39 of the 1989 Act (section 39(3)). In this case we are concerned with the meaning of "compensation" as the word is used in section 29(3).

[42] In our view, the "compensation" referred to in section 29(3) is not a reference to the compensation provided for in section 39. Section 39 envisages its own set of regulations relating to prescribed standards of performance, including regulations specifically determining what compensation should be available in the event of failure to achieve those standards: section 39(2)-(3). Nor do we consider that the word "compensation" in section 29(3) may properly be construed as a reference to either criminal compensation, awarded during criminal proceedings, or damages arising at common law. A reference to criminal compensation is unnecessary and superfluous, as an award of compensation in criminal proceedings is part of the sentencing procedure. As for the possibility that the word compensation might refer to damages at common law, that in our view is categorically ruled out by the precise wording of section 29(3)(b): the sub-section is quite specific, and refers to "damage or injury which may have been caused by the contravention". That phrase can only mean that it was a breach of the statutory provision (and not a breach of the common law) which caused the damage or injury. Our view is reinforced by section 39(4) of the 1989 Act, for in that subsection there is a reservation of "any other remedy which may be available in respect of the act or omission which constituted that failure". Such wording focuses upon the underlying act or omission which could, depending on the circumstances, constitute negligence at common law and/or a breach of statutory duty. But the specific wording in section 29(3) focuses solely upon a breach of statutory duty causing damage or injury.

[43] The fact that civil rights of action are conferred or reserved elsewhere in the statutory scheme created by the 1989 Act (as in, for example, sections 27(4) and (5) and 39(4)) is in our opinion a further indication of Parliament's intention to confer private rights of action within the scheme. Section 27 provides inter alia:

"(4) The obligation to comply with a final or provisional order shall be a duty owed to any person who may be affected by a contravention of the order.

(5) Where a duty is owed by virtue of subsection (4) above to any person, any breach of the duty which causes that person to sustain loss or damage shall be actionable at the suit or instance of that person."

Section 39 (concerning regulations prescribing standards of performance by electricity suppliers) provides:

"(3) If a public electricity supplier fails to meet a prescribed standard, he shall make to any person who is affected by the failure and is of a prescribed description such compensation as may be determined by or under the regulations.

(4) The making of compensation under this section in respect of any failure by a public electricity supplier to meet a prescribed standard shall not prejudice any other remedy which may be available in respect of the act or omission which constituted that failure."

This is not therefore a regulatory scheme conferring no private rights of action for damages. On the contrary, it is a regulatory scheme conferring certain private rights of action for damages. Thus it is a different type of statutory scheme from those being considered by Lord Browne-Wilkinson in X(Minors) when he noted at page 731G-H:

"Although the question is one of statutory construction and therefore each case turns on the provisions in the relevant statute, it is significant that your Lordships were not referred to any case where it had been held that statutory provisions establishing a regulatory system or a scheme of social welfare for the benefit of the public at large had been held to give rise to a private right of action for damages for breach of statutory duty."

[44] Against that background, while criticisms might be levelled at the style of drafting (in particular the apparent introduction of an important private right of action for damages by reservation in section 29(3) of the 1989 Act), we consider that the plain meaning of section 29(3) is that Parliament intended any member of the public who suffers "any damage or injury which may have been caused by the contravention" of the 1988 Regulations to be entitled to raise an action for damages against the person who contravened the regulations, founding the action upon that breach of statutory duty.

[45] We accept that a similar reservation provision relating to compensation did not appear in the 1983 Act. Thus the wording of section 29(3) represents an important innovation. However as was made clear in Stevens v General Steam Navigation Co Ltd [1903] 1 KB 890, the proper approach to the construction of statutory provisions may change if Parliament directs that the provisions are to be construed in terms of a later, modified, enactment.

[46] In the result therefore, when construing the Electricity Supply Regulations 1988 as if they had been made under section 29 of the Electricity Act 1989, Parliament's intention is in our view clear, and it is unnecessary to define a protected class: cf the approach adopted by Atkin LJ in Phillips v Britannia Hygienic Laundry Ltd (not disapproved although not followed by Neuberger J in Todd v Adams and Chope); Roe v Sheffield City Council at pages 672-3; Clerk & Lindsell, paragraph 9-14. Esto a class requires to be defined, we consider that Parliament intended to confer rights upon all members of the public within the United Kingdom: cf. section 3C(5)(a) of the Electricity Act 1989 ("For the purposes of this section an electricity safety issue is anything concerning the generation, transmission, distribution or supply of electricity which may affect the health and safety of - (a) members of the public ..."). It is notable that in two recent reported Scottish authorities, namely Alexandra Hotel (Ballater) Ltd v Scottish Hydro Electric plc 1998 SLT 669 and McLean v Scottish Power plc 2000 GWD 4-157, it was accepted without question that private rights of action were conferred in respect of breaches of the Electricity Supply Regulations 1937 and 1988 respectively.

[47] We have thus reached a view about Parliament's intention relying solely upon a proper construction of the terms of the particular statute. We are nevertheless fortified in that view by some of the specific indicators relied upon by counsel for the pursuers. First, we consider that the 1983 Act (a primary purpose of which was "eliminating or reducing the risks of personal injury, or damage to property or interference with its use"), and in particular section 16(1) thereof, empowered the Secretary of State to make regulations conferring private rights of action: cf the dicta of Lord Bridge at page 160C of R v Deputy Governor of Parkhurst Prison [1992] 1 AC 58. Section 29(3) of the 1989 Act confirmed that power by specifically providing that any criminal penalty provisions should not "affect any liability of any ... person to pay compensation in respect of any damage or injury which may have been caused by the contravention". Secondly, one of the major purposes of the 1989 Act and the 1988 Regulations is the protection of the physical safety of persons and property. The court is, for that reason, more inclined to construe the regulations as conferring private rights of action: cf Clerk & Lindsell, Torts (19^th ed) paragraph 9-24. Thirdly, the 1988 Regulations could be regarded as a mixed scheme in the sense that parts concern general administrative functions and parts contain provisions which are quite limited and specific: cf dicta of Pill LJ in Roe v Sheffield City Council [2004] QB 653, at paragraph 49. Some of those parts containing limited and specific provisions invite a construction giving rise to private rights of action. Fourthly, certain of the regulations (for example, regulations 3, 4, 7, 17, 24 and 25) are couched in language similar to that used in industrial health and safety legislation. Fifthly, the restricted nature of the remedies provided by the 1989 Act and the 1988 Regulations suggest that Parliament did not intend those to be the only remedies available: cf Smith LJ at pages 408-409 of Groves v Wimborne [1898] 1 QB 402. The availability of a common law alternative is not a decisive consideration: cf Clerk & Lindsell, op cit paragraph 9-25.

[48] In relation to the contra-indicators put forward by the defenders, we consider that only one might have had some force, namely the power of the Secretary of State to grant exemption from the regulations. The discriminating exercise of such an exempting power might result in a situation where a pursuer in one part of the United Kingdom had no stateable claim based upon a breach of the regulations against a supplier of electricity in respect of loss or damage caused by that breach, whereas another pursuer in another part of the United Kingdom had such a claim. However such force as that indicator might have had was neutralised when the Secretary of State, in compliance with section 29(1) and (2), imposed a very proper restriction on his own capacity to grant exemption, namely any exemption must be "without prejudice to the safety or interference with the supply to others": regulation 37(2) of the 1988 Regulations. We take that restriction to mean that the power of exemption cannot elide regulations protecting safety, and thus that the situation where parts of the United Kingdom would have certain statutory protection in relation to electricity, and other parts would not have such protection (tending to suggest that no private right of action was conferred), is unlikely to arise.

[49] Finally, we wish to record that counsel's arguments had developed considerably since the debate before the Lord Ordinary. Thus although counsel for the defenders made certain criticisms of parts of the Lord Ordinary's judgment in the course of their address, all that need be said is that this court, having heard parties' submissions in their present form, concur with the conclusions reached by the Lord Ordinary, albeit not necessarily adopting the same reasoning.

Decision

[50] For the reasons given above, we shall refuse the three reclaiming motions. However we note that, in each case, the Lord Ordinary repelled the defenders' first plea-in-law in its entirety, whereas at the reclaiming motion counsel for both parties submitted that (if the court were against the defenders) the defenders' first plea-in-law should simply be repelled "insofar as it extends to the pursuers' averments in Article 6 of Condescendence". We accept that the focus of both the debate and the reclaiming motion was the relevancy of the pursuers' case so far as based upon the Electricity Supply Regulations 1988, and that it would be inappropriate for the defenders' first pleas-in-law to be repelled in their entirety when allowing a proof before answer. For that reason, we shall recall the Lord Ordinary's interlocutor of 18 July 2007 and grant an interlocutor in each case reflecting the restricted extent to which the defenders' first plea-in-law is repelled. We shall then remit the case to the Outer House to proceed as accords. We reserve meantime the question of the expenses of the reclaiming motions, to enable parties to address us on that matter.