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Utility companies facing more than£100m in bills from local authorities as the price of digging up the roads look ...
Utility companies facing more than £100m in bills from local authorities as the price of digging up the roads look like they may be liable after a high court ruling.

In a test case, utility company, Transco Plc, had attacked as 'absurd' a bill for £111,500 handed to it by Leicestershire CC for 'late completion' of six sets of road works.

The company argued that the works had in fact been finished within the 'reasonable period' agreed with the council and, in relation to one of the council's invoices, it disputes whether the works were ever in fact done.

But Mr Justice Gray dealt the company a costly blow when he ruled that - under the terms of the Street Works (Charges for Unreasonably Prolonged Occupation of the Highway) Regulations 2001 - the date when road works are actually finished is irrelevant.

What matters, the judge ruled, is the time when utility companies formally notify local authorities that road works are complete - and, up until then, charges for late completion can continue to be levied.

He said the regulations contained a 'deeming provision' which created an 'irrebuttable presumption' that road works had continued until a formal 'end notice' had been served on the local authority.

The regulations, he added, apply equally to remedial and non-remedial road works carried out by utility companies and others on the nation's roads.

The court's decision on vital preliminary issues in the case was anxiously awaited by local authorities up and down the country who have outstanding bills against utility companies said to total around £110m.

Charges for late completion of road works can reach up to £2,000-a-day and are causing a serious headache for utility companies.

A pilot scheme is currently being operated in Doncaster and the London Borough of Camden where utility companies are being charged 'lane rental' for road works right from the first day of the works, rega rdless of whether or not they are completed on time.

Although the ruling was a serious blow to Transco's case, it does not finally resolve the dispute between the county council and the company, who have other defences to the council's bill which they wish to put forward.

And, recognising the widespread importance of the case, Mr Justice Gray also granted Transco a reprieve by granting the company permission to appeal against his decision to the Court of Appeal.

The judge said that, in the case of all six sets of road works, Transco and the council had agreed a 'reasonable period' under the regulations in which the works should be completed.

The council accepted that, in each case, the works had in fact been finished on dates prior to Transco giving formal notification that they had been completed.

But the council argued successfully that, under the regulations, the works were 'deemed' to have continued until the date when formal notice of completion was given - and charges could therefore be levied right up to thatdate.

Mr Javan Herberg, for Transco, argued it would be 'absurd' for Transco to have to continue paying late completion charges for periods after the works had in fact been completed and the roads returned to full public service.

But the judge said that if Transco's interpretation of the regulations were to be preferred the result could be a 'very great' administrative burden on highway authorities all over the country.

He said he was 'not persuaded' that the interpretation put forward by the county council would 'create unfairness' for utility companies and others who dig up the roads.

The regulations, the judge said, created an 'irrebuttable' and 'conclusive' presumption that road works are not 'completed' until a formal completion notice is served on the local highway authority.


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