Authority and other works necessitating diversion, removal or protection of utility apparatus have long been a feature of the utility sector, along with the questions of who does what and who is to pay for it.
For purposes of this article, the phrase “diversionary works” includes protective works to apparatus and removal of apparatus and not just diversionary works as they might generally be understood in the context of the New Roads and Street Works Act 1991 (“NRSWA”).
With HS2 Phase One now starting to cut a swathe across England and HS2 Phases 2A and 2B likely to do the same in time, the issue of diversionary works is likely to be a factor impacting on many statutory undertakers. Some of those undertakers may not previously have had infrastructure projects of such scale impacting upon their apparatus. Those undertakers who have been involved with HS2 or had other major infrastructure projects impact on their apparatus may be all too familiar with the potential complexities of this area. Whilst small scale diversions of apparatus within the public highway can be relatively straightforward, when multiple items of apparatus both in the public highway and private land need to be diverted, potentially over a large area, the complexities can significantly increase.
One common misapprehension with diversionary works is that NRSWA cost sharing discount applies across the board. Whilst such a discount might sometimes apply, it will not always apply. Understanding which piece of legislation may provide the grounds for diversion of which items of apparatus is key to understanding the basis of diversionary works and the costs recovery that may apply. A variety of different legislation may trigger diversionary works and includes:
- The New Roads and Street Works Act;
- The High Speed Rail Act 2017;
- Development Consent Orders under the Planning Act 2008;
- The Water Resources Act;
- Orders under the Transport and Works Act 1992; and
- Certain utility enabling legislation.
Legislation other than those listed above may also contain relevant provisions so the above list is not exhaustive.
An important point to note is that different parts of what might be considered the overall diversionary works project may be subject to different enabling legislation, particularly where the apparatus concerned is located within private land and the public highway over a large area. This can give rise to situations in which different parts of the overall diversionary works project may be subject to different cost recovery schemes. By way of example, one section of the diversionary works might be subject to NRSWA diversionary works whilst another is subject to another legislative basis. Diversionary works required by HS2 are a situation in which this possible hybrid cost recovery basis might arise. Such hybrids can also arise elsewhere.
Another critical factor is to ensure that any costs recovery is determined on the correct basis. By way of practical example, if one proceeded on the basis of NRSWA cost sharing applying across an entire diversionary works project, an undertaker might bear 18% of the costs associated with their diversionary works. If, however NRSWA only correctly applied to a small fraction of the overall diversionary works, the undertaker might only have been obliged to apply NRSWA cost sharing to only that part and could have made a full recovery of all its reasonable costs for the other aspects of the project. It is even possible within hybrid schemes that different parties might be liable to contribute towards the costs of different aspects of the overall diversionary works.
In any sizeable diversionary works project, incorrectly applying NRSWA cost sharing could unnecessarily cost the statutory undertaker significant sums of money. Even within diversionary works subject to NRSWA, it is not the case that cost sharing applies in all situations. There are some circumstances where works might be required under NRSWA to an undertaker’s apparatus where no cost sharing would be required and an undertaker would be entitled to full recovery of its associated costs.
Another situation in which problems can arise is where a statutory undertaker discovers works have been undertaken by an authority in the vicinity of it apparatus without any prior consultation having been engaged in. In some circumstances this may not be an issue. However, in others the undertaker may identify that diversionary works will have to be undertaken in consequence of those authority works. This may give rise to claims against the authority who failed to undertake advance consultation for the costs of the diversionary works subsequently required.
There are a number of other factors to be considered with any diversionary works that we will not address here. We may address the issues of betterment and deferment of time for renewal allowances that may accompany diversionary works in a subsequent article.
The importance of ensuring that any diversionary works project is carefully analysed to ensure that the correct parties are identified (and appropriate agreements entered) at the outset cannot be overstated. Without careful analysis, one could potentially prejudice the prospects of successful costs recovery.
- Advise statutory undertakers in respect of diversionary works projects;
- Recently concluded on favourable terms for a client a multimillion pound arbitration where the claim arose from significant and large scale diversionary works; and
- Are advising various clients in respect of ongoing claims arising from diversionary works.
If you want to know more about our work in this area and whether we maybe able to assist you contact us.