Council loses appeal over pier compensation
Hastings Borough Council has lost its Supreme Court appeal against the ruling that it is liable to pay compensation for business losses suffered when it closed the pier for safety reasons in 2006. However, it says it “retains the moral high ground” after judges decided on a more sympathetic interpretation of the Building Act 1984. Nick Terdre reports.
The business which suffered losses was Stylus Sports, which ran the bingo hall and an amusement arcade on the pier. When it went into liquidation in 2011, its claim was bought by Manolete Partners, which specialises in insolvency litigation. In 2012 Manolete won a ruling that it was entitled to receive compensation in the Technology and Construction Court, a judgment which was upheld by the Court of Appeal a year later.
The real villain of the piece appears to be Ravenclaw Investments, the pier owner at that time. According to the press summary of the Supreme Court judgment, a structural engineering survey performed for Stylus in 2004 concluded that urgent work was required to the structure of the pier to prevent an unacceptable risk to the public; Ravenclaw took no action but nor did the council, until a section of tension cord fell from the pier in April 2006.
The council then attempted unsuccessfully to compel Ravenclaw to take action. In June that year a structural integrity report commissioned by the council recommended immediate restrictions on access to the pier. The pier was initially closed by the council using emergency powers, backed up by a court order which it obtained the following September.
In court the council argued that it was not liable to pay compensation as Stylus had committed breaches with respect to workplace safety and its duty of care towards visitors, which constituted a ‘default’ under the terms of the act. This defence was unanimously rejected by the five law lords hearing the appeal.
The council claims to hold the moral high ground because, as it says: “The Supreme Court recognised that the Building Act as interpreted by the ‘lower’ courts was too strict, and they have effectively widened the application of what ‘in default’ means. Although this might seem a technical point, it is an important one and one which will in future help councils faced with the same dilemma.
“The judgement also recognises that the council can argue that any compensation must take into account the fact that the pier was in a poor structural condition. We will robustly challenge any large compensation claims, we do not think that the taxpayers of Hastings should have to pay significant sums of public money when all we have ever done is act in the best interests of public safety.”
According to the press summary of the judgment, compensation is only due for the period from the date of the emergency closure of the pier to the issue of the court order – some three months. The amount of compensation – Manolete describes the claim as “multi million pound” – will be decided by an arbitrator. The council will presumably also be landed with a large bill for costs.
While no fault can be found with the council’s prompt action to ensure the safety of the public, its unsuccessful pursuit of the case through all three legal instances may raise questions about the quality of the legal advice it was given.
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