Disputes on statutory transfer schemes

Courts are currently considering the effect of a statutory transfer scheme on the rights enjoyed by the old public utilities.

20 June 2013

The privatisation of national utilities (particularly in the 80s and 90s) led to changes in ownership of assets and the exercise of rights of a potentially public nature by private entities. The full implications of those changes are still being felt as valuable access rights are periodically disputed. One such example is the rights of water companies to discharge sewerage onto private land from new or existing pipework.  

The courts are currently considering the effect of a statutory transfer scheme on the rights enjoyed by the old public utilities, on which they relied when building their pipes and drainage networks.

In Manchester Ship Canal Co Ltd v United Utilities Water Plc [2013] EWCA Civ 40, the Court of Appeal decided, with some apparent reluctance, that it was bound by previous caselaw to find both that statutory rights granted to public sewerage operators to discharge onto private land did not transfer to their private successors and that, even if they did, such rights could not in any event be immune from subsequent changes of legislation (despite the pipes being built in accordance with the previous legislation).

This case potentially has a wider relevance to all successors of former public entities who rely upon statutory transfers of assets to them, including for example in the gas, electricity and transport industries. However wide the terms of the transfer scheme there may still be scope for debate about whether specific statutory rights formerly exercised by the public entity have been transferred to the new operator in connection with its business. 

It is likely that the Supreme Court will be asked to consider a further appeal in this matter.

Chris Jackson and Lloyd Nail work on disputes affecting the public and private sector within our Commercial Disputes team and are part of our specialist Rail Disputes group.

Key contact

Chris Jackson

Chris Jackson Partner

  • Head of Infrastructure
  • Procurement and State Aid
  • Transport

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