Transco Plc v Stockport Metropolitan Borough Council [2003]

Transco Plc v Stockport Metropolitan Borough Council [2003] UKHL 61 is a leading House of Lords decision that revisited the rule established in Rylands v Fletcher, a principle of strict liability in tort. The case reaffirmed the existence of the rule in English law but clarified its limited and carefully defined scope.

In this case, Transco Plc, a commercial gas supplier, brought an action against the local authority after it suffered damage to its gas pipeline infrastructure. The cause of the damage was a burst water pipe owned by the council, which leaked and caused the land beneath Transco’s pipe to erode. As a result of this erosion, the gas company incurred substantial costs amounting to over £93,000 for repairs. Transco argued that the council should be held strictly liable under the rule in Rylands v Fletcher because it had allowed the escape of water that caused damage to its property.

The House of Lords rejected the claim, holding that the local authority was not liable under the Rylands rule. The key reasoning was that water carried through an ordinary pipe within a domestic or municipal setting is not something exceptionally dangerous or unnatural. The Lords concluded that the escape of water from an ordinary water pipe did not meet the threshold required to impose strict liability under Rylands v Fletcher. They observed that the presence and use of water in this context was neither unusual nor extraordinary in the modern world.

Lord Hoffmann, in particular, offered a notable observation about the peculiarities of statutory liability. He pointed out the irony that if the leaking pipe had belonged to a statutory water undertaker, then Section 209 of the Water Industry Act 1991 would have imposed strict liability, unless the damage was suffered by a company regulated under the Gas Act 1986, such as Transco itself. This ironic legal quirk highlighted the inconsistencies that can arise when tort rules intersect with sector-specific statutory regimes.

The judgment also served as a reaffirmation and clarification of the Rylands v Fletcher principle. The House of Lords did not abolish the rule but emphasised that its application must be limited to situations involving the escape of something that is inherently dangerous and not commonly brought onto land. Their Lordships were mindful of the need to balance legal tradition with contemporary legal reasoning. They expressly rejected the Australian High Court’s approach in Burnie Port Authority v General Jones Pty (1994), which had abolished the Rylands doctrine in favour of general principles of negligence. Instead, the Lords opted to preserve the doctrine within a narrow and well-defined framework.

The judgment thus aimed to clarify the doctrine's application by insisting on its essential nature that strict liability should be reserved for truly exceptional risks that arise from non-natural uses of land. Their goal was to retain the usefulness of the rule while preventing it from becoming an overreaching source of liability in ordinary or domestic circumstances.