Legal

Fracking companies should fund surveys of homes near shale gas sites – call for law change

pnr 190916 Ros Wills

Suspended fracking equipment at Cuadrilla’s Preston New Road site, 16 September 2019. Photo: Ros Wills

The government is being urged to change the law to protect people whose property is damaged by fracking.

An advisory group representing more than 30 North Yorkshire communities wants shale gas companies to be required to pay for pre-commencement structural surveys on all properties that could be affected by fracking.

The firms should also be made strictly liable for all damage caused, the group said. And if companies went out of business, the government should step in as insurer.

The South Hambleton Shale Gas Advisory Group asked one of its legal specialists to investigate the current law on liability for damage. The group’s chair, Christopher Stratton, said:

“The result is of great concern and means the burden of proof rests on the householders.”

There has been no high-volume hydraulic fracturing in North Yorkshire. But operations near Blackpool, by Cuadrilla, in August 2019 caused more than 130 earth tremors. DrillOrDrop understands there have been about 100 reports of damage to property. Some householders have said the recent fracking-induced tremors caused cracks to their house walls but Cuadrilla had not accepted liability.

The South Hambleton report concluded that the current law works against people whose property has been damaged:

“Legal liability is highly complex and potentially fraught with anxiety and great expense.

“It is incumbent on government, as a matter of priority, to grasp the details of this question and deal with it by the introduction of effective legalisation.”

Christopher Stratton said:

“We think that a change in legislation is required and that the industry should be required to fund pre-drilling structural surveys of all property likely to be affected, which could be within a wide radius from the well site, depending upon the geology and extent of horizontal drilling.

“We have recently presented these findings to the local MP, Kevin Hollinrake. He recognised our concerns and has forwarded the report to the business secretary, Andrea Leadsom. Her response is awaited.”

Mr Stratton also said attempts by the industry to relax the regulation of seismic activity caused by fracking should be resisted to avoid what he described as more widespread and severe property damage.

‘Hurdles to damage claims’

According to the report, householders affected by fracking damage could face a range of problems:

  • Difficulty proving fracking caused the damage
  • Cost and stress of litigation and the time it takes to achieve judgement
  • Significant risk that a claim was thwarted by the operator becoming insolvent
  • Risk of insurance premiums rising and/or cover being excluded in fracking areas once subsidence claims start being made
  • Absence of industry or government indemnity or insurance scheme to ensure compensation is paid

The government has suggested that claims would be covered by insurance policies or that claims could be made against shale gas operators. But, the report said, ministers had not clarified how claims would be made:

“There are very significant legal and practical hurdles to overcome in relation to such actions.

“Given that fracking will undoubtedly cause disruption and some economic loss (e.g. fall in house prices) to local communities anyway, it seems very unfair that people who also suffer actual physical damage to their property, should not have a straightforward means of obtaining financial compensation.

“To achieve this will require new legislation, either to provide a new type of strict liability claim and/or to set up some alternative compensation fund.”

‘New legislation needed’

The report said the 1966 Party Wall Act, which aims to resolve disputes on neighbours’ boundaries, could be a model for carrying out surveys before fracking begins. But it acknowledged there could be significant up-front costs which might be wasted if no damage resulted. It said:

“There could instead be a presumption introduced by statute that any subsidence damage occurring in a fracking area has been caused by fracking unless the fracking operator can prove otherwise.”

The report also identified the risk to householders of fracking companies going out of business when faced with claims for damage.

Infrastructure Act

During the passage of the 2015 Infrastructure Act, ministers rejected proposals for a government-backed contingency fund. It said there should, instead, be an industry scheme that would step in and pay any liabilities. So far, there has been no announcement of any such scheme.

The report said a central indemnity fund would benefit both people whose property had been damaged and landowners who faced liability when the operator went out of business.

There were alternative legal routes, but most of these involved significant difficulties, the report identified. A case for private nuisance, for example, would have to prove that the activity was unreasonable and that the damage was foreseeable. A negligence claim could fail if the operator showed it had complied with regulatory permissions and standards.

The report also identified a future loophole on liability. The government has been considering whether to make major fracking schemes Nationally Significant Infrastructure Projects, or NSIP. Under section 158 of the 2008 Planning Act, projects authorised under the NSIP regime are deemed to have statutory authority, which provides a defence in civil or criminal proceedings for nuisance. The report said:

“This was not referenced in the government consultation paper and has not apparently been picked up in commentary but is potentially of major significance”.

The government’s response to a public consultation on the NSIP proposals, which closed in October 2018, has not yet been published.

On insurance, the report said householders could find it difficult to prove to an insurance company that damage being claimed for was caused by fracking and not by a failure to maintain the property.

It said there were concerns that a significant number of successful claims could have an impact on premiums and then the availability of cover.

Fracking operators and landowners permitting fracking may also struggle to secure adequate insurance cover because the level of possible claims was uncertain, the report added.

“This is why there have been calls for the Government to act as an ‘insurer of last resort’, which so far have been ignored.”

Link to report on the South Hambleton Shale Gas Advisory Group’s website

27 replies »

  1. Quite right, baseline studies in everything from building surveys to earthquake records, they must be made law before any work is started, otherwise its a fraudsters paradise, as we have seen with Cuadrilla.

  2. Quite right indeed but I think most home owners would simply prefer fracking didn’t take place full stop and that way the risk would then be removed. This sort of issue could also negatively impact property prices with many buyers opting for property that is not at risk of being damaged by fracking, not to mention not wanting to live near a fracking site. And how will mortgage providers and the insurance industry react? After Preese Hall and Preston New Road, I am sure that the government and industry’s approach is unacceptable to the vast majority of home owners and with such a poor a track record they will remain unconvinced about fracking.

  3. Big sympathy to the recent purchasers of those expensive new build family homes on Blackpool Road, Kirkham, financially assisted by our generous pro-fracking Government. Not only will these poor people be having worries about flooding, now they’ve got fracking induced earthquakes and possibly even more worrying, gaseous toxic fumes released during weeks of extended flow testing.
    These people were misled by salespeople claiming 2 miles distance from the Preston New Road fracking site was a safe distance. We know because we asked the salespeople!

  4. Ahh, yes. Someone doing something he enjoys with the money he earns!

    You could try some greenwashing yourself reaction, and scrap that 3 litre BMW diesel. I am sure there are other modes of transport that would enable you to achieve that profound offer to human endeavour and a record of ….?? Taking photos of ladies undies.

    Good old Nice Sir Jim. Now for the Americas Cup. If his boat is really fast, he will be able to return Greta in record time.

    Seems Sir Jim has a better idea of philanthropy than some. Maybe that is why he is Sir Jim?

    But, there is a chance to put in your order for one of Sir Jims new vehicles WITH a BMW diesel engine. Happy days.

    • Scrapping an efficient relatively clean burning 5 year old car wouldn’t be green it would just be a gesture Martian. The sort of thing you’d get taken in by though I’m sure.

      But honestly! Collywibbling about my car again – zzzzzz 😉

      I won’t say you are boring, but if Cuadrilla ever need a drill again you should apply for the vacancy.

      So Monaco Jim spends millions trying to create a public image for Ineos showing them as healthy sporty types, running , cycling and sailing. Do you not think he maybe tries a bit too hard there?

      Perhaps he should have got Eliud to make the attempt outside one of his plants, or past that flare stack at PNR that was belching out black smoke yesterday?

      Meanwhile the Sunday papers (Times , Observer) are full of articles proclaiming the death of UK fracking.

      Do you know, we may not need to be having these cosy chats in the near future Martian!

    • Martin. ” Good old nice Sir Jim.” Attempting to project the image that his business promotes wholesome health and well being when it does nothing of the sort. A true philanthropist wouldn’t need to insist his logo was emblazoned on every available surface for the TVs cameras to pick up constantly either.

      • But I expect Pauline that he believes those interested will do a bit of research and check out other chunks of philanthropy, that do not receive so much publication.

        He has been kind enough and considerate of your health and well being in providing you with a nice plastic keyboard, that you are able to do this for yourself. You may find around £30m donated towards a new centre for treatment of injured servicemen, for starters. Or, something around protecting breeding grounds for wild salmon. Maybe you would feel a wholesome glow being a small part of that?

        However, if you want to use the plastic for simply being selective and mean spirited, you will be in good company.

        Meanwhile, I will still try and see the whole of the picture. I find that more interesting. Especially in the case with INEOS as their ownership structure enables the owners to reflect themselves in their philanthropy rather than be controlled by their shareholders and PR advisers. There are a few other such bodies, often Foundations, that do the same and should not be ignored by the politicians as a lot of good could be curtailed very quickly with the wrong policies.

        And, my vote will reflect that sort of consideration more than it will UK testing of fracking, Pauline. Sorry to disappoint you on the Fylde in that respect, but I would suggest I am in a majority in that regard.

        (Have to dash. I am off to search for a plastic grommet to repair a toilet cistern. Nice Sir Jim may be sorting out some more well being!)

  5. Oh dear! Careful-you are in danger of conflicting with XR!! I think their approach is that you just have to do it, reaction-without the delayed bit.

    A “relatively clean burning (German diesel”)!! I see an oxymoron.

    Meanwhile, does Sir Jim do distant running? Yes. Does he sail? Yes. Does he cycle? Yes. Does he support football? Yes.

    So, he has the funds to support his hobbies in a slightly larger way than the rest of us. Good luck to him. He also, like many other wealthy men, does a great deal of philanthropy in other areas.

    Now, I recognise that is shocking to admit and risks the support of the anti-capitalists, but it is the reality.

    Not proclaiming the death. Think you will find it was speculating about it. I suspect it will be less a death but a bit like Sleeping Beauty where it will go into a slumber and then be revived by a handsome Prince, who finds many of the alternatives he looked upon were flawed and what had been lying dormant just needed a bit of stimulating! (That should go down well with the children.)

    • Oh Martian!

      You do know that BMW diesels are cleaner than many petrol cars don’t you? When it is time for me to change it I will be sure to come to you for your advice (if only for a laugh).

      Have a read of https://www.bbc.co.uk/news/science-environment-42666596 and give the tiresome Collywibble a bit of a rest.

      Do you REALLY believe Monaco Jim’s sponsorship of sailing, cycling and running is hobby based and isn’t about greenwashing his dirty businesses? Bless! And all that charidee – he’s almost saintly isn’t he?😂

      BTW what is “distant running”? Is it running in Monaco? That’s quite a long way away (actually and metaphorically) from most of us here in the UK isn’t it?

      It’s going to be a long sleep for Fracking in the UK Martian, more like suspended animation. The shale is going nowhere and who knows they might one day find a way to extract and burn the gas in an environmentally acceptable way. One day. Probably not in our lifetime though, and by then they will have cracked the renewables/storage issue so it will all be academic.

  6. I think we already have, delayed. It’s called hydrogen. And then we will have a smattering of alternatives to keep a few happy, but not the necessity some envisage. It will only take a bit of physics for the realisation that the carbon removed could be a valuable material and treat it as such, rather than only focusing upon disposal. Bit of further physics and engineering and we have fusion. Boris has it sorted!

    You really do need to keep up.

    Oh, and taking your post from VW literature and just changing to BMW will not convince too many, including those responsible for setting pollution taxation! Bless.

    No, it is running in places like Namibia. All pretty available information to those who are interested and wondered why Sir Jim became interested in building a specialist vehicle. The clue was in the distant, but interesting you failed to pick up on that in your rush to show the benefits of that A level! (Strange dichotomy there between the pride in the education achievement, and the regular utilisation of Emojis in place of using it! More appeal to the younger audience?)

    Did you miss the week they did the “Rs” during English A level? (Photography class instead??) Research and reality seem to be a bit of kryptonite. Maybe you compensated with your Super Hero title? Ahh, I see the necessity now for the mode of transport!

    BMW-Bat Mobile Wagon!

    • “Oh, and taking your post from VW literature and just changing to BMW will not convince too many, including those responsible for setting pollution taxation! Bless.”

      Check out the BMW website poppet! Bless! You really are poor at this Google thang aintcha!

      So CCS – come on show us where it is is working at scale. Namibia? No. Where then? Monaco? I doubt it. Grangemouth? No! PNR? No just lots of smoke. Where then Martian?

      Did you miss the week they did the Rs in biology? You could have learned a lot about your output!

      BTW the idea that Boris has anything sorted is a bit of a give-away as to your lack of critical thinking. Fancy a pole dance anyone? Tech lessons? Have you tried to sign up Martian?

  7. Nope, old thing, I know my limitations! I avoid Dad dancing as well as Emojis, so I don’t cause embarrassment to the kids.

    Ahh, the BMW website! You mean THEIR PR! Nope, not that gullible, after paying a few £ks to return a faulty BMW that was “normal” according to them!! The curse of the variable damper system, not that apparent on Giggle but well known to mechanics and those who end up at the physio each month-literally. Interesting that Giggle is suggested as superior to experience and reality. Some enlightened Universities are now returning projects for repeat that follow that! Big Green Jack would be distraught.

    Must go and hear Boris via the Queen’s Speech. Should be “polemic”!

    • Martian, you can swear reality is unreal as long as you like but you are becoming very tedious.

      I’m sorry to hear you were so badly shaken but maybe that explains your obsession with BMW? hmm.

      Are you a Brexiteer Martian? With your grasp of reality I bet you are 😉

      • No obsession with BMW, reaction. I found out from experience that there were problems, I coughed up and got rid and moved on. Quite simple to do. Try it.

        (I then took a little gamble, made a return and tried a Hybrid via the proceeds. Got rid of that-without cost-when I found the problems from experience.)

        Interesting that an individual who is not an anti can still be a responsible sort of chap. Nah- surely not! That would be difficult to relate an Emoji to, so impossible.

        What is a Brexiteer?? You do like to apply labels. Reality is more than labels.

        Oh, by the way, we did Human Biology. My Rs have all worked well since-the dynasty will persist! Happy days.

        • You DO seem to make some bad choices in your life Martian.

          So you don’t know what a Brexiteer is? OK.

          As a communication device your Rs would appear to be functioning particularly well.

          • There are over 17m “brexiteers” old fruit, when last counted. Perhaps if you started now, and kept going for the next century, you could define each and every one of them!

            Or, could it be another of your “realities” that they are all the same?

            Yep-much easier to create one label, but not reality. I know a number of “brexiteers” and they are all individuals.

            But then super heroes always make the right choices and can make 17m plus equal one!

            (They are FICTIONAL, old fruit.)

            • Martian – you seem to be the one obsessing over BMWs and superheroes?

              Are you SURE they are all still Brexiteers? Ooh look you lumped all 17m together with one label though 😂

              Are you a Brexiteer then Martian? You seem strangely reticent about this.

              It’s really not like you not to share your opinions on every subject under the sun old thing.

              • My vote, is my vote, old fruit. Not an opinion, a vote. How I apply that is my business.

                You carry on voting for polluting the lungs of children, whilst claiming environmental credentials. There are plenty of parties who accept that sort of approach. Add in the Shiraz with pork and it may diminish the selection a bit, but not much. Photographing ladies undies would still not be too limiting. Ignoring what is a true majority (up to now), starts pointing somewhere. Then supporting false advertising claims. Ermm?

                Put all five together and there is probably a place within the Lib. Undems! Good luck with the sandals around the Fylde in winter.

                Nice Queens Speech though. What else were they going to do on a rainy day in Westminster?

                Meanwhile, over the pond the Democrats are continuing mass suicide! Not happy with the top two out of the running, number three jumps over the cliff. I didn’t know there were so many lemmings left! Looks as if that vote is already decided.

                • Sounds to me, old chap, you just like to attempt to dismiss people via labels that you apply.

                  Come on, don’t be so lazy. You enjoy being considered as an individual (can’t be too many more!), treat others with the same respect. Takes a little more effort, but surely that is not beyond your English A level plus a large smattering of Emojis?

                  However, I did enjoy your speculation game regarding politics. Almost as enjoyable as the one you operate regarding UK fracking! It could become addictive, but I think I will now return to my philosophy of reminding those who wish to be reminded about reality.

                  The distraction technique has been fun to follow on a rainy day, but time for Eddy Stone to return. The fog is never far away.

  8. Sir Jim the great philanthropist? Millions to spend on sponsoring sport, buying a football club but no money to upgrade a plant In the NE of England to meet legal air pollution limits. A failure to upgrade that means around 200 people will lose their jobs. The same Sir Jim that asked the government to turn a blind eye to the illegal air pollution to save 200 jobs so would have been happy to operate unlawfully and with no concern about the workers, local community or the environment that would all be exposed to illegal levels of air pollution. Sir Jim now living in Monaco to avoid tax, accountants having to consider resigning because his proposals to reduce his tax bill are so aggressive. Saving him and fellow directors tax rumoured to be around £4billion, tax that would benefit hard pressed public services. That is not philanthropy.

    https://www.thetimes.co.uk/article/sir-jim-ratcliffes-plan-to-avoid-billions-in-tax-rocks-auditor-pwc-zjbvm7ktt

    https://www.dailymail.co.uk/news/article-6715343/MPs-lead-fury-UKs-richest-man-Sir-Jim-Ratcliffe-heads-Monaco-avoid-4bn-tax.html

  9. Well KatT, perhaps do a little research and you would have saved the time posting a load of twaddle.

    I will give you two little starters: (In the public domain)

    Sir Jim does not live in Monaco. He may do in the future, he may not. He has recently bought land over looking IOW to build a new property, and has other properties around the world, so where he “lives” is somewhat fluid. He has yet to make a profit in the UK, but makes a good profit in USA/Belgium and Germany, so maybe his taxation would be better allocated to benefit their public services? Not quite as simple as some media would present to the gullible. His head office is currently in UK.

    A very large amount of money has been invested in Seal Sands. The problem is that it requires a great deal more, and it is questioned as to whether that is justified. As he has stated clearly, the problem with acquiring assets that have not been well maintained, means there may come a point that doing work playing catch up can not be justified. He had to do so regarding the Forties Pipeline, and Grangemouth, but it does not mean it can always be justified.

    It really is not that difficult to find out the full picture. It is sometimes not what some want to do, and if you chose to be blinkered that is your choice, but I’m not sure it does you any favours where there may be some who do so.

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