A rumble of litigation is expected, but finding the evidence to back up claims may be harder than finding shale gas
The UK Government’s recent lifting of its moratorium on hydraulic fracturing, or ‘fracking’, is seen by many as the first step in the development of the shale gas industry on this side of the Atlantic. The controversial technique of injecting large volumes of (primarily) water at high pressure to stimulate shale rock and release trapped gas has already spawned litigation in the US.
Whether these shores will host a similar number of fracking-related disputes remains to be seen, but inevitably the growth of an onshore gas industry in the UK will be accompanied by some disputes.
The US shale gas revolution has resulted in disputes between developers and operators, well site property owners, aggrieved neighbours, local communities and environmental activists. In addition to the usual contractual disputes between oil and gas industry participants (many of which are resolved by arbitration) disputes in the US have included: personal injury actions relating to the migration or seepage of chemicals into groundwater; nuisance caused by the operation of a shale gas well drilling site due to pollution or Rylands v Fletcher-type disputes where fluids have escaped onto neighbouring properties; damage caused by well blowouts or large vehicles transporting drilling equipment and water to and from well sites; and, in at least one case, a class action alleging that earthquakes set off by fracking resulted in damage and raised property insurance premiums. Claimants have generally sought injunctive relief or monetary compensation.
While it is certainly true that the more litigious culture in the US has fuelled some of this litigation, there is no reason to suppose that a good number of these disputes will not be repeated in the UK, particularly given that the UK’s higher population density could result in large numbers of people being affected at a given site, intensifying opposition in communities where shale gas is found. In addition, certain headline-grabbing issues such as fracking’s potential to cause earthquakes (as happened near Blackpool and resulted in the moratorium), have gained a popular notoriety out of proportion to their significance. This in itself may encourage people to litigate, notwithstanding that any earthquakes are likely to be relatively minor – in Blackpool they reached around 2 on the Richter scale, roughly equivalent to the shaking caused by a heavy truck (perhaps carrying a drilling rig?) driving close to a house – and that similarly-sized seismic events already occur reasonably often in parts of the UK.
The major challenges in most claims will be causation and remoteness, as there will be real complications in proving that events that have taken place underground have had the impact and consequences complained of. Of course, that is nothing new in litigation and it will certainly not put off many claimants from trying.
Hogan Lovells senior associate Michael Darowski assisted with this article