Paragraph 10 I1

The undertaker must make reasonable compensation for costs and losses which may be reasonably incurred or suffered by the drainage authority by reason of—

In sub–paragraph (1)—

• “costs” includes—

  1. (a)

     expenses and charges;

  2. (b)

     staff costs and overheads; and

  3. (c)

     legal costs; and

• “losses” includes physical damage.

The undertaker must make reasonable compensation for liabilities, claims and demands against the drainage authority arising out of or in connection with the specified works or otherwise out of the matters referred to in sub–paragraphs (1)(a) and (1)(b).

In sub–paragraph (3)—

• “claims” and “demands” include as applicable—

  1. (a)

     costs (within the meaning of sub–paragraph (2)) incurred in connection with any claim or demand; and

  2. (b)

     any interest element of sums claimed or demanded; and

• “liabilities” includes—

  1. (a)

     contractual liabilities;

  2. (b)

     tortious liabilities (including liabilities for negligence or nuisance);

  3. (c)

     liabilities to pay statutory compensation or for breach of statutory duty; and

  4. (d)

     liabilities to pay statutory penalties imposed on the basis of strict liability (but does not include liabilities to pay other statutory penalties).

The drainage authority must give to the undertaker notice of any such claim or demand.

The undertaker may at its own expense conduct all negotiations for the settlement of the same and any litigation that may arise therefrom.

The drainage authority must not compromise or settle any such claim or make any admission which might be prejudicial to the claim without the agreement of the undertaker which agreement must not be unreasonably withheld or delayed.

The drainage authority must, at all times take reasonable steps to prevent and mitigate any such claims, demands, proceedings, costs, damages, expenses or loss.

The drainage authority must, at the request of the undertaker, afford all reasonable assistance for the purpose of contesting any such claim or action and is entitled to be repaid its reasonable expenses reasonably incurred in so doing.