THE council could face a hefty compensation bill running into hundreds of thousands of pounds over its decision to close Hastings Pier.
The authority has lost a High Court fight against liability to pay costs to businesses which missed out on trade after a large part of the Victorian attraction was shut in June 2006.
It may now have to pay compensation under the 1984 Building Act for preventing public access to the pier between June 16 and September 12 that year.
The sum, understood to be at least six figures, would be paid out of the Hatings Borough Council’s reserves.
It faces a claim from Manolete Partners plc, which acquired the right to sue from Stylus Sports Ltd, former tenant and operator of the bingo hall and amusement arcade. Stylus went into liquidation last year.
The council relied on three defences to the claim but these were rejected by the judge, who said Manolete was entitled to compensation for a period of around three months.
At the High Court hearing Mr Justice Ramsey said concerns about the pier’s structural integrity were first expressed in 2004.
In 2006 pieces of metal were found to have fallen from its underside. An inspection found at least five trusses had failed and it was unsafe to allow large numbers of people on to the pier.
Hastings Borough Council decided it had no option but to shut a large section of the pier, despite three major events booked to take place in the ballroom in July and August that year.
It secured a court order from Hastings magistrates on September 12, 2006 forcing Panamanian pier owners Ravenclaw Investments to prohibit public access to the pier and do repair work within 32 weeks which it did not carry out.
Stylus and the council then decided to take matters into their own hands and paid around £300,000 - the majority share from Stylus - to do the much-needed structural work themselves.
In July 2007 the pier’s bingo hall and bar were reopened after Stylus was given the go-ahead by magistrates.
Stylus launched a claim for compensation under the 1984 Act for the period between the initial closure and the September 2006 court order. This claim was later assigned to Manolete by Stylus’ liquidators.
The council denied liability for the period, saying it applied for the order on June 16, 2006, and any delays were caused by the court, not by itself.
It claimed that its actions in banning public access to dangerous premises did not give rise to an actionable claim against it, as a result of the duty of care it owed to the public.
The council alleged Stylus had itself been ‘in default’ and in breach of the Occupiers Liability Act 1957 because it took a lease of the pier past the end if its design life and was aware by 2004 that there were serious problems with the pier’s structure, but took no adequate steps to ensure its repair.
However, rejecting those defences, the judge said Stylus had a ‘good cause of action’ against the council.
He said that it was Ravenclaw which owned and had an obligation to repair the pier and ‘remove the danger’, not Stylus as tenant.
Councillor Jeremy Birch, council leader, said Friday’s court ruling was ‘disappointing’, saying the authority acted in the interest of public safety.
He said: “Any compensation would have to come out of the council’s reserves, which belong to the people of Hastings.” The council has reserves of about £3.5 millions.
Kevin Boorman, council spokesman, said: “The court case does relate to the decision by us to close the pier. We did this on independent advice saying it could be dangerous to keep the pier open to the public because of the condition it was in.
“This court case relates only to whether those with an interest in the pier are entitled to compensation for that action.
“We are considering all options as a result of the outcome and therefore it would not be appropriate for us to comment further at this stage.”
Hastings Pier has had mixed fortunes in the last six years.
In March 2008 it had to close again to the public after storms caused considerable damage.
Hastings Pier and White Rock Trust (HPWRT), now the Hastings Pier Charity, was then set up to raise funds through various means to renovate the pier. In August 2009, the Observer launched its Save the Pier campaign, which more than 3,000 people signed a online petition.
In October that year almost 2,000 people marched to the town hall demanding the council take action to save the pier by invoking a Compulsory Purchase Order (CPO), effectively forcing Ravenclaw to sell up.
The pier suffered its worst fortune when it was almost destroyed in a fire in the early hours of October 5, 2010.
Luckily it has seen a reversal in fortunes since last year.
In September the Government confirmed that a CPO of the pier from Ravenclaw could go ahead giving the council and HPWRT the green light to go ahead with its purchase.
More than £12.1 million of the £13.9 million needed to rebuild the pier has now been secured.
If the project stays on schedule, the pier should be open to the public around December next year.