In R National Grid Gas plc v Environment Agency, 2007 UKHL 30, (27 June 2007) the House of Lords has reversed the original decision and held that the privatised utility company (and its shareholders) did not inherit any liability for the clean up costs associated with the polluting activities of its predecessor businesses. Robert Sutherland, Advocate, discusses the potentially significant implications for local authorities who might be faced with these liabilities where no other person can be fixed with a statutory liability for these costs.