18.1.1 In some circumstances, the Authority may wish to take action itself in relation to the Service. Such circumstances include: where there is a need to prevent or mitigate a serious risk to health, safety (person or property) or the environment; where it is necessary to discharge a statutory duty; or where there is an emergency (an event threatening death, injury, damage, contamination or serious disruption to persons, property or the environment) which requires the assistance of the Authority and/or the emergency services. The right of the Authority to take action may arise due to matters outside the scope of the work of the Contractor or may arise due to the Contractor being in breach of certain of its obligations under the Contract.
18.1.2 The Authority's right is often referred to as "step-in" (and this is the terminology used here for that reason), as it involves the Authority taking over some or all of the obligations of the Contractor for a period. It should, however, be viewed as being entirely different in nature and purpose from a step- in by Senior Lenders under a direct agreement (see Section 26 (Funders' Direct Agreement)) and separate from the Contractor Default provisions (see Section 23.2 (Termination on Contractor Default)). Essentially, the focus of the right is to address a serious short term problem that can or must be solved quickly, where the Authority is in a better position to do this than the Contractor. The Authority should not in any situation be obliged to step-in.
18.1.3 Where the Contractor is not in breach then the Authority should exercise its step-in in accordance with good industry practice and it should indemnify the Contractor for its direct losses).
18.1.4 The Authority should not be particularly concerned about such an indemnity being required as the price for a right of step-in. This is because to the extent the Contractor is not in breach the Authority should honour the contractual structure and risk allocation in the Contract. If the Contractor is in breach, then the termination provisions should ordinarily be sufficient to protect the Authority (with no indemnity) without any additional involvement of the Authority through step-in.