Supreme Court decisions open new litigation avenues for environmental claims
In the last few weeks, the UK Supreme Court (UKSC) has delivered two very significant judgments that will shape environmental litigation in the coming years.
In Finch, a 3-2 majority of the UKSC found that the Environmental Impact Assessment for a proposed oil project had to take account of the emissions that will inevitably occur when the oil produced is burnt (also known as 'downstream' or 'scope 3 emissions'). The Court emphasised that it was important that the public could meaningfully decide on such projects on the basis of complete information – as per Lord Leggatt: “You can only care about what you know about” (§21). This will highlight the full impact of such projects and is bound to influence litigation on other proposed oil development projects in the UK, such as the Rosebank project.
In Manchester Ship Canal, the Court clarified that a victim of a nuisance of trespass by reason of discharge of untreated sewage into a waterway retains their common law right to bring a claim against the responsible water company. It clarified that a body which exercises statutory powers, such as a sewerage undertaker/water company, is liable in the same way as any other person if it is responsible for a nuisance, trespass or other tort, unless either it: (i) is acting within its statutory powers, or (ii) has been granted some statutory immunity from suit. This establishes a route to redress for victims of the crisis of untreated sewage being discharged into waterways in the UK and will likely lead to a significant amount of litigation. The main points from this decision are considered in some more detail below.
The issues and arguments
United Utilities (UU) is the statutory sewerage undertaker for the North West of England. When its network's hydraulic capacity is reached, untreated sewage has frequently been discharged into the Manchester Ship Canal (which runs from Manchester to the Mersey Estuary), polluting the canal, which is privately owned by Manchester Shipping Canal Company (MSCC).
MSCC threatened to bring a claim against UU in nuisance and trespass. UU asked the court to make a declaration that MSCC had no right to bring these private law claims against it, because they were inconsistent with and therefore barred by the legislative scheme established by the Water Industries Act 1991 (the 1991 Act).
The claim turned on whether there was a cause of action at all, i.e. whether the 1991 Act excluded the common law rights of action in nuisance and trespass. The Court was not asked to decide the merits of the case. It was not part of MSCC's case that UU had acted negligently or engaged in deliberate wrongdoing, but they argued that the pollution could have been avoided by better infrastructure.
The decision
The Court unanimously held that the 1991 Act does not prevent the MSCC from bringing a claim in nuisance or trespass when the canal is polluted by discharges of foul water from United Utilities’ outfalls, even if there has been no negligence or deliberate misconduct.
The Judges were clear in their analysis: the owner of a watercourse has a right of property in the watercourse, including a right to preserve the quality of the water. That right is protected by the common law of tort (§108). There is no doubt that the discharge of polluting effluent from sewers, sewage treatment works and associated works into a privately-owned watercourse is an actionable nuisance at common law, if the pollution is such as to interfere with the use or enjoyment of the relevant property (§109). The 1991 Act does not authorise sewerage undertakers to cause a nuisance or to trespass by discharging untreated effluent into watercourses (§111) and the Court accepted that in this case, the discharge of polluting effluent could be avoided by means of investment in improved infrastructure and better treatment processes (§113). After careful analysis of various sections of the Act (esp. ss.117(5), 186(3), 180 and 18), the Court concluded that the 1991 Act did not exclude the common law rights of action in nuisance and trespass.
The Judgment also sets important precedent on statutory interpretation where a question arises on whether a statutory regime excludes parallel/overlapping rights at common law and confirms that there is a strong presumption against the removal of such private rights and that clear and specific words will be needed to do so (§123).
Comment
The sewage pollution crisis has received much attention this year, with over 80% of the UK public being in favour of an independent inquiry into this crisis, according to a recent poll . The scale of the problem is staggering: according to the Environment Agency, there were approximately 3.6 million hours of sewage spill in 2023. A result of this crisis, which has developed over many years, is that not a single river in England is rated 'healthy' by The Rivers Trust.
Furthermore, the looming insolvency of Thames Water has cast a spotlight on the potential structural issues with privatising a vital natural monopoly such as the water system and transforming it into a profit-driven entity. The Court acknowledged that sewerage authorities face practical problems and have done so in the past and that "the privatisation of the provision of sewerage services may have increased those practical difficulties because of the way in which the funding of capital expenditure in five-year programmes is agreed between the sewerage undertaker and Ofwat." (§127)
This decision by the Supreme Court opens routes for many claims against polluting providers of sewerage systems. Crucially, negligence and/or deliberate wrongdoing are not needed for such a claim. This could include a diverse set of claims, such as, for example, claims for damage to property suffered through pollution (e.g. river infrastructure), business losses or interruptions (e.g. in the fishing and tourism industry), personal injury claims (e.g. through illness after coming into contact with polluted water), and perhaps even loss of enjoyment/amenity claims by people who purchased an event/property/boat with that goal in mind. As a pollution event may affect many possible claimants in the same way, this may also be fertile litigation ground for group actions.