Landmark decision on rights of action for water pollution claims
Having heard the appeal in March 2023, the Supreme Court handed down its judgment on 2 July 2024, some 16 months later, marking an end to the long-standing litigation of The Manchester Ship Canal Company Ltd v United Utilities Water Ltd No 2 [2024] UKSC 22. Crucially, the Supreme Court were not called upon to decide on the merits of a particular dispute between the parties, but rather to determine whether the claim in question would be barred by virtue of its inconsistency with the Water Industry Act 1991 (“the 1991 Act”).
The history of the litigation
Dating back to 2010, The Manchester Ship Canal Company Ltd (the “MSCC”), being the owner of the beds and banks of the canal in question, sought to sue United Utilities Water Ltd (“United Utilities”), the statutory sewerage undertaker in the Northwest of England. The claim related to pollution caused by discharges of foul water into the canal, which occurred when the hydraulic capacity of United Utilities’ system was operating at excess. United Utilities, however, alleged that the MSCC had no basis to bring such a claim of nuisance and trespass against it, given that it was contrary to the 1991 Act which provides a regulated framework for the privatised sector.
The High Court and Court of Appeal agreed with United Utilities, implying that the 1991 Act prohibited an owner of such a watercourse from bringing a claim in nuisance or trespass for polluting discharges where there was no fault on the part of the sewerage undertaker. Instead, responsibility to resolve these issues would fall to the regulator, the Water Services Regulation Authority (“Ofwat”), and not the Judiciary.
The Supreme Court ruling
Dissatisfied with the judgments to date, the MSCC appealed to the Supreme Court whose ruling, handed down by Lord Reed and Lord Hodge with whom the other Lord Justices agreed, was unanimous in allowing the MSCC’s appeal. It held that the MSCC are not statute-barred from bringing a nuisance or trespass claim against United Utilities for the pollution caused by discharges of foul water, even where no negligence or deliberate misconduct has taken place.
The Lord Justices emphasised that “the owner of a watercourse…has a right of property in the watercourse, including a right to preserve the quality of the water.” Such a right being vested in common law rather than statute, meant that the question put to the Supreme Court turned on statutory interpretation first and foremost. Considering the operation of the provisions under the 1991 Act, the Supreme Court concluded that the rights of action of nuisance and trespass which exist at common law are not expressly ousted by the 1991 Act, and therefore private individuals or companies affected by polluted watercourses do have legal recourse available to them.
United Utilities sought to rely upon a previous decision of the House of Lords in their argument, that of Marcic v Thames Water Utilities Limited [2003] UKHL 66 which had concluded that the Secretary of State and Ofwat were the appropriate entities to impose requirements for implementation of new sewerage infrastructure. The Supreme Court, however, felt able to distinguish the facts of Marcic from the question being put to them – Marcic concerned the enforcement of duties under the 1991 Act, something which the Judiciary could not administer, whereas the current situation queried the existence of a common law right of action – a matter for which the Judiciary are wholly appropriate to rule on. The Lord Justices commented that “Discharges of foul water from the outfalls could be avoided if United Utilities invested in improved infrastructure and treatment processes.”
What does this decision mean for water companies?
The Supreme Court itself acknowledged the far-reaching importance of this judgment, by allowing the Environmental Law Foundation, a charity offering free legal support in environmental matters, supported by the Good Law Project, to make submissions to the Court as a third-party intervention. The Supreme Court has ultimately found that private law claims for nuisance and trespass at common law do not contravene the 1991 Act, and importantly, it has confirmed that this is the position even in the absence of any “negligence or deliberate misconduct” on the part of the sewerage undertaker.
As noted at the beginning of this article, the Supreme Court’s ruling is not a decision on the merits of a dispute between two parties, but rather a ruling on the rights of action for water pollution claims. As such, this decision has the potential to result in an influx of water pollution claims against offending water companies, should the individuals or companies impacted decide to take legal action.
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