On 2 July 2024, the Supreme Court handed down Judgment in Manchester Ship Canal Company Ltd v United Utilities Water Ltd [2024] UKSC 22. In this landmark decision, the Supreme Court held that water companies can be pursued by private companies and individuals for dumping untreated water into lakes and rivers. The Judgment is the culmination of a six-year legal battle between the parties.
Background
The Claimant (“Canal Company”) is the owner of the Manchester Ship Canal. In 2018, Canal Company threatened to issue proceedings against the Defendant (“United Utilities”) for trespass and nuisance following repeated sewage spills into the waterway. In response, United Utilities issued proceedings for a declaration that the Canal Company had no such cause of action available to it. The Court was not asked to evaluate the merits of the Canal Company’s potential claim but was instead required to consider whether the claim was barred on the basis that it was inconsistent with the statutory mechanism for enforcement against sewerage operators contained within the Water Industry Act 1991 (the “1991 Act”). United Utilities argued that, in such circumstances (and absent negligent or deliberate wrongdoing), the 1991 Act only permitted regulators to take action against water companies.
In 2018, Mr Justice Fancourt found in favour of United Utilities’ request for declaratory relief and, in 2022, this finding was upheld by the Court of Appeal. As a consequence, watercourse owners were effectively debarred from issuing claims for nuisance and/or trespass against sewerage companies for discharging pollution into the water, unless there was negligent or deliberate wrongdoing. This remained the case even if the pollution was frequent and significantly damaged the owner’s commercial interests, or its ability to enjoy its property. Canal Company appealed.
The Appeal
The Supreme Court unanimously granted the appeal, finding that the 1991 Act does not debar private bodies from bringing nuisance or trespass claims against polluting sewerage companies, even in the absence of negligent or deliberate misconduct. In doing so, it noted that:
1.The starting point was that watercourse owners have a right, protected by common law, to preserve the quality of the water. The discharge of pollution is an actionable nuisance if it interferes with the owner’s use or enjoyment of its property. The Supreme Court was therefore required to determine whether the 1991 Act excludes this common law right (paras [108]-[110]).
2. A body operating under statutory authority, such as a sewerage undertaker, is liable for nuisance, trespass, or other torts unless: (a) it is acting within its statutory powers; or (b) it has statutory immunity. In the event the actions of the sewerage undertaker interfere with the rights of another, it must be established interference has been authorised by Parliament. If the interference has not been authorised by Parliament, it is not lawful.
3. A statute will only be taken to authorise what would otherwise be classed an unlawful interference if it contains express language to this effect, or if this is a “necessary implication” of the language used by Parliament [123]. Further, it could not be interpreted that Parliament had intended the statutory power be exercised in a way that interferes with private rights, unless such interference was an inevitable consequence of the legislation in question [15]-[21].
4. Sewerage undertakers do not have a statutory authority to discharge untreated sewage into waterways. Further, the discharges could not be regarded as having been authorised by Parliament, as they were not an inevitable consequence of the undertaker’s performance of its duties. In the present case, United Utilities could have prevented the discharges by investing in improved infrastructure and treatment methods [113].
5. Given that Parliament had not authorised United Utilities’ interference with Canal Company’s rights (as set out at point 1 above), Canal Company was entitled to enforce those rights at common law.
The Supreme Court distinguished the case from Marcic v Thames Water Utilities Ltd [2003] UKHL 66, in which a private owner’s claim in nuisance against Thames Water for failing to build more sewers to prevent repeated foul water discharges onto his property was dismissed. In Marcic, The House of Lords held that (i) Thames Water’s duty to provide effective drainage pursuant to the 1991 Act was not absolute; and (ii) the appropriate means to enforce this was through the regulator, Ofwat, not private litigation. In that case, Thames Water had not created the nuisance; rather, it was alleged to have failed to take reasonable steps in mitigation, by building a new sewer. The duty to build a new sewer is governed by Section 94(1) of the 1991 Act and is enforceable only by the Secretary of State or Ofwat. In contrast, Canal Company’s claim was grounded not in any alleged breach of Section 94(1), but rather in common law causes of action in nuisance and trespass [82]-[90], [135]-[136].
Comment
While this case is originally a commercial dispute between two private companies, the ruling has far-reaching implications. Any group with access rights to the waterways, such as angling clubs, swimming associations, farmers and landowners, can now issue claims against water companies, after having been prevented from doing so for many years. Further, even members of the public who become unwell as a result of contaminated water may be able to pursue a claim.
For many, this landmark Supreme Court Judgment will be viewed as significant progress towards addressing the accountability gap in the water industry and a pivotal shift towards stronger environmental protection.