Burges Salmon. The Legal 500 & The In-House Lawyer. Legal Briefing Projects, energy and natural resources. The Legal 500

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1 Burges Salmon The Legal 500 & The In-House Lawyer Legal Briefing Projects, energy and natural resources The Legal 500 Michael Barlow, partner Simon Tilling, associate What a nuisance! Key environmental cases from the past year The law of nuisance was first developed by the courts of England and Wales hundreds of years ago, long before the industrial revolution, at a time when England was predominantly a rural society. Throughout the intervening period there has been great change to our society and the law of nuisance has been adapted by the courts to respond to those changes. Leading text Clerk & Lindsell on Torts (18th edition) sums up the evolutionary nature of the common law of nuisance: As new interests in matters, such as privacy or pollution are recognised, and new forms of interference emerge from the complexity and interdependence of modern society, the principles of tort can be used to

2 provide an appropriate response. The law of nuisance is as relevant today as it ever has been. IHL174 (pp19-22) underlined the legal principles of the law of nuisance (in the context of noise). This article takes a look at some of the most interesting nuisance cases of the past year, from the damage caused by Europe s biggest peacetime explosion to the flooding of private homes from a new development. Human rights and private nuisance: Dobson & Ors v Thames Water Utilities Ltd & Anor [2009] Since the House of Lords landmark judgment in Hunter v Canary Wharf Ltd [1997], it has been settled law that a proprietary interest is required to bring a claim in private nuisance. Those without an interest in the land affected by the nuisance cannot claim compensation at common law. However, Hunter was decided before the Human Rights Act (HRA) 1998 came into force. There has subsequently been some debate over the impact of HRA 1998 and, in particular, Article 8(1) of the European Convention of Human Rights, on the remedies available to those who, despite the fact that they have no property interest, are still affected by a nuisance. The interaction between damages for private nuisance and damages under HRA 1998 came under scrutiny in the Court of Appeal decision in Dobson. As a statutory water undertaker, Thames Water is a public authority and is therefore subject to HRA The claimants alleged that Thames Water s negligent operation of the Mogden Sewage Treatment Works gave rise to problems from odours and mosquitoes, but some of the potential claimants could not bring an action in nuisance because they had no interest in the property in which they lived (despite being affected by the odours and mosquitoes to the same extent as those with a property interest). The Court of Appeal was asked to consider whether those without a proprietary interest could be compensated under HRA 1998 in circumstances when individuals with a proprietary interest in that property had already received compensation as a result of the nuisance claim. Thames Water argued that this would make them doubly liable for the same loss, having already compensated the land owner. The Court of Appeal was also asked to consider whether the Court was able to top up the amount of compensation in the event that damages in private nuisance were lower than those available under HRA The Court of Appeal confirmed that it was possible for those without a proprietary interest to be compensated under HRA 1998, even if others in their home had already been compensated in damages under private nuisance. However, whether compensation was appropriate would depend on each individual case and the fact that others in the home (such as a partner or parents) had received damages in nuisance would be a factor. On the issue of top-up damages the Court was less equivocal. The Court considered that damages under HRA 1998 will almost always be lower than those available in private nuisance and therefore it was highly improbable, if not inconceivable, that HRA 1998 would require the award of a further sum for breach of Article 8 on top of damages for private nuisance. Dobson opens the door for claims against public bodies for compensation under HRA 1998 even if the claimants have no interest in the property. At the time of writing the High Court trial is in progress and it will be interesting to see the level of damages awarded (if any) under HRA Tortious liability for major disasters: Colour Quest Ltd & Ors v Total Downstream UK Plc & Ors (Rev 1) [2009] Colour Quest, better known as the Buncefield Litigation, arises from the Buncefield oil storage depot explosions in December 2005 that caused large-scale damage to neighbouring land and considerable disruption to business. Residents, businesses and insurance companies commenced legal proceedings in

3 negligence, private nuisance, public nuisance and under the rule in Rylands v Fletcher to recover their losses from those in charge of the oil storage depot, with damages estimated at 750m. The site operator was a joint venture company between Total UK (60%) and Chevron (40%), but the claims were brought against the parent companies, Total and Chevron, as well as the joint venture company. As a preliminary issue, the High Court was asked to address the liability of each of the defendants. Steel J concluded that Total was the de facto operator of the site and was therefore at fault for the disaster. Total appealed, claiming that it was entitled to recover a contribution from Chevron under the terms of an indemnity between the two companies, but the Court of Appeal held that Chevron had not indemnified Total against the consequences of its own negligence. The appeal also considered whether Shell UK, as the beneficial owner of some of the pipelines and vessels at the Buncefield site, was entitled to recover in negligence, private nuisance or under the rule in Rylands v Fletcher for the economic losses it had suffered as a result of not being able to use the damaged vessels and pipes. Total accepted liability for the fuel in the pipes (which was legally owned by Shell), but refused to compensate Shell for the consequential losses arising from the business disruptions, valued at around 100m. At first instance the High Court held that Shell was not entitled to recover as it was not the legal owner of the damaged property, but the Court reversed that decision and ruled that, as a beneficial owner, Shell could recover in negligence for the economic losses as the legal owners were also joined to the claim, and therefore could recover the economic losses on behalf of Shell and hold those sums on trust. The Court of Appeal did not address the question of whether a beneficial interest in the property was sufficient to recover consequential losses in nuisance. The Buncefield Litigation demonstrates the importance of ensuring that liability for major accidents is considered by those entering joint ventures and other commercial arrangements, and serves as a reminder that the courts may look beyond the wording of the agreements to identify the person with de facto control of operations on site when considering liability. nuisance liability for birth defects: Re Corby Group Litigation[2009] The High Court found that Corby Borough Council was liable in public nuisance, negligence and breach of statutory duty for birth defects suffered by Corby residents whose mothers were exposed to toxic materials in the atmosphere during the Council s clean up of the town s heavily contaminated former British Steel plant in the 1980s and 1990s. The claim related to birth defects, including shortened or missing arms, legs and fingers suffered by a group of children born between 1986 and It was alleged that the birth defects had been caused by the pregnant mothers ingestion or inhalation of harmful substances generated by the reclamation works and spread in various ways throughout Corby. The claimants could not bring a claim in private nuisance, as damages for personal injuries are not recoverable in private nuisance. Instead, the claimants pleaded public nuisance. The Council applied to strike out the claims in public nuisance on the basis that damages for personal injury were not recoverable in public nuisance either (relying on the judgment of the House of Lords in Hunter). The Court of Appeal did not agree with the Council and held that Hunter had not reversed the long-established principle that public nuisance could give rise to damages for personal injury. The claimants must now return to court to establish a causal link between the reclamation works and the birth defects on a case-by-case basis. Corby District Council was not covered by insurance, and therefore any damages and costs will ultimately be picked up by the taxpayer. This is a reminder of the importance of checking the existence and extent of insurance policies to see whether those policies would cover environmental claims.

4 The Council s appeal is due to be heard this spring. The principal grounds for appeal centre on whether the harm caused by the restoration works was truly a foreseeable consequence of the Council s actions. Planning consent and private nuisance: Watson & Ors v Croft Promo-Sport Ltd [2009] It is a long-established principle that planning consent cannot authorise a nuisance. A local planning authority may authorise an activity, but a court may still impose restrictions (or even a complete ban) if it upholds a claim by aggrieved neighbours for nuisance caused by that activity. However, the grant of planning consent and its subsequent implementation can change the character of a location, which is one of the considerations a court must take into account when deciding whether a nuisance is occurring in the first place. Therefore, an activity that would have been an actionable nuisance prior to the planning consent may no longer be a nuisance once development has commenced (see Gillingham Borough Council v Medway (Chatham) Dock Co Ltd [1993]). The interaction of these principles creates uncertainty for developers, landowners and potential claimants, as the recent Court of Appeal decision in Watson demonstrates. Watson did not change the boundaries of the law of nuisance, but it did provide a reminder of the interaction between the planning regime and the tort of private nuisance. The defendant was a motor racing operator, with planning permission to race on 210 days of the year. The neighbours considered that the noise was excessive and brought a claim in private nuisance. The High Court held that the planning consent had not altered the character of the (predominantly rural) area and found that the noise from the motor racing was a nuisance. However, the High Court also considered that the neighbours could be adequately compensated in monetary terms and refused an injunction. Both parties appealed. The Court of Appeal upheld the High Court s finding that a nuisance was being committed but, holding that the lower court was wrong to refuse an injunction, it imposed an injunction limiting the racing to 40 days of the year. The judgment provides helpful guidance on the circumstances where monetary compensation may be considered to be an adequate remedy in lieu of an injunction. Businesses should be aware that planning permission does not provide absolute certainty when interference (such as noise or odour) from a development may affect the local community. Developers should actively engage with stakeholders at an early stage in the planning process to reduce the chances of private claims by affected neighbours once the development is in operation. Statutory nuisance and environmental permits: Ethos Recycling Ltd v Barking & Dagenham Magistrates Court & Anor [2009] The Divisional Court has provided clarification on the issue of whether local authorities can serve statutory nuisance abatement notices without the permission of the Secretary of State in circumstances where the Environment Agency (EA) could take enforcement action under an environmental permit. The question has divided commentators for many years, but had never previously been considered by the courts. In Ethos, dust arising from a recycling facility was causing a nuisance to neighbouring properties. The EA was using its enforcement powers to improve the dust suppression facilities on site and, during the same period, the local authority served an abatement notice that also required steps to suppress the dust to prevent a nuisance from recurring. The recycling operator appealed the abatement notice, arguing that it had no legal effect because the local authority required the consent of the Secretary of State to serve an

5 abatement notice pursuant to s79(10) of the Environmental Protection Act The Magistrates Court held that s79(10) only required the permission of the Secretary of State to commence summary proceedings and the issuance of an abatement notice did not constitute summary proceedings. The recycling operator judicially reviewed the decision of the Magistrates Court and the Divisional Court had an opportunity to provide clarity on this issue. Scott Baker LJ and Cranston J concluded that summary proceedings constituted proceedings issued at court and not the issue of an abatement notice. The Divisional Court found that the local authority was the natural recipient of complaints from people affected by a nuisance in its area and had an obligation to issue an abatement notice to prevent the continuation or recurrence of the nuisance, even though there was also ongoing regulation by the EA. Those affected by nuisances from sites regulated by environmental permits may now feel empowered to put further pressure on their local authority to take action even when the EA appears to be using its own enforcement powers. Local authorities can no longer say it is not a matter for us. An appeal of the decision in Ethos is to be heard over the summer. Nuisance from flooding: Lambert & Ors v Barratt Homes Ltd (Manchester Division) & Anor [2009] Lambert demonstrates the risk to developers and landowners that can arise from the flooding of neighbouring properties as a consequence of a development. It continues the current trend in the courts for holding parties liable for damage caused by flooding where the potential consequences were known and where steps could have been taken to address the problem. Lambert concerned the flooding of homes following a residential development on an adjacent site. A claim was brought against both the developer and the local authority. The claimant s argument was that the developer was liable because it had filled in a drainage ditch during the development and this had caused the flooding. The claim against the local authority was that the water originated from the higher land owned by the local authority and the local authority was liable because it was aware of the problems. Therefore it had a measured duty of care to take steps to abate the nuisance, even though there was no suggestion that it had caused the problem. The court found that the developer had caused the flooding by obstructing the drainage ditch and was therefore liable. The court also found that the local authority was liable because it had a measured duty of care to take steps to prevent the flooding occurring. By failing to take action, it was liable for the damage caused to the neighbouring properties. The defendants are seeking an appeal and this will be watched with interest. Lambert is the most recent in a series of cases that demonstrates a clear judicial trend to find landowners liable for failing to take steps to alleviate flooding, even when the landowner has not caused the problem. The courts have held that landowners have a duty to take steps to alleviate flood risk once they are aware of the problem. The duty is measured, not absolute, and the costs of the steps required to alleviate the problem and the means of the landowner are all factors that are taken into consideration. However, for both local authorities and developers with deep pockets, the courts are likely to consider that there will be sufficient funds available to carry out preventative works once the problem has been identified. Flooding litigation is a complex area of the law of nuisance and one that is constantly evolving. In Latimer v Carmarthenshire County Council (2007, unreported), a homeowner brought a claim against a local authority for flooding originating from an inadequate culvert. The general rule is that a party that culverts a watercourse has an absolute duty to ensure that it remains sufficient for carrying the water. However, in Bybrook Barn Centre Ltd & ors v Kent County Council [2000], the local authority was found to have only a measured (rather than absolute) duty to improve a culvert that it inherited when factors outside of its

6 control led to an increase in water flowing through it. Latimer reverted to the general rule in circumstances where a local authority had itself caused the additional floodwater that contributed to the flooding, so it had an absolute, rather than a measured, duty of care to ensure that the culvert was maintained or improved to a sufficient degree to carry those floodwaters away from neighbouring properties. Developers and local authorities should be aware of the risks of flooding litigation brought by neighbours aggrieved by new developments, and the increased surface water run-off that may result from those developments.