Welcome to the fourth edition of RED Alert of 2024.
Also featuring in this month's update:
Manchester Ship Canal Company Ltd v United Utilities Water Ltd [2024] UKSC 22
The Supreme Court's recent decision in Manchester Ship Canal Company Ltd v United Utilities Water Ltd [2024] UKSC 22 addressed whether private waterway owners can bring nuisance claims for water pollution caused by statutory sewerage undertakers, even without negligence or deliberate misconduct, under the Water Industry Act 1991.
Understanding common law nuisance
Common law nuisance arises when a defendant’s actions unduly interfere with a claimant’s land use. Typically, nuisances are ongoing or repeated. Defendants may be liable for causing nuisances directly (eg, noise or smells) or for failing to act against existing nuisances (eg, flooding due to unauthorised drainage).
The facts
This case concerned a long running dispute between the owner of a canal in Manchester, the Manchester Ship Canal Company (MSCC), and United Utilities (UU), who are the sewerage undertaker for the Northwest of England.
UU's sewerage network consists of around 100 outfalls discharging material from sewers, treatment works, and pumping stations into the canal. When operating within hydraulic capacity limits, these outfalls discharge surface water or treated effluent; however, where the capacity limits are exceeded, some outfalls discharge foul water into the canal. As a result of these untreated discharges, MSCC had threated to bring a private nuisance or trespass claim against UU. In response, UU applied to court for a preliminary declaration that MSCC was not able to do so (unless it was able to show that any negligence or deliberate wrongdoing by UU) on the basis that the Water Industry Act 1991 (the 1991 Act) exclusively provided remedies through statutory enforcement mechanisms, thus precluding private law claims.
Earlier decisions
Both the High Court and the Court of Appeal had previously ruled in favour of UU and dismissed MSCC's claim, citing the 1991 Act which sets out the rights and duties of sewage undertakers, allowing them to discharge treated sewage into watercourses with landowner consent and acquire land compulsorily if necessary.
In front of the lower courts, UU also relied heavily on the House of Lords case of Marcic v Thames Water Utilities Ltd [2003] UKHL 66 where the claimant's property was flooded due to a local sewer becoming overloaded. UU claimed that the only way to avoid the discharges of foul water into the canal was to construct new sewerage infrastructure and argued that Maric that Parliament's intention was that the construction of new sewerage infrastructure was a matter for the Secretary of State or the regulator and not the Court.
Supreme Court judgment
In a landmark ruling, the Supreme Court overturned lower court decisions and sided with MSCC. In their leading judgment, Lords Reed and Hodge found as follows:
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When considering whether a claim by MSCC in nuisance or trespass is excluded by the 1991 Act, the starting point should always be that the owner of a canal or other waterway has a property right in the watercourse which is protected by common law. As a result, the discharge of polluting water into this watercourse can constitute an actionable nuisance if it interferes with the owner's use or enjoyment of its property. A body such as UU exercising statutory powers will only be exempt for liability for such nuisance if it is acting within such powers or has been granted some form of statutory immunity. This was not the case for UU in these circumstances.
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Marcic could be distinguished from this case and should not be overruled. Unlike Marcic, this case did not hinge on regulatory contraventions but stood on its own merits under common law. In Marcic, sewage escaped from an overloaded drain not intended for sewage release. Mr Marcic’s claim related to Thames Water’s failure to build more sewers regionally, making regulatory complaints the sole remedy. In contrast, discharges into Manchester Ship Canal occurred through controlled outlets designed for treated sewage release but occasionally exceeded capacity, resulting in untreated discharges.
Our comment
There is no doubt that the Supreme Court's decision in this case has come at a time when statutory sewerage operators are coming under increased scrutiny and there has been public outcry at discharges into British water courses. In circumstances where sewage spills into British waterways more than doubled in 2023, suggestions that this case will "open the floodgates" to nuisance claims against statutory operators in the future certainly has some merit. However, the Supreme Court did make clear in their judgment that a balance must be struck between the need to maintain the regulatory scheme established by the 1991 Act against the private rights of watercourse owners and this may impact whether injunctive relief available to landowners bringing any such claims.
