Turning the Tide: Water Companies, Pollution and the Supreme Court

Bexley Beaumont Partner Emma Tattersdill explains that whilst having the Supreme Court operate from Manchester this week is something of a judicial milestone, one of the cases which it’s due to hear could be even more significant and change how unauthorised discharges of sewage by water companies are dealt with in the future.

This week promises to be a truly momentous one for the North West.

Over the course of the next few days, the Supreme Court will be based in Manchester.

It is the first time that the highest court in the land will be dealing with matters outside of one of the UK's four national capitals - London, Edinburgh, Cardiff and Belfast (https://www.supremecourt.uk/cases/uksc-2022-0121.html).

Apart from making judicial history on the move, however, the first case to be heard by the Court could have enormous significance for one of the North West's major waterways.

It is the latest stage of a dispute featuring United Utilities and the unauthorised discharge of untreated material from sewers which it operates into the Manchester Ship Canal (https://www.supremecourt.uk/cases/uksc-2022-0121.html).

The central issue is whether the canal's owner, the Manchester Ship Canal Company, can bring a private claim for damages in respect of the pollution.

United Utilities has argued that the Canal Company cannot take legal action of that sort because the enforcement capability for any breach of duty by a water company or sewerage operator rests with the relevant regulatory authority, OFWAT.

That view has prevailed at both the High Court and, last June, at the Court of Appeal.

Yet the opportunity to put that position to the legal test once more offers the tantalising prospect for private individuals and organisations who have suffered following the unlawful discharge of sewage of seeking a more particular form of redress.

Earlier cases of this kind have generally met with failure, starting with the notable case of Peter Marcic, a homeowner in Middlesex whose property was affected by "serious and repeated" flooding from nearby sewers.

In 2003, the House of Lords reiterated that the responsibility for taking action lay not with Mr Marcic but OFWAT (https://www.bailii.org/uk/cases/UKHL/2003/66.html).

A victory for the Manchester Ship Canal Company would potentially have consequences well away from the North West.

Only last November, it was revealed that there had been 56 successful prosecutions against water and sewerage companies since 2015 resulting in fines totalling more than £141 million (https://www.gov.uk/government/news/water-company-fines-to-be-channelled-into-environmental-improvements#:~:text=Since%202015%2C%20the%20Environment%20Agency,is%20returned%20to%20the%20Treasury.)).

United Utilities itself paid £155,000 000 to environmental charities by way of enforcement undertakings after admitting polluting two watercourses in the summer of 2016 (https://www.gov.uk/government/news/enforcement-undertakings-accepted-from-united-utilities)

The Supreme Court case against United Utilities coincides with a great deal of public debate around a Government initiative to tackle discharges from storm overflows.

The Reduction Plan unveiled in August detailed how there are about 15,000 storm overflows in England which are designed to avoid the fate suffered by Mr Marcic and others after him of having waste back up during stormy weather when the sewer system is under strain (https://www.gov.uk/government/publications/storm-overflows-discharge-reduction-plan).

Instead, the overflows discharge excess sewage and rainwater to rivers, lakes, or the sea.

Ministers want to avoid the damage to public health and the environment which can ensue.

Their proposals include "clear and specific targets for water companies, regulators and the Government" to ultimately eliminate the harm created by storm overflows.

Even so, the Reduction Plan is currently the subject of two judicial reviews, following separate complaints by the Marine Conservation Society and the environment charity Wildfish that it doesn't go far enough.

One of their objections is that the plan will only introduce controls for future incidents involving the illegal discharge of sewage, leaving OFWAT to tackle current problems (https://wildfish.org/latest-news/wildfish-granted-permission-to-challenge-the-governments-sewage-overflows-plan/#.Y-4ZQHR39Uk.linkedin).

The domestic water industry's representative body, Water UK, has broadly welcomed the plan and says that water companies are ready to invest considerable amounts to honour their obligations.

Media, however, have also reported that some of them regard the Plan as too tough and likely to drive up customers' bills (https://www.thetimes.co.uk/article/46759f32-abc3-11ed-bfe8-f09d3c021ab0?shareToken=2ccbd2c5127dc375479dc15b06ce2d4b).

It is broadly accepted in Westminster and among environmental campaigners that action is urgently needed.

Even Sir James Bevan, in a speech last month marking the end of his spell as Chief Executive of the Environment Agency, lamented that attempts to improve water quality were "flatlining" and "a very long way" from the Government's target of having getting three-quarters of the UIK's waterways "close to their natural state" (https://www.gov.uk/government/speeches/reflections-on-water-the-good-the-bad-and-the-future).

The outcome of this week's Supreme Court case might not - if you pardon the watery pun - open the floodgates to a slew of complaints but it could go some way to rejuvenating clean-up efforts and put water companies under renewed pressure to do their part to help.

To discuss any of the above further, please feel free to contact Emma Tattersdill: emmatattersdill@bexleybeaumont.com  |  07944 371558