CAMBRIDGE WATER CO. v EASTERN COUNTIES LEATHER PLC

Foreseeability within the tort of negligence and nuisance has over time, become an integral element of the decision making process; yet, there was a period when mere acts were suffice to claim damages.

In this matter, the actions of a manufacturer that while deemed harmless at the time, became key to a claim for substantial costs, and one in which existing precedent was brought into question on the principles of natural justice.

Founded in 1879, the appellant company Eastern Counties Leather (ECL), were a leather goods manufacturer that relied upon particular treatment processes in order to soften the pelts used.

Since the early 1950s, the firm used trichloroethene (TCE), until around 1973, when they switched to perchloroethene (PCE), as was then considered the industry standard. 

Around 1976, the respondent company Cambridge Water Company (CWC), purchased an industrial site containing a borehole, situated roughly one to three miles north west of the village in which the ECL operated, and began using the hole as a source of public drinking water.

Prior to its implementation within the regional water supply, a number of test were carried out to ensure contamination levels were below the prescribed limits set under the Water Resources Act 1963.

In 1980, both the World Health Organisation and Council of the European Communities drafted Directive 80/778/EEC in relation to the safe human consumption of drinking water, which was later transposed into the Water Industry Act 1991 under secondary legislation.

Under this Act, it was stated that the maximum admissible concentration of PCE was 10µg per litre of water.

Subsequent borehole tests carried out in the early 1980s showed PCE concentration levels of between 70 and 170µ per litre, which prompted investigation by the respondents as to the source of the contaminant.

As was evident, ECL had continued to use PCE until 1991, while it was common for the appellants to store roughly 25,000 litres in drums at any one time.

During the application stage, these drums were driven by forklift to the degreasing machines, whereupon the PCE was poured directly into their reservoirs.

It was not uncommon for spillages to occur; after which, the PCE would be quickly cleaned up, so as to avoid accidents or inhalation of fumes; and as the floors themselves were concrete, it would not have seemed possible that any residual liquid could seep into the soil below.

After commissioning independent research into the presence of PCE in the borehole, it was established that trace elements of PCE had in fact, passed through the sub-structure of ECL over a course of nearly twenty years, eventually joining the water supply used by the appellants.

And while the individual amounts were insufficient to cause harm, they had amassed over time so as to push the levels found far beyond that allowed; which in turn, led to the decommissioning of the borehole and inevitable litigation.

In the first hearing, the respondents claimed for substantial damages of around £1m for the cost of a new pumping station, following the borehole closure and cited negligence, nuisance and non-natural use of the land provided under the principles espoused in Rylands v Fletcher; upon which, the claim was summarily dismissed.

Presented to the Court of Appeal, the respondents argued that the judge had erred in law, while the appellants contended that they were not liable for the lost PCE on grounds of foreseeability and that the burden of proof was that of the respondents and not the appellants, and the evidence submitted was inadequate.

Turning to the outcome in Ballard and Tomlinson, the Court held that Pearson J, who remarked:

“[I]t seems to me that although nobody has any property in the common source, yet everybody has a right to appropriate it, and to appropriate it in its natural state, and no one of those who have a right to appropriate it has a right to contaminate that source so as to prevent his neighbour from having the full value of his right of appropriation. . . . Neither does it matter whether the parties are or not contiguous neighbours. If it can be shown in fact that the defendants have adulterated or fouled the common source, it signifies not how far the plaintiffs land is from their land.”

Ballard and Tomlinson

Encapsulated the very essence of nuisance; and that in failing apply the principle, the previous judge had overlooked the strictness of the nuisance doctrine and thus denied the right to damages.

Thus for that fundamental reason, the appeal was upheld and almost £1.7m awarded in favour of the respondents.

Presented before the House of Lords, the dicta of Blackburn J in Rylands explained well that:

We think that the true rule of law is, that the person who for his own purposes brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and, if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape.”

Rylands v Fletcher

Yet, the House held that while nuisance in its singular use brings certainty to the liability of those found answerable, it precludes the necessary factor of foreseeability; which on this occasion, was starkly evident, inasmuch as it had taken almost twenty years for the PCE levels to reach significant risk, and that there was insufficient knowledge on the part of the appellants to even begin to appreciate that liquids could permeate concrete before navigating through numerous other substratum, prior to joining a stream more than thirty metres below ground.

For this reason, it was held that the previous decisions were unsustainable; and that rather than a matter for negligence or nuisance, it was at best, an example of historic pollution which was not subject to legislative effects at the time, thus the appeal was allowed, while the House reminded the parties that:

“[f]oreseeability of damages a prerequisite of the recovery of damages under the rule. ”