Cambridge Water Co Ltd v Eastern Counties Leather plc [1993] UKHL 12 (09 December 1993)

A tannery's solvent spillages seeped through the ground and contaminated a water company's borehole 1.3 miles away. The House of Lords held that foreseeability of damage is a prerequisite for liability under the rule in Rylands v Fletcher, and since the damage was not foreseeable at the time of spillage, the tannery was not liable.

Facts

Eastern Counties Leather plc (ECL) operated a tannery at Sawston, using a solvent called Perchloroethene (PCE) in the degreasing process since the 1960s. Regular small spillages of PCE occurred during the topping-up process until 1976, when ECL changed to a bulk storage system. The spilled PCE seeped through the concrete floor, travelled through the ground, and contaminated the chalk aquifer beneath.

Cambridge Water Company (CWC) purchased a borehole at Sawston Mill in 1976, approximately 1.3 miles from ECL’s premises. Tests at the time indicated the water was wholesome. However, following the introduction of EC Directive 80/778/EEC and subsequent UK regulations setting maximum concentration values for organochlorine compounds, the water was found to contain PCE levels exceeding the permitted threshold. The borehole was taken out of commission in October 1983.

Scientific Background

The PCE had travelled vertically through the chalk aquifer until arrested by an impermeable layer at approximately 50 metres depth, where it formed pools that slowly dissolved into groundwater and migrated towards Sawston Mill. Before the late 1970s, there was limited scientific understanding of how chlorinated solvents behaved in groundwater, and the ability to detect such contaminants at the relevant concentrations only developed during that decade.

Issues

The key legal issues were:

• Whether ECL was liable in negligence for the contamination
• Whether ECL was liable in nuisance
• Whether ECL was liable under the rule in Rylands v Fletcher
• Whether foreseeability of damage is a prerequisite for liability under Rylands v Fletcher
• Whether ECL’s use of PCE constituted a ‘natural use’ of land

Judgment

The House of Lords unanimously allowed ECL’s appeal, restoring the decision of Kennedy J at first instance.

Foreseeability Requirement

Lord Goff of Chieveley, delivering the leading judgment, held that foreseeability of damage of the relevant type is a prerequisite of liability under the rule in Rylands v Fletcher. His Lordship traced the historical connection between nuisance and the rule in Rylands v Fletcher, noting that Professor Newark had convincingly shown the rule was essentially concerned with extending the law of nuisance to cases of isolated escape.

Since the Privy Council in The Wagon Mound (No. 2) had established that foreseeability is required for recovery of damages in private nuisance, Lord Goff concluded it would be logical to extend the same requirement to liability under Rylands v Fletcher. This would lead to a more coherent body of common law principles.

Application to the Facts

The judge at first instance had found that a reasonable supervisor at ECL could not have foreseen, in or before 1976, that the repeated spillages of small quantities of solvent would lead to any environmental hazard or damage. Any spillage would have been expected to evaporate rapidly, and there was no expectation that it would seep through the floor into the soil below. Since the damage was not foreseeable at the relevant time, ECL could not be held liable.

Natural Use of Land

Although not necessary for the decision given the foreseeability finding, Lord Goff addressed whether ECL’s use constituted a ‘natural use’ of land. His Lordship disagreed with the trial judge’s conclusion on this point, stating that the storage of substantial quantities of chemicals on industrial premises should be regarded as an almost classic case of non-natural use. The mere fact that such use was common in the tanning industry, or that it provided employment to the local community, was insufficient to bring it within the exception.

Role of Legislation

Lord Goff observed that strict liability for high-risk operations is more appropriately imposed by Parliament than by courts, as statute can identify relevant activities and lay down precise criteria. Given the development of well-informed legislation addressing environmental pollution, there was less need for courts to develop common law principles for the same purpose.

Implications

This decision is of major significance for several reasons:

• It established definitively that foreseeability of damage of the relevant type is required for liability under Rylands v Fletcher, bringing it into line with the law of nuisance
• It clarified the relationship between Rylands v Fletcher and nuisance, treating the former as essentially an extension of the latter to cases of isolated escape
• It declined to develop the rule into a general principle of strict liability for ultra-hazardous activities, following the approach in Read v Lyons
• It indicated that ‘historic pollution’ occurring before the relevant regulatory framework was in place may not give rise to common law liability
• It confirmed that industrial storage of chemicals is likely to constitute non-natural use of land

The case represents a significant limitation on strict liability in English tort law, emphasising the role of statutory regulation in environmental protection rather than judicial expansion of common law principles.

Verdict: Appeal allowed. The order of the Court of Appeal was set aside and the order of Kennedy J dismissing the claim was restored. ECL was not liable to CWC because the damage caused by the contamination was not foreseeable at the time of the spillages.

Source: Cambridge Water Co Ltd v Eastern Counties Leather plc [1993] UKHL 12 (09 December 1993)