R (on the application of Mott) v Environment Agency [2018] UKSC 10

Mr Mott, a salmon fisherman with leasehold rights to a putcher rank in the Severn Estuary, challenged the Environment Agency's severe catch limits as breaching A1P1. The Supreme Court held that imposing conditions eliminating 95% of his livelihood without compensation was a disproportionate burden.

Facts

Mr Mott held a leasehold interest in a ‘putcher rank’ salmon fishery at Lydney on the Severn Estuary, derived from a Certificate of Privilege dated 14 May 1866. He had operated the fishery as his full-time occupation since 1979, with an average catch of around 600 salmon per year, producing a gross annual income of approximately £60,000. The lease entitled him to fish 650 putchers and contained strict restrictions on assignment.

The Environment Agency, responsible for managing salmon stocks (particularly in the Wye and Usk rivers designated as Special Areas of Conservation under the Habitats Directive), sought to phase out mixed stock fisheries. Following amendments to the Salmon and Freshwater Fisheries Act 1975, the Agency gained the power from 1 January 2011 to impose catch limitations on historic installations.

Relying on the University of Exeter Report and a Habitats Regulations Assessment, the Agency imposed catch limits on Mr Mott’s licences of 30 salmon (2012), 23 (2013), and 24 (2014). These limits were fixed by reference to the lowest catch by any historic installation fishery during the preceding decade, with the consequence that Mr Mott’s 650-putcher commercial fishery received the same allocation as smaller hobby operations of 50 baskets or fewer. Mr Mott contended this rendered his fishery wholly uneconomic and the lease worthless.

Issues

The appeal concerned Article 1 of Protocol 1 (A1P1) to the ECHR. The issues were:

• Whether the catch conditions amounted to control or de facto expropriation under A1P1;
• If control, whether the ‘fair balance’ required payment of compensation;
• If expropriation, whether exceptional circumstances justified the absence of compensation.

Arguments

Appellant (Environment Agency)

Mr Maurici QC submitted that the restrictions constituted a control rather than expropriation, relying on Mellacher v Austria and the narrowness of de facto expropriation as illustrated in Papamichalopoulos v Greece. He emphasised the special weight afforded to environmental protection in European and domestic law, particularly under the Habitats Directive, citing Sweetman v An Bord Pleanála and Hamer v Belgium. He argued compensation would contravene the ‘polluter pays’ principle.

Respondent (Mr Mott)

Mr Hockman QC submitted that the catch conditions nullified the practical use of the lease and amounted to expropriation. Even as a control, the measures imposed an excessive and disproportionate burden requiring compensation. He drew attention to section 26 of the 1975 Act, which recognises compensation where persons are wholly dependent on fishing for their livelihood.

Judgment

Lord Carnwath, delivering the unanimous judgment, dismissed the Agency’s appeal.

The Court held that the distinction between expropriation and control under A1P1 is neither clear-cut nor crucial. The three rules articulated in Back v Finland are interconnected and must be read together, with each interference required to pursue a legitimate aim proportionately and strike a ‘fair balance’ as recognised in Hutten-Czapska v Poland.

Lord Carnwath accepted that the restrictions were properly characterised as a control measure exercised for legitimate environmental protection. However, the critical question was whether the effect on Mr Mott was excessive and disproportionate. Although environmental protection carries significant weight, this does not displace the need to strike a fair balance, and the potential relevance of compensation is recognised in section 26 of the 1975 Act itself.

The Court endorsed the trial judge’s analysis. The restrictions eliminated at least 95% of the benefit of Mr Mott’s right, making the measure ‘closer to deprivation than mere control’. The Agency had given no meaningful consideration to the impact on Mr Mott’s livelihood. The adverse effect was exacerbated because the method of levelling all catches down to the lowest historic level placed by far the greatest burden on Mr Mott, whose fishery was commercial and full-time, as compared with smaller operators using their rights only for leisure. The judge’s suggestion that the lease might retain some small leisure value was doubtful given the strict restrictions on assignment.

Contrasting authorities were considered: in Posti v Finland, compensation had been paid and the interference did not completely extinguish the right; in Pindstrup Mosebrug A/S v Denmark, the impact was not unduly severe. The present case was distinguishable from Trailer and Marina, which concerned a challenge to legislation in principle rather than an executive decision applied to a specific claimant.

Implications

The decision confirms that, although A1P1 affords national authorities a wide margin of discretion in imposing environmental controls and provides no general expectation of compensation, a fair balance must still be struck in the particular circumstances of each case. Where a regulatory measure has a severe and disproportionate impact on an individual claimant — here eliminating almost the entire economic value of a long-established commercial livelihood — compensation may be required to prevent a breach of A1P1.

Lord Carnwath emphasised that this was ‘an exceptional case on the facts, because of the severity and the disproportion (as compared to others) of the impact on Mr Mott’. Where authorities have properly considered fair balance, courts should give weight to their assessment. The judgment underscores the importance of decision-makers expressly considering the individual impact of regulatory measures, particularly where a scheme disproportionately burdens one rights-holder compared with others subject to the same regime.

The decision is significant for practitioners advising on regulatory takings, environmental licensing, and property rights. It illustrates that the formal characterisation of a measure (as deprivation or control) is less important than a realistic assessment of its proportionate impact, and that severe commercial consequences falling disproportionately on one individual may trigger a requirement for compensation even where the regulatory aim is legitimate and important.

Verdict: The appeal by the Environment Agency was dismissed. The Supreme Court upheld the declaration that the catch limit conditions imposed on Mr Mott’s licences for 2012, 2013 and 2014 amounted to an unlawful interference with his rights under Article 1 of Protocol 1 of the ECHR in the absence of compensation.

Source: R (on the application of Mott) v Environment Agency [2018] UKSC 10