The Supreme Court rules on entitlement of canal company to bring an action against water company for sewerage discharges

In a landmark ruling on a case dating back from 2010, the UK Supreme Court ruled in July 2024 that United Utilities Water Ltd (United Utilities) can be held liable by the owners of watercourses for damage caused to those watercourses by untreated sewage discharges.

This article explores the background of the Manchester Ship Canal Company Ltd v United Utilities Water Ltd case and whether the Water Industry Act 1991 Act excludes common law rights of action in nuisance and trespass.

Background of the case

The Supreme Court was asked to decide whether the owner of the beds and banks of a canal, the Manchester Ship Canal Company Ltd (the Canal Company), a statutory harbour authority (Peel Ports), can bring a claim in nuisance or trespass when the canal is polluted by discharges of foul water from outfalls maintained by United Utilities. 

The Canal Company threatened to bring a claim against United Utilities for trespass and nuisance. In response, United Utilities asked the court to make a declaration that the Canal Company had no right to do so. 

The court was not asked to decide whether the Canal Company’s claim would be successful on the relevant facts. Rather, whether the claim was barred by the Water Industry Act 1991. 

Does the Water Industry Act 1991 Act exclude common law rights of action in nuisance and trespass cases?

A body which exercises statutory powers, such as a sewerage undertaker, is liable in the same way as any other person if it is responsible for a nuisance, trespass or other tort, unless either it: (i) is acting within its statutory powers, or (ii) has been granted some statutory immunity from such claims. 

The Supreme Court held that United Utilities was not acting within its statutory powers when discharging untreated sewage into the canal because the Water Industry Act 1991 does not provide sewerage undertakers with statutory authority to discharge untreated sewage into watercourses.

The court also held that:

• United Utilities did not have immunity from claims for nuisance because the Water Industry Act 1991 expressly provides that common law remedies for nuisance – such as an injunction or damages – are an available remedy.
• The Water Industry Act 1991 expressly protects the owners of watercourses, and other rights-holders, by stating that nothing in the relevant sewerage provisions authorises a sewerage undertaker to damage a watercourse, or the quality of the water in it, without consent.
• Polluting discharges cannot be regarded as having been impliedly authorised by parliament, since they are not an inevitable consequence of a sewerage undertaker’s performance of its statutory powers and duties.
• That although the regulatory scheme established by the Water Industry Act 1991, might be disrupted if the court were to grant injunctions which required a sewerage undertaker to spend large sums on new infrastructure, this does not mean that the courts cannot instead make an award in damages, both for past invasions of property rights and for future or repeated invasions of those rights. 

The Supreme Court’s decision could result in an increase in this type of claim, something we’ve commented on before here, and owners of watercourses may consider taking action against sewerage undertakers for polluting water.

For more information on the Supreme Court Judgment, read the full article here.

For more information, please contact the business risk and regulation team.