Environmental Law News Update

In this latest Environmental Law News Update, William Upton QC, Charles Morgan and Mark Beard consider the responsibilities of developers to protect wildlife, the latest water industry price reviews from Ofwat and a recent judgment ordering the Environment Agency to pay substantial damages for breach of Convention Rights.

New Development and wider environmental net gain?

The MHCLG press release’s headline on this Sunday 21 July was that “Brokenshire orders house builders to protect wildlife”. Whilst we can understand the dying wish of the current Secretary of State to work even on his last Sunday, his advisors could at least get the law right. The other Secretary of State vying to make policy in this area, Michael Gove MP, for Defra, got it right when he said that the government will have to change the law to make this a requirement. Gove said he intended to strengthen the duty of all English public bodies to not only “conserve” the environment, but to “enhance” it, when he made his own final speech about the possible content of the Environment Bill (perhaps due in October). He said the “old duty” on public bodies to “have regard”, in the exercise of their functions, to the purpose of conserving biodiversity (see s.40 of the Natural Environment and Rural Communities Act 2006) is not enough.

This is of course the whole point – that enhancing nature conservation is an option still. We only have specific legal requirements to protect designated sites, species and irreplaceable or priority habitats. These are properly reflected by MHCLG in the current National Planning Policy Framework. Defra’s ambition, as set out in its 25-Year Plan and in the consultation that closed in February, for the government to secure ‘net gain’ – that leaves the natural environment in a measurably better state than it was beforehand – is not yet matched by its powers.

It is no surprise that the actual substance of what the Rt Hon James Brokenshire MP said when launching the new text in the online PPG on the ‘Natural Environment’ was to the effect that “the government has set out its expectations on how developers can protect specific species, including using ‘hedgehog highways’ and hollow swift bricks”. The new PPG text is only a survey of the current possibilities. It describes how “net gain” could be secured by way of planning conditions and planning obligations, including by using off-site measures such as “habitat banks” . This government’s message to house builders remains, as Brokenshire said, to try to “harness” public support and to get building in a way that protects the environment for the next generation. Perhaps his advisors hoped the mention of hedgehogs would disguise the fact that it is still more a case of words and not deeds. Perhaps they also hope that enlightened developers will get ahead of the curve and act now rather than waiting for the law to catch up.

Ofwat makes a splash with PR19 draft determinations

On 18 July Ofwat published its draft determinations under PR19, the latest 5 yearly cycle of price reviews for the water industry. True to form, the occasion was marked with a colourful and graphical publication (see here):

Major targets include:

• 40% reduction in sewer flooding
• 64% drop in supply interruptions
• 17% reduction in leakage
• extra help for almost 2 million more vulnerable customers.

As reported in previous news items, the mot du jour is “resilience”. The phrase du jour is “resilience in the round”. This concept informs the approach to leakage, water saving, sustainable drainage systems, catchment management, investment in new infrastructure, governance and financial prudence.

The aspect of the proposals which has attracted the most press attention has been widely described as “£50 off water bills”. However the actual Ofwat headline is “12% fall in bills before inflation”, and at last week’s Westminster Forum conference on “England’s Water Market” David Black, Ofwat’s senior director for Water 2020, acknowledged that by the time the new prices come into operation in 2020, intervening inflation may well substantially reduce any actual numeric reduction in charges.

Three companies (Severn Trent, South West and United Utilities) have been awarded ‘fast track’ status to reflect the high quality of their plans. Four companies (Anglian, Thames, Yorkshire and SES) were singled out for “significant scrutiny” of their “much higher spending than we consider efficient”.

The determinations are certainly a tough ask for the water and sewerage undertakers. Ofwat says that “most water companies can be run more efficiently than their plans suggest”. Further evidence will now be submitted before the final determinations in December.

Environment Agency ordered to pay substantial damages for breach of Convention Rights

On 18 July 2019, the Administrative Court at Birmingham (HHJ Cooke) handed down judgment in Mott and Merrett v Environment Agency [2019] EWHC 1304 (Admin) in respect of Mr Mott’s claim for damages under section 8 of the Human Rights Act 1998, which was remitted to the High Court following the Agency’s unsuccessful appeal to the UKSC in February 2018 (see: Environment Agency liable to pay damages for breach of Convention Rights).

This judgment is the culmination of Mr Mott’s claims for judicial review challenging the lawfulness of the Agency’s decisions to impose conditions on his licence to fish for salmon in the river Severn using a putcher rank, greatly limiting his permitted catch. The High Court found that the Agency’s decisions were each unlawful interference with Mr Mott’s Convention rights in the absence of compensation, and made an order declaring that an award of damages was necessary to afford just satisfaction to Mr Mott for the Agency’s unlawful interferences with his rights to property under Article 1 of the First Protocol to the ECHR (“A1P1”). The Judge’s decision on the A1P1 point was upheld by the Court of Appeal and the UKSC.

HHJ Cooke has now considered the basis and quantum of compensation to be paid by the Agency. The parties agreed that Mr Mott should be compensated for his financial losses attributable to the breach and that, in principle, the basis for calculating compensation should be the difference between the value of the salmon catch he was permitted to make under the decisions challenged and that which he could have made but for the infringement of his A1P1 rights.

The main issue for the Court was whether this difference should be calculated, as Mr Mott contended, from the number of fish he could have caught if no catch limit had been imposed, or as the Agency asserted, from an assumption of a different catch limit which it could have imposed without any infringement of Mr Mott’s A1P1 rights.

The Agency’s approach to the assessment was based upon an assumption that, but for the catch limits actually but unlawfully imposed, an alternative lawful decision could and would have been taken such that Mr Mott would have been limited to a catch of not more than 60 fish in each year.

The Court comprehensively rejected the Agency’s approach and decided the main issue in Mr Mott’s favour, ordering the Agency to pay damages assessed the sum of £187,278 (the total amount claimed), plus interest and costs.

Addressing the Agency’s case, the Judge held that it is wrong in principle for the court to make findings as to a counterfactual alternative decision that might have been taken but was not. Rather, where a decision has been taken in breach of Convention rights, to determine the position the claimant would have been in if his rights had not been infringed, the proper comparison to be made is with the situation in which the unlawful decision had not been taken at all. The Judge also found that it would be wrong to accept the Agency’s alternative approaches, which in his view, “amount to no more than inviting the court to put its finger in the air and make a guess on an unprincipled basis as to what a properly acting decision maker would have decided.”

In respect of the proper approach to the assessment of damages, the Judge concluded that it would be objectionable in principle to permit the Agency to present a reasoned case as to what decision it might have reached, supported by evidence and compiled with the benefit of hindsight and the court’s findings. Where the citizen has been caused irrecoverable financial loss by an unlawful decision, the Judge decided that it would be unjust to permit the state to escape from responsibility to compensate him by, in effect, backdating a later decision.
As there are very few authorities addressing the proper approach to the assessment of damages under section 8 of the Human Rights Act 1998, the judgment provides welcome clarification on the practical application of the fundamental principle underlying the award of compensation, namely, that the applicant should, insofar as this is possible, be placed in the same position as if his Convention rights had not been infringed.

The full judgment can be found here.

Mark Beard represented Mr Mott at all stages of this litigation, led by Stephen Hockman QC in the Supreme Court.

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