Environmental Law News Update

May 1, 2020

In this latest Environmental Law News Update, Charles MorganChristopher Badger and Natasha Hausdorff consider the refusal of the High Court for a judicial review of the HS2 decision, the Supreme Court judgment on the proper ambit for “ESG” considerations in relation to public pension schemes, and the powers of the Environment Agency regarding ‘fish passes’.

High Court refuses permission to JR decision to continue with HS2

On 6 April 2020, the High Court comprising of Coulson J and Holgate J refused permission to bring judicial review proceedings challenging the Secretary of State for Transport’s decision to continue with the HS2 rail project on the ground that the challenge did not have a realistic prospect of success. Alternatively, even if the Claimant did have a reasonable prospect of success, the balance of convenience favoured continuation of the clearance of ancient woodland.

In Packham v Secretary of State for Transport [2020] EWHC 829 (Admin) the Claimant, TV personality Chris Packham, challenged the decision to continue with the HS2 project on 4 grounds (summarised below):

i) That alleged deficiencies in the Oakervee Review (a specific review tasked with looking at “whether and how HS2 should proceed”) were not properly considered by the Secretary of State;
ii) That there was a failure to give full consideration to environmental impacts;
iii) That insufficient attention was paid to the effect of the project on greenhouse gas emissions during the period up to 2050; and
iv) That the Oakervee Review breached the public’s legitimate expectation of what should be part of the nature, scope and extent of the Review.

All four grounds were dismissed fairly summarily in the Judgment.

In light of the decision preventing the development of the third runway at Heathrow, it is the third ground that is the most interesting. In this case, the High Court found that the argument that the Secretary of State had failed to address the importance of reducing the cumulative burden of carbon emissions in the period leading up to 2050 was wholly unarguable. The Court found that the effects of the project before and after 2050, resulting from construction and the first 60 years of operation had been considered, including a conclusion by the Secretary of State that the project is “likely to be close to carbon neutral”.

It is understood that permission to appeal is currently being considered.

In view of the coronavirus pandemic, the hearing took place remotely, observed by many members of the Press over Skype. It was considered to be a success.

Supreme Court splits over the proper ambit for environmental social and corporate governance “ESG” considerations for public pensions schemes

This week, in [2020] UKSC 16, the Supreme Court split over its consideration of a judicial review concerning how ESG considerations are taken into account by the authorities which administer the local government pension schemes.

The Public Service Pensions Act 2013 (“The 2013 Act”) empowers the Secretary of State to make regulations providing for the issue of guidance to authorities on the scheme’s “administration and management” (section 3 and para 12 of Schedule 3). The Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016 (“The 2016 Regulations”), made pursuant to these provisions, require an authority to formulate an investment strategy. This must be in accordance with the guidance and must include the authority’s policy on “how social, environmental and corporate governance considerations are taken into account” in its investment decisions (reg. 7).

The Appellants challenged, inter alia, guidance issued in 2016 that where there is no material financial consequence attached to a decision, authorities “[s]hould not pursue policies that are contrary to UK foreign policy or UK defence policy”. By a majority, the Supreme Court held that this exceeded the statutory power. Giving the leading judgment, Lord Wilson said: “Power to direct HOW administrators should approach the making of investment decisions by reference to non-financial considerations does not include power to direct (in this case for entirely extraneous reasons) WHAT investments they should not make” [31].

Nevertheless, in a strong dissenting judgment Lady Arden and Lord Sales highlighted the artificiality of this distinction [84] and found the guidance to be within the wide discretion of the Secretary of State. In their view, the issue was “clearly one of policy as to what was in the public interest” and limited to boycotts which would undermine UK foreign and defence policy and which constitutionally were outside the competence of local government.

While the administrators of funds have a primary responsibility to their beneficiaries’ best financial interests, the question of what extraneous considerations are appropriate with respect to ESG remains fraught. This is a particular issue where public and private interests co-exist, as where the benefits for scheme members are guaranteed by statute and so are underwritten by the state. The Prime Minister noted in December that the Queen’s Speech included a Bill to stop public bodies from taking it upon themselves to boycott goods from other countries, in pursuit of their own pseudo foreign policy against countries. In all likelihood therefore we would expect now to see legislation precluding the apparent politicisation of local government, which was the subject of this appeal.

“(Le saum)on ne passe pas!”

In Pigot v Environment Agency [2020] EWHC 930 (Ch) the High Court had to consider in some depth the duties and the powers of the Environment Agency in relation to the creation and operation of fish passes pursuant to section 10 of the Salmon and Freshwater Fisheries Act 1975. For the uninitiated, the purpose and effect of a fish pass is to permit the safe passage of fish across an artificial barrier in a river such as a weir, sluice or dam. The contest in the case was ultimately between the interests of the salmon in the River Kennet at Padworth in Berkshire and those of an upstream proprietor, the potency of whose water-driven turbine was diminished by the opening of the fish pass at times of low flow.

S.10 gives the EA power to construct and maintain fish passes but only “so long as no injury is done to the milling power, or to the supply of water of or to any navigable river, canal or other inland navigation”. It was agreed that the turbine was a “mill”, which was defined as including any erection for the purpose of developing water power. Its owner sought declarations that the EA was liable in nuisance and/or breach of statutory duty for any injury he might suffer by the operation of the pass to the prejudice of his turbine. The EA relied upon the defence of statutory authority.

The deputy judge (Stephen Jourdan QC) delivered a 25-page long judgment which cannot be adequately summarised in this blog item. At its shortest, he held that the EA was prima facie liable in the tort of nuisance and unable to rely upon the defence of statutory authority to justify operation of the pass at times of low flow. The judgment contains a very careful analysis of the principles of that defence and in particular the distinction between the performance of a statutory duty and the exercise of a statutory power as the origin of the claimed authority. The only point on which the claimant failed was that the judge held that S.10 did not impose upon the EA any statutory duty to prevent injury to the claimant, there being no need or room for such an interpretation.

This area of law is turgid* and unsettled. It is also of wide and diffuse application, not least in other aspects of water law such as the activities of water and sewerage undertakers. There seems ample scope for a visit to the Court of Appeal to settle some important points.

Note: the transcript of the judgment in this case is not yet available on BAILII or other non-subscription services. It can be found on LexisNexis, Westlaw, Practical Law and Lawtel.

  • we like our aqueous metaphors

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