Environmental Law News Update

June 19, 2017

In this latest Environmental Law News Update, Charles Morgan and Laura Phillips consider the penalty imposed by OFWAT on Thames Water for its failure to meet targets on reducing water leakage, the latest VLO fine, this time imposed on Tesco, for water pollution and health and safety breaches, and the appointment of a new Environment Secretary to the government.


Thames Water fined £8.5m for water leaks

OFWAT has fined Thames Water Utilities Ltd. the maximum available penalty of £8.55m for its failure to meet the target imposed by OFWAT for reduction in leakage from its network of water mains. The leakage equated to 180 litres of water per day for every property supplied and amounted to 26% of the water in the system. The average daily water consumption of a household is about 160 litres. The cost of the fine will not be allowed to be reflected in future prices.

OFWAT has opened an investigation into the problem. One of the causes is certainly the age of a great deal of the system inherited by the water undertakers at privatisation in 1989.

A water undertaker is strictly liable (with certain exceptions) in respect of loss or damage caused by the escape of water from its pipes – s. 209 of the Water Industry Act 1991, described by Lord Hoffmann in Transco plc v Stockport MBC [2004] 2 AC 1 as a liability “far stricter than under the rule in Rylands v Fletcher”. However much of the leakage is continuous and low-level and merely wasteful rather than injurious.


Tesco fined £8 million for water pollution

Tesco Stores Limited has been fined a total of £8 million for water pollution and health and safety offences after it admitted to polluting the River Irwell with 23,000 litres of petrol that escaped from a petrol station in Haslingden, East Lancashire in July 2014. The incident resulted in homes being evacuated, residents becoming ill from petrol odours and the death of 46 fish. The fine divided between the respective offences – £5 million for the health and safety offence, £3 million for the environmental offence.

The investigation, which involved multiple agencies including the Environment Agency and Lancashire County Council, found that the incident resulted from Tesco’s failure to address a known issue with part of the fuel delivery system and an inadequate alarm system and was compounded by poor emergency procedures.

The EA’s press release can be found here


Michael Gove is the new Environment Secretary

Michael Gove has replaced Andrea Leadsom as Environment Secretary. The appointment of the former Justice Secretary has proved controversial with Caroline Lucas, the co-leader of the Green Party, calling him “entirely unfit” for the role: he has generally voted against measures to prevent climate change (see a link to his record here) and in a previous role as Education Secretary proposed its removal from the geography national curriculum. He has recently called for the removal of European environmental regulations such as the Habitats Directive (see a news article which appeared in The Independent here). He has asserted that the directive “massively increases the cost and the regulatory burden for housing development” based on his experience in his Surrey Heath constituency.

Mr Gove will face considerable challenges, including overseeing environmental legislation and farming following Brexit and the ‘Great Repeal Bill’, and tackling air pollution.


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