Environmental Law News Update
July 3, 2024
Manchester Ship Canal Company Ltd v United Utilities Ltd (No.2) [2024] UKSC 22
This claim arose out of the highly topical problem of what remedies can be utilised by those affected by discharges of untreated sewage from combined sewer overflows into rivers and lakes around the country.
The Manchester Ship Canal Company Ltd (MSCCL) sought to bring a claim in nuisance or trespass against United Utilities (UU) arising from discharges of untreated sewage from the sewage network whenever the network is overloaded. The Supreme Court unanimously allowed the MSCCL’s appeal. Therefore, the MSCCL is not prevented from bringing such a claim in nuisance or trespass even if there has been no negligence or deliberate misconduct.
Today Stephen Hockman KC, Charles Morgan and Nicholas Ostrowski host a webinar on the implications of this case on nuisance claims. Click here to sign up to the webinar.
It took around one year for the Supreme Court to release its ruling in this case, but it appears it was worth the wait as it represents a significant change to environmental decision-making and protection (albeit perhaps limited to industries like oil and gas).
The developer applied to Surrey County Council for planning permission to expand oil production from a well site at Horse Hill in Surrey and argued that the scope of the Environmental Impact Assessment (‘EIA’) should be confined to the direct releases of greenhouse gases from within the well site boundary during the lifetime of the project. Therefore, excluding from the EIA an assessment of greenhouse gas emissions that occur when the oil extracted was burnt elsewhere as fuel. The council accepted this approach, as did the High Court and Court of Appeal.
The Supreme Court, by a 3:2 majority, allowed the appeal, and made the following interesting points:
- regarding causation, there is no uncertainty in this case, the extraction of oil would initiate a causal chain leading to the combustion of the oil and release of greenhouse gases.
- EIA Directive does not impose any geographical limits, the impact on the climate does not depend on where the greenhouse gases are released.
- refining crude oil does not alter its basic nature or intended use and cannot be regarded as breaking the causal connection between the extraction and subsequent combustion. Oil was distinguished from other products – the court held that raw materials such as steel can be put to many possible uses and it might be reasonable to take the view that no meaningful assessment or estimate can be made of what emissions will ultimately result from its use (e.g. in its use in motor vehicles or aircraft). Oil, on the other hand, does not change into a different type of object and a reasonable estimate can be made of the emissions that will occur when burnt.
- UK’s national policy of encouraging domestic production of oil and gas does not dispense with the requirement to assess the environmental impact of the project.
In summary, new projects must consider the emissions from their facilities (scope 1), energy consumption (scope 2), and emissions (scope 3) from downstream users that burn the oil. Lord Sales in his dissenting judgment at [332] referred to the worthy cause of combating climate change and that the EIA Directive should not be given an artificially wide interpretation to bring all downstream and scope 3 emissions within its ambit. Indeed, the majority in the Supreme Court may have prioritised taking action to tackle climate change over the practical limits of what a developer can assess.
CG Fry & Son Ltd v Secretary of State for Levelling Up, Housing and Communities [2024] EWCA Civ 730
The Court of Appeal handed down judgment in this nutrient neutrality case last week. The appeal was expected, because of the puzzling nature of the decision in question.
In December 2015, Somerset Council granted outline planning permission for mixed use development, of 650 homes, plus community and commercial uses, a primary school and infrastructure. It was subject to conditions and to be completed in phases. In June 2020, the Claimant obtained reserved matters for approval, for “Phase 3”, namely 190 homes, subject to a number of conditions.
In August 2020, Natural England published the ‘nutrient neutrality’ Advice Note, advising local authorities that “greater scrutiny was required of plans and projects that will result in increased nutrient loads” in Special Protection Areas (“SPAs”), Special Areas of Conservation (“SACs”), and sites designated under the Ramsar Convention. Natural England advised that competent authorities (including Councils) should undertake an appropriate assessment under the Habitats Regulations 2017 of the implications of a plan or project, and only grant consent to the extent that the assessment allows the competent authorities to ascertain the development “will not have an adverse effect on the integrity of the site”. That is, the Advice Note said developments need to achieve nutrient neutrality.
In June 2021 the Claimant sought discharge of a number of the conditions of the reserved matters approval. The Council withheld approval on the basis of a missing appropriate assessment under Habitats Regulations 2017. The Claimant appealed.
Under the Habitats Regulations, regulation 63 is that a competent authority “must make an appropriate assessment of the implications of the plan or project for that site in view of that site’s conservation objectives.” Regulation 70, however, makes clear that the assessment applies to “the granting of planning permission”. In the Court of Appeal in R (Fulford Parish Council) v City of York Council [2019] EWCA Civ 2109, Lewison LJ had held that the grant of approval of reserved matters (as in this case) is not a planning permission (at paragraph 22). “On its face”, said the High Court therefore, regulation 70 therefore excluded the requirement of regulation 63 for this case. But the High Court found that a purposive interpretation of the legislation was required, and the application of the precautionary principle meant that a habitats assessment was required.
The Court of Appeal dismissed the appeal, holding regulations 63 and 70 “must” be read together (at paragraph [80]), that the precautionary principle did apply, and that “where an appropriate assessment is required before an “implementing decision” is made, the assessment must be of the whole development whose implementation is authorised by that decision” (at paragraph [101]). As for the purposive approach, the Court said (at paragraph [68]) that “the correct approach is that legislation must be construed having regard to context and in the light of its purpose.”
