Cambridge Water Co Ltd v Eastern Counties Leather plc (1993)

Rylands v Fletcher is taught as the classic rule of strict liability: the person who brings something dangerous onto his land keeps it "at his peril". Cambridge Water is the case in which the House of Lords asked what "strict" actually means — and answered that it does not mean liability for damage nobody could have foreseen.

Two lessons come out of one speech. First, foreseeability of damage of the relevant type is a prerequisite of liability in damages under the rule, just as it is in private nuisance. Second, the storage of substantial quantities of chemicals on industrial premises is "an almost classic case of non-natural use" — so the defendant lost on natural use but still won on foreseeability. The rule remains strict in one sense only: reasonable care in preventing the escape is no defence.

Lord Goff also explained why the courts should not turn the rule into a general theory of liability for ultra-hazardous activities: that job, he said, is better done by Parliament.

Eastern Counties Leather (ECL) had run a tannery at Sawston since 1879. In degreasing pelts it used a chlorinated solvent, perchloroethene (PCE), between 50,000 and 100,000 litres a year. Until 1976 the solvent came in drums tipped into the machines by hand, and during this topping-up there were regular spillages of small amounts onto the concrete floor. At least some 3,200 litres entered the ground.

The spilled PCE seeped down through the chalk aquifer to a depth of about 50 metres, formed pools, and dissolved slowly into the groundwater, which carried it towards Cambridge Water Company's (CWC) borehole at Sawston Mill, about 1.3 miles away. CWC had bought the borehole in 1976 and put it into public supply in 1979.

Regulations implementing an EEC Directive on drinking water meant that from 1985 water containing more than 1 µg/l of PCE was not "wholesome". In 1983 PCE was found in the water, and the borehole was taken out of commission. CWC developed a new source elsewhere and sued ECL in negligence, nuisance and under the rule in Rylands v Fletcher.

The trial judge's findings of fact were decisive. A reasonable supervisor at ECL could not have foreseen, in or before 1976, that the repeated small spillages would lead to "any environmental hazard or damage". The only foreseeable harm from a spillage was that somebody might be overcome by fumes. The water at Sawston Mill has never been held to be dangerous to health.

In the courts below. Ian Kennedy J dismissed all three claims: negligence and nuisance for want of foreseeability, and Rylands v Fletcher because he held the storage and use of PCE to be a natural use of land in an industrial village. CWC appealed only on Rylands v Fletcher. The Court of Appeal held ECL strictly liable on the authority of Ballard v Tomlinson (1885) and awarded damages of £1,064,886 plus interest. ECL appealed to the House of Lords.

1. Did Ballard v Tomlinson establish a separate rule of strict liability for interference with the right to extract percolating water?
2. Is foreseeability of damage of the relevant type a prerequisite of liability in damages in private nuisance and under the rule in Rylands v Fletcher?
3. Could ECL be liable for the continuing escape of PCE after the risk had become known?
4. Was the storage and use of PCE at the tannery a natural use of land?

The appeal was allowed and the order of the trial judge dismissing the claim was restored. Lord Templeman, Lord Jauncey, Lord Lowry and Lord Woolf agreed with Lord Goff.

Ballard v Tomlinson created no separate rule

Lord Goff read Ballard v Tomlinson as deciding no more than that the defendant there was liable either under Rylands v Fletcher or in nuisance; the question of unforeseeable damage "did not arise". He said the case "does not give rise to any principle of law independent of the ordinary law of nuisance or the rule in Rylands v. Fletcher". Since CWC had abandoned nuisance, it could succeed only under the rule.

Foreseeability in nuisance

Liability in nuisance is strict in that reasonable care is no answer; its control mechanism is the principle of reasonable user. But it "by no means follows that the defendant should be held liable for damage of a type which he could not reasonably foresee". Relying on Lord Reid's advice in The Wagon Mound (No. 2), Lord Goff accepted that "foreseeability of harm is indeed a prerequisite of the recovery of damages in private nuisance, as in the case of public nuisance."

Foreseeability under Rylands v Fletcher

Lord Goff went back to Blackburn J's statement of the rule — "anything likely to do mischief if it escapes" — and read it as requiring knowledge or foreseeability of the risk. The general tenor of that statement is "that knowledge, or at least foreseeability of the risk, is a prerequisite of the recovery of damages under the principle; but that the principle is one of strict liability in the sense that the defendant may be held liable notwithstanding that he has exercised all due care to prevent the escape from occurring."

He relied on Professor Newark's view that the rule was essentially an extension of the law of nuisance to isolated escapes. Since damages in private nuisance depend on foreseeability, "it would appear logical to extend the same requirement to liability under the rule in Rylands v. Fletcher."

He then held: "foreseeability of damage of the relevant type should be regarded as a prerequisite of liability in damages under the rule." The earlier cases pressed by CWC — West v Bristol Tramways and Rainham Chemical Works — gave "a very fragile base" for any contrary conclusion.

No general rule for ultra-hazardous activities

Lord Goff saw "serious obstacles" in developing the rule into a general principle of strict liability for ultra-hazardous operations, chiefly Read v J Lyons & Co [1947] AC 156, which requires an escape from land under the defendant's control. He added: "as a general rule, it is more appropriate for strict liability in respect of operations of high risk to be imposed by Parliament, than by the courts."

On environmental pollution in particular, given the legislation being put in place, "there is less need for the courts to develop a common law principle to achieve the same end".

Application to the facts

Nobody at ECL "could reasonably have foreseen the resultant damage which occurred at CWC's borehole at Sawston." The claim therefore failed: "since those responsible at ECL could not at the relevant time reasonably have foreseen that the damage in question might occur, the claim of CWC for damages under the rule in Rylands v. Fletcher must fail."

The continuing escape

It was argued that once the danger of PCE became known, ECL should be liable for later escapes. Lord Goff rejected this. The PCE "has passed beyond the control of ECL", and when ECL created the conditions it could not possibly have foreseen the damage. ECL should be under no greater liability than that imposed for negligence. He also called this a case of historic pollution, for which statute does not impose liability, and said it would be strange if the common law did.

Natural use — CWC would have won this point

Lord Goff disagreed with the trial judge. The creation of employment in an industrial village does not by itself make a use natural. He said "the storage of substantial quantities of chemicals on industrial premises should be regarded as an almost classic case of non-natural use". He would not have exempted ECL on that ground. The appeal succeeded only because the damage was unforeseeable.

Under the rule in Rylands v Fletcher, as in private nuisance, a defendant is liable in damages only for damage of a type which was reasonably foreseeable when the thing was brought onto or kept on his land. The liability is still "strict" in the sense that reasonable care to prevent the escape is no defence. Where the damage was not foreseeable at the relevant time, the claim fails even though the use of land was non-natural.

• Direct question: Explain the rule in Rylands v Fletcher and the exceptions to it. Is liability under the rule truly strict? State Blackburn J's rule, then use Cambridge Water to show that liability is strict only in that care is no defence; foreseeability of the type of damage is still required.
• Problem question: a factory's chemical leaks and damages a neighbour's water supply in a way no one then could have foreseen. Non-natural use can be established (chemicals in bulk are "an almost classic case"), but the claim for damages fails for want of foreseeability.
• Natural use: quote Lord Moulton's test from Rickards v Lothian and Lord Goff's refusal to treat employment for the local community as enough to make an industrial use natural.
• Nuisance link: use the case to show that the rule is treated as an extension of nuisance to isolated escapes, and that The Wagon Mound (No. 2) makes foreseeability a requirement in nuisance too.
• Remember the court: this is an English House of Lords decision. In an Indian answer, present it as the English position and contrast it with the Indian cases on strict and absolute liability in this unit.