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Title: Case Study:
Roger Daniels owns and operates a small tannery business called Rawhide Tannery which he inherited from his father in 2004. Rawhide Tannery operates from premises on the outskirts of Langdon, a small village. The tannery business employs about 20 employees and prepares about 100 hides per week for specialised use in the manufacture of designer handbags.
The tanning process involves many different stages and several different toxic chemicals. The chemicals are stored in huge vats and each week there is a delivery of the constituent chemicals. They are delivered in 40 gallon tanks which are then poured into larger chemical storage vats. The tanning process requires a “cocktail” of the chemicals to be siphoned from the storage tanks to tanning preservation tanks via metal pipes.. The hides are then dragged through the chemicals contained in the tanning preservation tanks. The exact constituency of the chemicals depends upon the type and colour of leather produced. Detailed records of each tanning batch and the chemicals used should be recorded in a log book.
The chemical storage vats are located in the tanning yard at the rear of the premises which backs straight onto a river. The manufacturers of the handbags demand delivery of the hides on time and excellent quality leather. Rawhide Tannery received an order for 200 hides to be ready for delivery no later then 20th September, 2006.
The week before, the tannery was running behind schedule and Roger Daniels instructed his employees to work overtime. The usual cocktail of chemicals was mixed and placed in the tanning preservation tanks. However, while siphoning some perchloroethene (PCE) from one tank the metal pipe began to leak. The hole in the pipe let out a very steady drip of PCE. An employee notified Roger Daniels who decided to ignore the leak and instructed his employees to carry on working. Two days later Roger called an engineer to repair the leak but they could not attend until Monday am, by which time 5 days had elapsed.
About a month later Rawhide Tannery was ed by the Environment Agency who had been alerted to a serious pollution incident on the river. They had traced the source of the chemical leak back to the tannery premises. During a site visit, an Environment Agency enforcement officer asked to examine the environmental records. It transpired that these were extremely out-of-date and contained many inaccuracies. Roger Daniels became very angry at the constant questioning and ordered the officer to leave the premises.
The Environment Agency also requested the details of waste management records. Rawhide Tannery possesses no waste management licence. Any waste chemicals are stored in the corner of the site in large tanks pending disposal. There are no protective barriers around the waste storage tanks and the business has been using a local company, Easi-Waste Ltd, to remove the waste as they offered the cheapest prices.
During October 2006, Roger received a letter from a firm of solicitors representing Deverill Trout Farm who are situated 2 miles down the river. The letter alleged that, as a result of the incident, Deverill Trout Farm sustained serious losses from the pollution of their trout ponds. They are seeking to recover damages in the region of £60,000.
Discuss the potential liability of Roger Daniels and the Rawhide Tannery. The word limit is 3,000 words. Footnotes and bibliography are essential.
This brief analyses a pollution incident which occurred in September 2006 when an amount of the chemical perchloroethene (PCE) escaped from a hole in a pipe leading between tanks on the premises of Rawhide Tannery and contaminated a nearby river. The potential liability (both criminal and civil) of both the Rawhide Tannery and Roger Daniels, the owner and operator of the undertaking, is discussed with particular reference to possible Environment Agency action and a pending claim by Deverill Trout Farm, which is seeking to recover damages of around £60,000 for losses allegedly suffered as a consequence of the pollution. Both statutory and common law perspectives are considered below.
The key legislation on water pollution
It should at the outset be noted that the Environment Agency is the environmental regulator for water in England and Wales and it is responsible for the maintenance and improvement of the quality of all the fresh, marine, surface and underground water under its jurisdiction including the river in question in this case. The objective of the Agency is to prevent or at least minimise the risk of water pollution wherever possible and to endeavour to ensure that pollution or contamination which might affect ecosystems or human beings is cleaned up.
Under section 85 of the Water Resources Act 1991 it is an offence to cause or knowingly permit poisonous, noxious or polluting matter or any solid waste matter to enter controlled waters. Under Part IIa of the Environmental Protection Act 1990 “controlled waters” are defined as: “territorial waters which extend seawards for three miles, coastal waters, inland freshwaters, that is to say, the waters in any relevant lake or pond or of so much of any relevant river or watercourse as is above the freshwater limit, and ground waters, that is to say, any waters contained in underground strata”. Therefore the river in question in our case is included and it is submitted that the offence made out in section 85 of the 1991 Act is precisely what has occurred in the present case. It is noted that while siphoning perchloroethene (PCE) from a tank the connecting metal pipe began to leak. The hole in the pipe let out a very steady drip of PCE. It is highly significant that an employee notified Roger Daniels who decided to ignore the leak and instructed his employees to carry on working, because this proves that Daniels actually “knowingly permitted” the pollution to take place, which is more serious than merely inadvertently “causing” the offence.. It is also highly significant that Daniels acquiesced for some two days before even calling an engineer to repair the leak, and it is noted that the engineer did not attend until some 5 days had elapsed since the beginning of the pollution.. This reckless laxity is likely to viewed extremely darkly by the courts.
On conviction a fine of up to £20,000 may be imposed if the matter proceeds on a summary basis. If the incident is deemed particularly serious it may be prosecuted on indictment.. Although there are certainly aggravating factors in the scenario and the toxic contamination is referred to as “serious” in the brief further information as to the full extent and nature of the pollution is requested to facilitate a determination as to whether it is viewed serious enough to be prosecuted on indictment.. If it is viewed serious enough to proceed on indictment then Daniels may face up to two years imprisonment and Rawhide Tannery may face an unlimited fine.
There was a defence available to Daniels and the Tannery under section 89(1), which provides that:
“A person shall not be guilty of an offence under section 85 above in respect of the entry of any matter into any waters or any discharge if—
(b) that person takes all such steps as are reasonably practicable in the circumstances for minimising the extent of the entry or discharge and of its polluting effects; and
(c) particulars of the entry or discharge are furnished to the Authority as soon as reasonably practicable after the entry occurs.”
However, it is submitted that neither Daniels nor the Tannery will be able to avail themselves of this provision. The reasonably practicable response to take would have been to immediately shut down the leaking pipe. On discovery of the leak this was not done, indeed Daniels delayed for some two days even before bothering to an engineer, and serious toxic contamination resulted.
Under section 157 of the Water Industry Act 1991 water undertakers or companies and the Environment Agency are delegated the authority to make byelaws concerning any waterway owned or managed by them. It is likely that byelaws cover the river in question in the brief. Such byelaws may address inter alia, the preservation of order on the waterway and the prevention of damage to the waterway and the land abutting the waterway and anything on or in the waterway. It may well be therefore that Daniels and the Tannery have also infringed local byelaws in knowingly permitting the contamination of the river by toxic chemicals, but further information is requested as to the form and extent of any applicable byelaws before concrete advice can be offered in this regard.
There is also a strong possibility that Daniels and the Tannery are also in contravention of the Groundwater Regulations 1998, which implemented the EC Groundwater Directive 80/68/EEC, and which is aimed at measures relating to the prevention, reduction and elimination of pollution of water.
In addition, Daniels aggressive attitude to the Environment Agency’s investigating enforcement officer is likely to have been highly foolish. Under section 17(3)(c) of the Environmental Protection Act 1990 the inspector is entitled to:
“make such examination and investigation as may in any circumstances be necessary..”
It is noted that Daniels became angry at his questioning and ordered the officer to leave the premises. Under section 17(3)(d) of the 1990 Act the inspector should have been left undisturbed on the premises for as long as was necessary for him to carry out his investigation. Under section 17(3)(i) the inspector was entitled to ask any questions he desired of Daniels and under section 17(3)(j) the inspector was entitled to examine the environmental records of the company. Daniels was thus not entitled to take an obstructive line and this behaviour will serve only to exacerbate his ultimate criminal responsibility as a consequence of this incident.
The Law of Tort: Rylands v Fletcher
It is clear that Daniels and the Tannery have brought onto their premises dangerous chemicals and that they have allowed them to escape causing damage to others, in particular the Deverill Trout Farm. It is advised that this situation is covered by the law of tort. The rule in the celebrated case of Rylands v Fletcher (1868) provides as follows, as stated by Blackburn J:
“…the true rule of law is, that the person who for his own purposes brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and, if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape.”
This statement, which is known as the ‘rule in Rylands v Fletcher’ was approved by the House of Lords. The rule can be said to establish a form of strict liability in tort. Lord Cairns added that the defendant’s use of land must be “non-natural” in the House of Lords and in subsequent cases the specification that non-natural use must be involved became established as part of the rule.
In point of fact it is advised that the case under analysis is remarkably similar to further litigation which developed the rule in Rylands v Fletcher and the law of nuisance.. In Cambridge Water Co v Eastern Counties Leather plc (1994)
a water company claimed damages against a tannery which had allowed the solvent perchloroethane to percolate into an aquifer and this had the effect of rendering the water unusable for the purposes of public supply. The solvent was used for de-greasing pelts at the tannery, which was situated some 1.3 miles from the borehole which subsequently became contaminated. On occasion the solvent spilt onto the concrete floor of the defendant’s premises and unknown to the plaintiffs the solvent seeped into the ground below the tannery and was conveyed to the borehole.
At first instance it was held that the damage caused was not foreseeable by Eastern Counties Leather and claims based on nuisance and negligence were disallowed. Moreover, it was held that the actions of Eastern Counties Leather could constitute a ‘natural use of the land’ and therefore also rejected the claim based on the rule in Rylands v. Fletcher. It was significant perhaps that the tannery had been in existence at the site since 1879. Furthermore, the tannery was located in an industrial village. It was deemed that the creation of employment by the defendants was clearly something of benefit to the community in general. Therefore storage of chemicals on the land was therefore deemed to be a natural use of the land.
The Court of Appeal held the defendant’s liable in nuisance on the grounds that liability was strict where the nuisance consisted of an interference with a natural right incidental to the plaintiff’s ownership of the land (namely the right of the plaintiff to extract percolating water). Eastern Counties Leather plc thereafter appealed to the House of Lords.
The House of Lords found unanimously that Eastern Counties Leather was not liable for the water contamination at issue. The main point was whether the foreseeability of the damage suffered by Cambridge Water Co. was relevant to a claim under the rule in Rylands v. Fletcher. It is submitted that it is an essential element in an action to recover damages in the tort of nuisance and under the rule in Rylands v Fletcher that harm of the relevant type is foreseeable by the defendant..
Lord Goff, with whom their Lordships agreed, found that the general tone of Blackburn J’s judgment in Rylands v Fletcher was that knowledge or at least foreseeability of the risk, is a prerequisite of the recovery of damages on the basis of the rule, although the rule is one of strict liability in the terms that the defendant may be held liable notwithstanding that he has exercised all due care to prevent the escape of the noxious substance from taking place.
The Lords endorsed the finding at first instance that a reasonable supervisor under the employ of Eastern Counties Leather could not have foreseen that the solvent would leak down through the tannery floors into the water source. At the time it was thought that any solvent split would quickly evaporate and that the only foreseeable risk was that if large quantities were spilt, someone might be affected by the fumes..
It was therefore held that since contamination of the plaintiff’s water supply was not foreseeable at the time that the spillages of solvent took place the defendants should not be found liable. As Wilkinson has commented that there is a difference between the statement that a defendant is responsible only for damage caused by foreseeable escapes and the statement that a defendant is liable only for foreseeable damage but that the escape should be assumed (whether it is deemed foreseeable or not).
It is submitted that Cambridge Water Co endorses the first of these two statements. Lord Goff specified, after all, that the seepage of the toxic solvent was not foreseeable.. However, Wilkinson argued that the second statement actually constitutes the appropriate test in light of Blackburn J’s judgment given that once the foreseeability of the escape is recognised (as opposed to the foreseeability of the damage alone), it is hard to argue that “the keeper of a dangerous thing can realistically be said to do so at his peril”.
However, in summary on Cambridge Water Co the House or Lords found the Eastern Counties tannery not liable, basing their decision on the need for foreseeability of consequences and not on the concept of natural user. In point of fact Lord Goff held that the storage of toxic chemicals in substantial quantities on industrial land: “…should be regarded as an almost classic case of non-natural use.” The fact that the tannery provided employment did not per se establish a natural use for the land. It can be advised therefore that the requirement for an element of foreseeability has now been built into the rule in Rylands v Fletcher and it was because Eastern Counties had not foreseen the consequences of the spillage they were not liable.
It can be concluded, as Murphy indicates, that strict liability for the escape from land of dangerous substances only arises in modern law if they defendant knew or should objectively have known that the substance might on escape cause damage.
It is submitted that the facts of Cambridge Water Co v Eastern Counties Leather plc differ from those of the present case in some material respects. In Cambridge Water Co the escape was accidental. This is not the case in the present brief. Daniels was well aware of the leak given that he had been notified of it by an employee and he had taken the conscious decision to ignore the leak, presumably given business pressure to complete an order. It was a further two days before Daniels even ed an engineer to arrange for him to attend the tannery to fix the pipe and during that time the leak continued unabated. It was a further 3 days before the leaked was fixed, by which time it is assumed that a substantial quantity of the toxic chemical had escaped.
Moreover on the facts presented in the current brief, the means of conveyance of the contaminant is very obvious and straightforward in comparison to the invisible, unknown and unforeseeable underground conveyance of the contaminant solvent in Cambridge Water Co. In the present case it is noted that the chemical storage vats of Rawhide Tannery are located “in the tanning yard at the rear of the premises which backs straight onto a river”. Daniels has ignored a “a very steady drip of PCE” for a period of days in these circumstances.. It is submitted that it was not just foreseeable but arguably inevitable that the toxic contaminant would enter the river on the facts of the case. Therefore the present case and Cambridge Water Co v Eastern Counties Leather plc can be clearly distinguished on the point of foreseeability.
It is advised that Daniels and Rawhide Tannery would be found liable to Deverill Trout Farm who are situated 2 miles down the river for losses sustained due to the pollution of their trout ponds by the PCE solvent which escaped from the tannery. It is advised that there is strong foreseeability and an unbroken chain of causation on the facts of the case. It is noted that the trout farm seeks to recover damages in the region of £60,000. Further particulars are requested as to whether this is a reasonable sum, but it is advised that the tannery will be held liable in principle.
An action in Negligence
Indeed, given the attitude displayed by Daniels and his acquiescence in the face of the steady leak of toxic chemical in the immediate proximity of the river it is argued that the law of negligence itself might derive an action. Negligence demands that a legally recognised duty of care is established, (under the neighbour principle see Donoghue v Stephenson), that breach of that duty of care actually causes damage (see Barnett v Chelsea and Kensington Hospital Management Committee (1969)) and that it is not too remote (The Wagon Mound No.1 (1967)). The latter case confirms that only damage which is a reasonably foreseeable consequence of a breach of duty can be recovered under the law of negligence.
In Donoghue v Stephenson Lord Atkins defined the scope of the duty of care in negligence as follows:
“You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law, is my neighbour? The answer seems to be persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being affected when I am directing my mind to the acts or omissions which are called in question.”
It is submitted that the Trout Farm would be considered a legal neighbour of Rawhide Tannery given that it is obvious that an act or omission at the tannery involving the toxic chemical could clearly affect the Farm which is located just two miles downstream of the tannery on the river. It is clear that the duty of care has been breached by Daniels in his failure to act to cease production immediately and deal with the leak forthwith.. Damage in these circumstances seems inevitable and causation is again a relatively straightforward matter on the facts.
As for the foreseeability and remoteness question posed by Wagon Mound it is advised that it is manifest that if large quantities of a highly toxic chemical are allowed to flow into a river, users downstream will be negatively affected, in particular such users as a fish farm, which relies on good quality water.
The principle lines of the above analysis on nuisance and negligence were confirmed in the recent House of Lords case Transco plc v Stockport Metropolitan BC (2003)
as discussed in Rylands v Fletcher Restated. It is true that as Murdoch has explained only in rare cases will claims of this ilk be successful under the modern law, however, on the facts presented it is concluded that Daniels and Rawhide Tannery are liable to compensate the Trout Farm for its loss.
A Summary of the Advice on Liability
It is submitted that Roger Daniels is legally culpable for the pollution incident under analysis and that Rawhide Tannery is likewise liable directly and vicariously for the toxic contamination of the river. Criminal liability under statute has been verified on various grounds and prosecution is likely to be successful on the facts. Civil liability to the Trout Farm is also likely to be established under nuisance and the rule in Rylands v Fletcher and in negligence. This may lead to claims from other nearby river users.
EXACT WORD COUNT FOR TEXT OF ANSWER : 3069 (excluding footnotes)
GLOBAL DOCUMENT WORD COUNT : 3797
Water Resources Act 1991 (c.57): http://www.opsi.gov.uk/acts/acts1991/Ukpga_19910057_en_1.htm#tcon
Environmental Protection Act 1990 (c.43):
Water Industry Act 1991 (c.56)
Groundwater Regulations 1998 No. 2746
Hodgson and Lewthwaite, Tort Law, Oxford: Oxford University Press, (2004)
Jones, M.A., Textbook on Torts, London: Blackstone Press (1996)
Rogers, W.. V. H., Winfield & Jolowicz on Tort, London: Sweet and Maxwell, (2006)
McIntosh M., Rylands v Fletcher Restated, Solicitors Journal, 12 December 2003 p.1413..
Murdoch J.., Exceptionally Dangerous, Estates Gazette, 10 January 2004, p91.
Murphy, The Merits of Rylands v Fletcher, Oxford Journal of Legal Studies (2004) 24: 643-669.
Tylor T. H., The Restriction of Strict Liability, The Modern Law Review, Vol. 10, No. 4 (Oct., 1947), pp. 396-402.
Wilkinson, Cambridge Water Co v Eastern Counties Leather plc: Liability for Continuing Escapes (1994) 57 MLR 799.
Cases as footnoted, drawn from original law reports.
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