Oil Spills: Liability (Part 1) – Rylands v Fletcher & “Polluter Pays” Principle

Oil Spills, especially heating oil spills can be pretty nasty. It is bad when the escape of oil happens at your own property, but it can be a lot worse when it originates at a third party property and then comes across the boundary. We look at the Rylands v Fletcher argument from 1868 and also the Polluter Pays principle from European Law.

There is very little legal precedent in the UK and Ireland on liability for escape of oil that has come from an off-site source. For the sake of discussion, let us consider a residential setting, where a neighbouring property has a leak. This could instance could be at the valve at the base of the tank and subsequent to a fill of oil, the oil slowly trickles from the tank, wreaking havoc to the ground beneath and the neighbouring property.

In this part we look at two possible arguments, and later we will look at some others.

Rylands v Fletcher

The common law precedent of Rylands v Fletcher [1868] UKHL 1 is usually cited in instances like this.

In 1860, Rylands paid contractors to build a reservoir on his land, intending that it should supply the Ainsworth Mill with water. Rylands played no active role in the construction, instead contracting out to a competent engineer. While building it, the contractors discovered a series of old coal shafts and passages under the land filled loosely with soil and debris, which joined up with Thomas Fletcher’s adjoining mine. Rather than blocking these shafts up, the contractors left them. On 11 December 1860, shortly after being filled for the first time, Rylands’ reservoir burst and flooded Fletcher’s mine, the Red House Colliery, causing £937 worth of damage. Fletcher pumped the water out, but on 17 April 1861 his pump burst, and the mine again began to flood. At this point a mines inspector was brought in, and the sunken coal shafts were discovered. Fletcher brought a claim against Rylands and the landowner, Jehu Horrocks, on 4 November 1861. Rylands and Fletcher eventually had the argument settled in the House of Lords on 17th July 1868.

Rylands v Fletcher Diagram

The basis of the Rylands v Fletcher argument is that a person storing something (kerosene/oil in this instance) on their land which is unnatural and then that substance escapes then the person is Strictly Liable. If for instance that substance is kerosene and it escapes and contaminates a third party property then the polluter is “Strictly Liable”.

Strict Liability in these circumstances means that it matters not what gave rise to the escape of oil happening at all, the polluter is always liable. There is no need to prove fault.

The problem with this argument is that for many years now people have been storing kerosene on their properties for the purposes of heating their homes. It is therefore arguable that there is nothing unusual in this and that the principles of Rylands v Fletcher do not apply.

This principle in relation to escapes of oil or other oil pollution however has never been tested in court and no legal precedent therefore exists.

“Polluter Pays” Principle

The ‘polluters pays’ principle is the commonly accepted practice that those who produce pollution should bear the costs of managing it to prevent damage to human health or the environment. For instance, a factory that produces a potentially poisonous substance as a byproduct of its activities is usually held responsible for its safe disposal.

This principle underpins most of the regulation of pollution affecting land, water and air. Pollution is defined in as contamination of the land, water or air by harmful or potentially harmful substances.

Pollution along boundary with a neighbouring property

The Environmental Liability Directive (2004/35/EC) of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage (ELD) establishes a framework based on the polluter pays principle to prevent and remedy environmental damage. The polluter pays-principle is set out in the Treaty on the Functioning of the European Union (Article 191(2) TFEU).

The Directive defines “environmental damage” as:

(a) damage to protected species and natural habitats

(b) water damage, which is any damage that significantly adversely the waters concerned;

(c) land damage, which is any land contamination in, on or under it that creates a significant risk to human health;

On 16 December 2008 the European Communities (Environmental Liability) Regulations 2008 were finally published and come into effect on 1 April 2009. These regulations transpose the majority of the Environmental Liability Directive. There is also currently a Draft Environmental Liability Bill 2008 (the Bill) which provides for the transposition of the remaining, discretionary, provisions contained in the Directive.

In Part II of this post, we will look at liability as a result of trespass & nuisance.

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