The legal challenges water companies face over flooding

Extreme weather is hitting the UK with greater frequency, bringing in its wake floods, and legal attempts by householders and insurers to hold water companies responsible. By Noel Walsh.

The eminent economist Dieter Helm has, in his paper entitled Flood Defence: Time for Radical Rethink, encouraged water companies to give further consideration to their responsibility in flood prevention and the devastating impact of floods on individuals and communities. In Calderdale questions were also raised as to whether Yorkshire Water could play a bigger role through the management and control of reservoir levels. As a result, it is one of several bodies giving evidence before the local flood commission.

The issue as to a water company’s role and responsibilities in the management of water levels within its reservoirs has faced legal challenge. Property owners whose premises were located downstream of a reservoir sought compensation for extensive flood damage on the grounds that water had escaped or been released from the reservoir, thus endangering their property.

The level within the reservoir had risen to such a degree that a large volume of water overtopped the dam, which led to flooding of adjacent water courses. The property owners sought to rely on the legal principle in the landmark House of Lords ruling in Rylands v Fletcher, which imposes an absolute duty on a person who lawfully brings on his land something which though harmless while it remains there, will naturally cause damage if it escapes.

The claims were abandoned against the water company when it was proved that the reservoir, which was well over 100 years old, was designed to allow water to flow over the dam crest, had been properly maintained, and that all controlled releases of water into the catchment came under the control of the Environmental Agency. Further to that, the overtopping had occurred following a truly exceptional localised storm.

The Environmental Agency also faced legal challenge in that the historic model it used to regulate water levels within the reservoir and its catchment was based on outdated historic data of seasonal anticipated rainfall and river levels. It was argued that the model should have been reviewed earlier on the back of data from the Met Office pointing to a significant increase in rainfall events over the past 50 years.

The foulest flooding of all is that suffered by householders when, at times of significant rainfall, raw sewage surcharges from manholes over gardens or into lounges and kitchens via downstairs toilets. It is accepted case law following the House of Lords decision in Marcic v Thames Water that water companies cannot be held liable in nuisance for capacity issues when the sewer system simply cannot cope with volumes of water following a flash storm or prolonged period of excessive rainfall.

Nevertheless, householders and their insurers facing costly claims seek to challenge this position. This is particularly so where the water company is already on notice of the risk following one or more previously reported events. It is argued that the water company is under a duty to do more to alleviate the known risk by undertaking regular monitoring, cleaning of their sewer or addressing underlining capacity issues. The recent Met Office data on the frequency of rainfall events reflects fears of further global warming, with recorded global temperatures increasing during 2015/16. In turn, this further weakens such arguments that sewer systems are built to accommodate a “one in 30-year event”.

The reality is that water companies do take action and seek to address flooding risks to individual as well as groups of properties. They commonly meet the cost of flood defences or the fitting of equipment such as non-return valves. However, even here there are liability risks. By taking action the water company accepts the further challenge to maintain the defences they have installed. This may include six-monthly visits to customers to inspect non-return valves to ensure they are working correctly. All of which places a further burden on their already stretched resources and budgets.

Some may choose to blame water companies as the immediate cause of flooding to their properties and seek to hold them responsible to pay compensation. However, this completely overlooks the roles and responsibilities of all bodies who may have an influence, also weather events over which they have none.

Effective flood management is multi­faceted involving local authorities, the Environment Agency and the responsible actions of property developers and farmers in their use of land and agricultural practices. However, water companies will continue to face legal challenge on the basis that they could and should have done more, particularly if the reported frequency of significant rainfall events challenges old perceptions and outdated models.

Noel Walsh, partner – utilities practice group, Weightmans LLP