There used to be no way to recover compensation from water companies when their faulty drains and sewers caused flooding. Now there is. Ann Isaacs explains
Buildings and contents insurers have for many years received claims relating to damage caused by defective public drains and sewers. Damage has frequently occurred through water leaking from a pipe and undermining the foundations of a property, or by water or waste entering an insured property.
In most instances, insurers have sought to recover their expenditure from the owner of the public drain or sewer, the statutory sewerage undertaker. All too often these organisations, usually private or public water and sewerage companies, have hidden behind the veil of the Water Act 1991. Under the Act a statutory sewerage undertaker is not liable for any failure to act, known as a non-feasance. Only a misfeasance, such as carrying out remedial or maintenance work in a negligent way will bring liability.
The legal principle governing this type of misfeasance was established in Goldman v Hargrave [1967] and the ironically-named, Leakey v National Trust [1980]. This states that where there is a hazard on a defendant's land and the individual knew, or ought to have known, of that hazard, the defendant is under a duty to prevent that hazard from spreading to the land of his neighbour and causing damage.
Repeated flooding
Despite this, the courts have found that a claimant does not have a remedy at common law against a statutory sewerage undertaker for failure to maintain the public drains and sewers for which they are responsible.
The incorporation of the European Convention on Human Rights into English law has seen a number of cases being brought before the courts.
One such case is Marcic v Thames Water Utilities [2002]. Marcic had suffered repeated flooding to his home caused by the failure of the defendant to carry out suitable repair works to surface and foul water sewers close to his property. Marcic was not alone in his plight. The Court of Appeal, considering the Marcic case, heard that in the Thames area thousands of homes are at risk of flooding from overburdened sewers.
Marcic claimed against Thames Water Utilities for breach of statutory duty, breach of its common law duty in the torts of nuisance and negligence and an actionable interference with Marcic's rights under Article 8 of the European Convention on Human Rights [respect for private and family life] and/or Protocol 1 Article 1 [protection of property].
No remedy
At first instance, the court held that Marcic did not have a remedy at common law or for breach of statutory duty, but that the defendant's failure to repair the sewers was an infringement of Marcic's human rights under the Convention.
The Court of Appeal upheld the decision at first instance that Marcic had no action for breach of statutory duty. However, the court found that the defendant was liable to Marcic for the nuisance he had suffered for the entire period covered by his claim. Further, Marcic's right to damages at common law displaced any right to damages he would have under the Human Rights Act 1998.
Thames Water Utilities used this as an important test case, because of the implications it has for the liability to the thousand of householders in its areas. The decision of the Court of Appeal also has far-reaching implications for all statutory sewerage undertakers and building and contents' insurers. Insurers may now make claims in both the tort of nuisance and possibly under Human Right's legislation for damage to property caused by overburdened, defective or damaged drains.
Sewerage undertakers will no longer be able to hide behind statute or public policy and must compensate homeowners for the damage to their homes caused by the drains and sewers for which they are responsible.
Ann Isaacs is a solicitor at DLA Insurance
