Marcic v Thames Water Utilities Ltd

JurisdictionEngland & Wales
CourtHouse of Lords
Judgment Date04 Dec 2003
Neutral Citation[2003] UKHL 66

[2003] UKHL 66


The Appellate Committee comprised:

Lord Nicholls of Birkenhead

Lord Steyn

Lord Hoffmann

Lord Hope of Craighead

Lord Scott of Foscote

Thames Water Utilities Limited

My Lords,


This appeal concerns flooding of a particularly unpleasant kind: from foul water sewers as well as surface water sewers. Sewer flooding is a nationwide environmental problem, arising largely from the building of ever more houses to meet the housing demand. Sewers and drains, sufficient when laid in the 19th century or later, are no longer adequate to cope with the volume of surface water entering the public drainage system in times of heavy rainfall. Overloaded surface water sewers spill into the foul water sewers. As a result, all too often water and untreated sewage overflow at the lower levels of the drainage system, causing misery for the people living there.


The risk of this happening has been reduced over the last ten years, but many thousands of people, with varying degrees of frequency, still suffer in this way. Currently 6,000 properties in England and Wales suffer internal sewer flooding each year. The water floods into the houses and buildings. Half these incidents arise from 'one-off' causes such as blocked or collapsed sewers or pumping station failures. The other half arise from overloaded sewers. The flow of water is greater than the sewer's hydraulic capacity. But the number of properties affected by this problem is not confined to 6,000. The properties flooded are not the same every year. Currently about 15,000 properties are at risk of internal sewer flooding at least once every ten years. Many properties are at risk in this way twice or more in ten years.


Additionally, the limited information available suggests that between 15,000 and 20,000 properties are affected by external sewer flooding. External flooding affects gardens, driveways and yards, but does not permeate into the houses or buildings themselves.

The flooding in Old Church Lane


Mr Peter Marcic is one person who has endured serious and repeated external sewer flooding arising from overloaded sewers. He lives at Stanmore. He owns and occupies 92 Old Church Lane as his home. This is a substantial family house with front and rear gardens. Mr Marcic has lived there for over twenty years and is now in his mid-sixties.


The house is served by two public sewers passing under Old Church Lane, one for surface water, the other for foul water. They are part of the public sewerage system for draining the London Borough of Harrow. When laid, probably in the 1930s, the surface water sewer was constructed to the standard then generally accepted and its capacity was sufficient to meet any usage which could reasonably be anticipated. Because of subsequent housing development in the area, for some years now whenever there is heavy rain the surface water sewer in Old Church Lane becomes overloaded as a result of the volume of water entering surface water sewers higher up the catchment area.


When this occurs Mr Marcic's house, which is at the low point of the drainage system, suffers badly. From June 1992 his property has been regularly and seriously affected by flooding of surface water and also by back flow of foul water from the two sewers in Old Church Lane. There were two such incidents in 1992, one in each year from 1993 to 1996, two in 1997, none in 1998, four in 1999 and four or five in 2000. When these incidents occur the surface water sewer in Old Church Lane becomes so full that effluent overflows through gullies and onto Mr Marcic's property. Surface water also enters the public foul water sewer under Old Church Lane. So it too becomes overloaded, causing effluent to flow back into Mr Marcic's property through the drain connecting his house to the public sewer in the lane. Initially, in 1992, it took half an hour of heavy rainfall to bring about one of these flooding incidents. But the position deteriorated. By 2001 fifteen minutes of heavy rain or some hours of steady drizzle were sufficient.


When these flooding incidents occur the water reaches the brick walls of Mr Marcic's house, above as well as below the level of the damp course, often rising to within an inch of the level of the front door threshold. The house is affected by damp and subsidence and may have been damaged structurally. Mr Marcic constructed his own flood defence system in his front garden, at a cost of £16,000. To an extent this alleviated the damage. It is these works alone which prevented floodwater from entering his home. But the only effective solution is enlarging or extending the existing public sewerage system. New public surface water sewers are needed to provide additional capacity to cope with heavy rainfall.


Mr Marcic complained to his local authority in June 1992. Thereafter, despite repeated efforts by him to get something done, no steps were taken to remedy the underlying cause. The history is summarised by His Honour Judge Richard Havery QC: [2002] EWCA Civ 64, [2002] QB 929, 937-939, paras 12-16. Mr Marcic started these court proceedings in May 1998. The defendant, Thames Water Utilities Ltd, is the statutory sewerage undertaker for the area which includes Old Church Lane. Mr Marcic sought an injunction restraining Thames Water from permitting the use of its sewerage system in such a way as to cause flooding to 92 Old Church Lane, a mandatory order compelling Thames Water to improve the sewerage system, and damages.


Thames Water operates its sewerage system under statutory powers and subject to statutory duties. In these proceedings, for a reason which will become apparent, Mr Marcic has not sought to rely directly on any alleged contraventions by Thames Water of its statutory obligations. Instead Mr Marcic asserts (1) a common law claim in nuisance and (2) a claim under the Human Rights Act 1998 that Thames Water as a public authority has acted incompatibly with his Convention rights under article 8 (respect for family life and home) and article 1 of the First Protocol (protection of property). At a trial of preliminary issues Judge Richard Havery, sitting in the Technology and Construction Court, rejected the former claim and others (not now pursued) but upheld the latter. On appeal the Court of Appeal, comprising Lord Phillips of Worth Matravers MR, Aldous and Ward LJJ, found in favour of Mr Marcic on both claims (1) and (2): [2002] QB 929. Thames Water has appealed against that decision.

The statutory scheme


The starting point for any consideration of Thames Water's obligations and liabilities must be the statutory scheme under which it operates the sewers in question. Sewage disposal and drainage have been the subject of statutory regulation for 500 years. The first public general Act was the Statute of Sewers 1531. But the systematic construction of extensive networks of public sewers dates largely from the middle of the 19th century and was the responsibility of public water undertakers. Until comparatively recently public water undertakers were usually local authorities. The Water Act 1989 provided for the transfer of most of the statutory functions of the existing public water authorities to privatised water and sewage undertakers. These were regulated commercial companies, having broadly the same statutory powers and duties as the authorities they replaced.


The current legislation comprises the Water Industry Act 1991. This statute consolidated the relevant provisions of the Water Act 1989. The 1991 Act sets out the powers and duties of both water undertakers and sewerage undertakers. The exercise of these functions is subject to supervision and control by the Director General of Water Services. Thames Water is a commercial company carrying on business as a public sewerage undertaker within this statutory framework. It is one of ten appointed sewerage undertakers. Its appointed area is huge, extending from Cirencester to Brentwood and from Banbury to Crawley. It is responsible for 80,000 km of public sewers of varying sizes, serving 5.4 million connected properties and a population of 12 million.


The 1991 Act is extensive and I shall mention only the provisions of direct relevance to the issues arising in these proceedings. Part I of the Act makes provision for the office of Director General of Water Services. He is appointed by the Secretary of State. Section 2 imposes on the Secretary of State and on the Director, to use the statutory abbreviation of his title, wide ranging duties of a general character regarding the water industry. In short, the Director is the regulator of the water industry in England and Wales. He is required to exercise and perform his statutory powers and duties in the manner he considers best calculated to secure that the functions of a water undertaker and a sewerage undertaker are properly carried out. This duty includes ensuring that companies appointed as sewerage undertakers are able, by securing reasonable returns on their capital, to finance the proper carrying out of their functions. Commercial companies cannot be expected to take up appointments as sewerage undertakers unless there is a prospect of obtaining a reasonable rate of return on their invested capital. The Director is also required to protect the interests of customers of sewerage undertakers in respect of sewerage undertakers' drainage charges and in other respects.


Sections 18 to 22 of the Act make provision for enforcement orders. Enforcement orders are a means by which the Secretary of State and the Director enforce the obligations of a sewerage undertaker. These provisions are of central importance in the present case. So far as the present case is concerned...

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