The Court formed the judgment in a case involving Thames Water Utilities Limited (Thames) which had challenged a ruling by Bromley Magistrates' Court in which it was found guilty of the criminal offence of unlicensed depositing of controlled waste.
Thames, which operates the network of sewers in the London and Thames Valley area, had admitted that sewage had escaped from its network onto residential properties, allotments and a main road in Bromley in 2003, but claimed that because the discharge was unintentional that it should not be found criminally liable for unlicensed depositing.
The judgment is the latest in a long line of decisions relating to pollution, all centring around whether the waste regime ought to apply to sewage which escapes to land. Thames had been unsuccessful in its arguments up to this point.
Thames had argued that Bromley Magistrates' Court had misconstrued the meaning of rules set out in the Environmental Protection Act (EPA). However, the High Court said there had been no error in law and that unintentional leakages of waste constitute 'deposits' that are subject to licensing controls.
"In the absence of the requirement that the 'deposit' take place 'knowingly', the sub-section [of rules on depositing controlled waste under the EPA] is also naturally capable of extending to a 'deposit' resulting from an unintended escape," Lord Justice Gross said in his ruling. "Even assuming that the normal case of a contravention of the sub-section indeed involves a person knowing what they are doing, it does not follow that cases which are not the norm fall outside of it."
"I am left in no real doubt overall that the intention of the legislature was to impose strict liability [to the provisions of the EPA setting out the offence of unlicensed depositing] so that 'deposit' does include an unintended escape of sewerage from the sewerage undertaker's network," the judge concluded.
Under the EPA it is an offence for businesses to deposit controlled waste, or knowingly cause or knowingly permit controlled waste to be deposited in or on any land unless a waste management licence or environmental permit authorising the deposit is in force and the deposit is in accordance with it.
Under the Act businesses that can show that they "took all reasonable precautions and exercised all due diligence to avoid" the unlicensed deposit of controlled waste have a defence against the criminal offence.
Waste law expert Gordon McCreath of Pinsent Masons, the law firm behind Out-Law.com, said that the decision should prompt water companies to review whether they are doing all they can to ensure they can rely on the defence.
"Another decision on the Bromley Magistrates case, another decision going against Thames and the UK water industry," McCreath said. "This saga has been unfolding since the original pollution incidents in 2003. It may still have legs in it – Thames may yet appeal the decision and they have an ongoing appeal against the £204,000 fine imposed on them."
"Assuming things stay the same, water companies’ focus for sewage spills to land now needs to be on the due diligence defence offered under the EPA. They will need to show that they took all reasonable precautions and exercised all due diligence to avoid the sewage spill, so that will require evidence of the precautions taken at a network management level to avoid spills, as well as the steps taken in immediate response to the incident itself," he said.
"Precisely what precautions and steps will satisfy the test? The statutory definition and the case law behind it isn’t a lot of help here, but sensible strategies can be put in place to protect companies’ positions. Above all else, water companies need to review their asset management and incident response procedures – if they haven’t already done so – to ensure that they tick the boxes for satisfying the defence," the expert added.
Businesses found criminally liable for unlicensed depositing of controlled waste are subject to large fines and the amounts are likely to rise for large businesses like water companies.