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This article was first published on LexisPSL Environment on 13 February 2014. Click here for a free 24h trial of LexisPSL.

Talking Point--environmental case law

13/02/2014 Environment analysis: Our panel of experts gives its view on the most significant UK and EU environmental cases over the past year.

The experts
Simon Tilling, senior associate in Burges Salmon's environment and energy team. Emma Feeney and Sarah Holmes of Bond Dickinson LLP. Gordon Nardell QC, 39 Essex Court Chambers. Helen Simm, regulatory lawyer with experience in environment at Pannone. Anita Lloyd and Robert Biddlecombe of Squires Sanders. Karen Morrow, Professor of Environmental Law at Swansea University.

What were the most significant UK and EU environmental cases in the past year and why?
Simon Tilling: In truth, it has been a relatively uneventful year for UK and EU cases but there are still some interesting trends within the courts. For example, against a backdrop of funding cuts, political pressure to be more 'pro-business', and the possibility of the merger with the Environment Agency, nature regulator Natural England has brought some high profile prosecutions and it is interesting that 2013 was the year in which the courts really started to impose heavy penalties for breaches of nature conservation law. A hotelier in East Sussex was landed with a 135,000 bill for damage to an ancient coastal conservation site, and a landowner in Cumbria was ordered to pay 900,000 in fines and costs for felling trees in ancient woodland. These sentences prove that both the nature regulations--and the regulator itself--have teeth. Emma Feeney and Sarah Holmes: Dodson v Environment Agency [2013] EWHC 396 A hopeful claim for 2m damages by a fish farm owner has clarified that the Environment Agency (EA) owes no duty of care to private landowners. The claimant sought damages in relation to conservation work done by the EA alleging that the otter enhancement programme led to the loss of several thousand of his fish. The High Court held that the EA had no general common law duty of care to private landowners as this would create a conflict with the EA's conservation duties. The case is interesting as it highlights the duty on landowners and businesses to find out about risks faced by their business as the EA has no duty to advise those affected when exercising any of its statutory powers or duties.

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R v Sellafield Ltd; R v Network Rail Infrastructure Ltd [2014] EWCA Crim 49, [2014] All ER (D) 111 (Jan) The recent decision of the Court of Appeal has confirmed the increasing seriousness with which environmental offences are viewed. Sellafield appealed against a 700,000 fine for sending low-level radioactive waste to landfill on the basis that it was 'manifestly excessive'. The court criticised the company's complacent working culture and said that although there was a very low risk of harm, directors in the nuclear industry had to give the highest priority to safety and therefore any fine must emphasise the seriousness of the offence to the board. The Sentencing Council is currently finalising new guidelines for magistrates on sentencing environmental offences which are likely to contribute to the increasing trend of higher fines. Shell Nederland and another: Cases C-241/12 and C-242/12 A recent EU waste decision will be welcomed by fuel oil suppliers. Methyl tertiary butyl was accidentally left in some tanks which were loaded with diesel by Shell for onward supply to a customer. The mixture did not meet the contractual specifications and was rejected by the customer. Criminal proceedings were brought alleging that the mixture was waste. The ECJ confirmed that a mixed consignment was not waste provided that it was certain that the holder of the consignment did actually intend to resell the consignment after mixing with another product. Gordon Nardell QC: While media attention has been lavished on high-profile causes such as HS2 and the badger cull, the EU Habitats Directive 92/43/EEC has contributed some of the most legally significant case-law developments. Sweetman v An Bord Pleanla: C-258/11 [2013] All ER (D) 96 (Apr) was a reference to the CJEU from the Irish Supreme Court. An Bord Pleanla (planning board) granted consent for the N6 Galway Bypass. The route passed through the Lough Corrib SAC, involving permanent loss of about 1.47 hectares of karstic limestone pavement, an Annex 1 priority habitat. The Board concluded there would be no adverse effect on the integrity of the SAC within art 6(3), because the impact would only affect a small proportion of the total limestone pavement habitat. The Court of Justice of the European Union (CJEU) rejected that approach. It held that if the plan or project 'will lead to the irreparable loss of the whole or part of a priority natural habitat type whose conservation was the objective that justified the designation of the site... the view should be taken that such a plan or project will adversely affect the integrity of the site'. The CJEU approached the question whether, on these facts, there was an adverse effect on integrity as one of law for the court itself, rather than a question of judgement for the domestic authorities. The English courts have so far taken a more forgiving approach, treating the decision-maker's conclusion on integrity as a question of judgement reviewable only on Wednesbury grounds (R (Merricks) v Secretary of State for Trade & Industry [2007] EWCA Civ 1034). They have also accepted that loss of part of a habitat can be offset by replacement provision without necessarily producing an adverse effect on integrity (Hargreaves v Secretary of State for Communities and Local Government [2011] EWHC 1999 (Admin), [2011] All ER (D) 33 (Aug)). But those cases did not concern priority habitat types. So the big question is--how far does the ultra-precautionary approach in Sweetman apply to non-priority habitats? The CJEU did not decide that question. Depending on the answer, Sweetman may have placed a ticking time-bomb under UK implementation of the Habitats Directive, with huge implications for energy, infrastructure and many other forms of development. Helen Simm: R (on the application of ClientEarth) v Secretary of State for the Environment, Food and Rural Affairs [2013] UKSC 25, [2013] 2 All ER 928 In May 2013, environmental lawyers' organisation, Client Earth, won its appeal to the Supreme Court over air pollution. The CJEU declared that the government is in breach of the EU Air Quality Directive 2008/50/EC, art 13. The Court of Appeal had previously declined its application for judicial review of the Government's plans to improve air quality. The case concerned the proper interpretation and implementation of the Air Quality Directive. The Directive is addressed to protection of human health and the environment. Client Earth argued that under the EU's Air

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Quality Directive, the government should be forced to provide the European Commission with plans for reducing nitrogen dioxide levels by 1 January 2015 in 17 regions of the UK. Draft air quality plans submitted to the commission by the government in September 2011 indicate that compliance with the directive will only be achieved between 2015 and 2020 in 16 of 40 zones which currently exceed nitrogen dioxide limits, including Birmingham and Manchester, and before 2025 in London. Carnwath JSC stated that because the case raises 'difficult issues' of European law, guidance from the CJEU is required. Following this case, clarification was sought from the CJEU on a number of topics including whether an EU member state is required to seek a postponement of a deadline if it cannot meet that deadline, what the country's obligations are, and the remedies which a national court should provide when a jurisdiction is non-compliant and has not sought a postponement. This case has broader implications for EU environmental law--it is clear that if the government breaks the law, citizens can demand justice and the courts must act. The courts appear to be able to force the government to take steps to urgently reduce dangerous air pollution in many British cities to meet European limits. R (on the application of Edwards) v Environment Agency : C-260/11 [2013] All ER (D) 95 (Apr) In this case the CJEU provided a judgment on the meaning of 'prohibitive expense' in environmental legal proceedings. Both EU law and the Aarhus Convention oblige member states and contracting parties to ensure that environmental legal proceedings are 'not prohibitively expensive'. This means ordinary citizens and civil society groups should be able to afford to go to court and challenge the decisions of public and private bodies that threaten the environment. The CJEU held that domestic courts cannot look exclusively at the financial means of individual claimants but must also carry out an objective analysis of the amount of the costs. In deciding whether a figure would be 'objectively unreasonable', the court must take a number of other factors into account, including whether the claimant has reasonable prospects of success, the importance of what is at stake for the claimant and for the protection of the environment, the complexity of the relevant law and whether public funding or other costs protection schemes are available. The judgment has significant implications for people attempting to use the law to protect the environment across the EU. The judgment confirms that the government must ensure the public at large can exercise their democratic right to go to court. Anita Lloyd and Robert Biddlecombe: Sweetman v An Bord Pleanla: C-258/11 [2013] All ER (D) 96 (Apr) Under the EU Habitats Directive 92/43/EEC where a project is likely to have a significant impact on a site of community interest (SCI), a member state is required to undertake an appropriate assessment to ascertain whether the project will have a negative effect upon the integrity of the site (and whether there is an alternative solution). If a negative assessment has been given (and there is no alternative solution), the project may only proceed if there are imperative reasons of overriding public interest (IROPI) for it doing so and provided compensatory measures are undertaken. In 2008, the Irish planning board granted consent for a road scheme involving the permanent loss of 1.47 hectares of the 270 hectare Lough Corrib SCI, which was designated for its priority habitat of limestone pavement. The board concluded that although it would have a localised severe impact on the SCI, the scheme would not adversely affect its overall integrity and would not, therefore, have unacceptable effects on the environment. Mr Sweetman applied for judicial review of the board's decision. The CJEU ruled that where an assessment shows that a project would lead to the lasting and irreparable loss of the whole or part of a priority natural habitat type whose conservation justified the SCI designation, the integrity of the site would be negatively affected. Therefore, the board was not entitled to authorise the scheme unless it met the criteria of IROPI (and necessary compensatory measures are taken). This decision represents a blow for developers because, in practice, where a negative assessment has been made, it is rarely possible for a developer to prove IROPI and make suitable compensation. Nevertheless, it

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is not clear whether the same approach would also apply to non-priority habitats which are protected under the Habitats Directive. Also, the approach of the CJEU may have been different if the threatened damage was merely temporary. Scottish Environment Protection Agency v Joint Liquidators of The Scottish Coal Company Ltd [2013] CSIH 108 The liquidators of the Scottish Coal Company (SCC) sought directions as to whether they were entitled to disclaim the SCC's statutory mine operating licences. The liquidators argued that if they were not entitled to disclaim, the cost of complying with the terms of the licences would quickly exhaust the assets of SCC. Although the legislation under which the licences were granted, the Water Environment (Controlled Activities) (Scotland) Regulations 2005, SSI 2005/348, and the Water Environment (Controlled Activities) (Scotland) Regulations 2011, SSI 2011/209 (the CARs), provided that holders could agree with the Scottish Environmental Protection Agency to surrender their licences, the liquidators reckoned that the costs of complying with the terms of the surrender conditions would amount to several million pounds. By contrast, disclaimer would simply bring the obligations under the licences to an end immediately without the need for further expenditure. Under the Insolvency Act 1986, liquidators in England and Wales have a statutory power to disclaim 'onerous property'. Since Re Celtic Extraction Ltd (in liq) [2001] Ch 475, [1999] 4 All ER 684 in 1999, it has been settled law that liquidators in England and Wales are entitled to treat environmental permits as onerous property and disclaim them. The question in this case was, therefore, whether a separate power of disclaimer existed under the CARs and the terms of the licences. In December 2013, on appeal to the Inner House of the Scottish Court of Session, it was ruled that there was no power for the liquidators to disclaim. The court's prime reason was that, as the CARs already expressly provide licence holders with a mechanism to bring licences to an end (ie surrender), an additional right of disclaimer could not be inferred for liquidators in Scotland. This case raises two interesting issues: o the difficult balancing exercise between, on the one hand, protecting the interests of the creditors by preserving the assets of the company in liquidation, and, on the other hand, ensuring that the liquidators of licence holders cannot walk away without making adequate provision to mitigate the risk of harm to the environment the Outer House has chosen not to follow the position in England and Wales--as we enter the year of the Scottish referendum on independence, it is noteworthy that, even while the union subsists, there are marked differences between the laws which apply within it

Karen Morrow: While there are many higher profile cases that are concerned with larger issues, the Court of Appeal decision in Thomas v Merthyr Tydfil Car Auction Ltd [2013] EWCA Civ 815, [2013] All ER (D) 144 (Jul) (a small-scale claim which concerns the continued challenges in determining the relationship between planning law and claims in nuisance) has a great deal to offer in balancing the considerations that continue to be raised by these two areas of law. The case specifically considers the factors that need to be weighed in order to determine whether planning permission changes the character of a locality for the purposes of a claim in nuisance by altering what amounts to a reasonable user of land in the area. The particular planning permission in question, granted in 1997, was found to have been based on the view that the activities it covered were compatible with the 'mainly residential' character of the area, though significantly this was identified in a nuanced way which acknowledged the presence of busy roads and business uses nearby that were deemed typical in this part of South Wales at the time. The fact that noise from the site was found to have decreased significantly after the claimants commenced their action was also deemed significant, both at first instance and on appeal, in going to the reasonableness of the user in that it showed that the site could be operated under the terms of its planning permission without unreasonable interference with the amenity of its neighbours. The nuanced handling of witness material in the case, in reference to balancing the conflicting interests at stake in a hybrid public and private law context, is also of interest. This case, as the latest in a recent surge

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of litigation in the area shows a judiciary that is becoming increasingly adept at reconciling public and private law issues in this area.

What further cases and legislation are expected?

Simon Tilling: Private nuisance litigation is an area to watch in 2014. We are expecting the Supreme Court decision in Coventry v Lawrence (Lawrence v Fen Tigers Ltd; sub nom Lawrence v Coventry (t/a RDC Promotions) [2012] EWCA Civ 26, [2012] 3 All ER 168) a case about noise from a motorsports circuit, and the relevance of planning consent to nuisance actions. The wind energy industry and anti-wind campaigners are also awaiting an approved judgment in Siraj v C&M Hall, a case about whether the flashing or glinting of the sun's rays from the rotating blades of a wind turbine can constitute a nuisance at law. The Law Commission has recommended consolidating wildlife legislation and introducing a new offence for employers who knowingly permit employees to commit wildlife crimes--we await draft legislation to see what this will look like in practice. In 2013 the Sentencing Council consulted on sentencing guidelines for environmental offences to provide a more structured mechanism for the imposition of fines. If brought into force in 2014, we are likely to see the courts imposing consistently heavier fines for environmental offences. Interviewed by Nicola Laver. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.