Marcic (Respondent) v. Thames Water Utilities Limited (Appellants)

A statutory sewerage undertaker is not liable in nuisance merely because it fails to enlarge an adequately maintained sewerage system which has become overloaded through increased use that it cannot control. The common law cannot impose duties which would supplant a statutory scheme entrusting infrastructure priorities and enforcement to an independent regulator.

The enforcement code in the Water Industry Act 1991 permits an affected person to sue for breach of an enforcement order, while preserving genuinely independent common law claims. It does not preserve a nuisance claim which is, in substance, a demand that more sewers be built.

That regulatory scheme is compatible with article 8 and article 1 of the First Protocol. It strikes a permissible fair balance between affected householders and customers who fund improvements, with regulatory complaint and judicial review providing safeguards.

Repeated overloading of public surface-water and foul-water sewers caused serious external flooding at Mr Marcic's home. The existing sewers had been adequate when constructed, were properly operated and maintained, and had become insufficient after housing development increased flows. The effective solution was additional sewer capacity.

Mr Marcic did not seek enforcement through the Director General of Water Services under the Water Industry Act 1991. He instead claimed in nuisance and under the Human Rights Act 1998, relying on article 8 and article 1 of the First Protocol. The Technology and Construction Court rejected the nuisance claim but upheld the human-rights claim. The Court of Appeal, in [2002] EWCA Civ 64, [2002] QB 929, found for him on both claims.

The central questions were whether an independent nuisance action could require the undertaker to build more sewers despite the statutory enforcement scheme, and whether that scheme adequately protected the householder's Convention rights.

1. Appeal allowed unanimously; action dismissed. Lord Nicholls delivered the leading speech. Lord Hoffmann gave concurring reasons, Lord Hope added reasons on Convention compatibility, and Lord Steyn and Lord Scott agreed with Lord Nicholls and Lord Hoffmann.
2. Per Lord Nicholls and Lord Hoffmann, the Water Industry Act 1991 established an elaborate enforcement code for the section 94(1) drainage duty. The Director General of Water Services decides whether to make an enforcement order after balancing drainage needs, cost, customer charges and competing priorities. An affected person may sue for loss caused by breach of an enforcement order. In its absence, the appropriate route is complaint to the Director and, where warranted, judicial review of regulatory inaction.
3. Section 18(8) preserved causes of action arising independently of a statutory contravention. It did not create a nuisance claim. The flooding was not caused by defective operation, cleansing or maintenance. The undertaker had to accept connections under section 106 and could not control the increased inflow. The claim therefore amounted to an assertion that it should have constructed additional sewers. Allowing courts to determine such claims individually would supplant the regulator's statutory function and impose infrastructure priorities inconsistent with Parliament's scheme.
4. Per Lord Nicholls and Lord Hoffmann, the ordinary landowner cases concerning adoption or continuation of hazards did not displace the established sewer cases. Capital expenditure by a public utility affects all similarly situated customers and requires industry-wide choices which ordinary private litigation cannot make. The Court of Appeal therefore erred in treating failure to enlarge the system as an actionable nuisance.
5. Per Lord Nicholls, Lord Hoffmann and Lord Hope, article 8 and article 1 of the First Protocol required a fair balance, not absolute protection. Parliament was entitled, within its broad policy discretion, to entrust that balance to an independent regulator whose decisions were reviewable. The scheme was Convention-compliant. Mr Marcic had no Convention right to have the infrastructure decision made through a private nuisance action and had not used the statutory route.
6. Lord Nicholls added that the uncertain compensation position for people enduring intolerable sewer flooding warranted reconsideration. The Court of Appeal's order was set aside, subject to the stipulated costs arrangements, and all preliminary issues were answered in the negative.

1. House of Lords: The appeal was allowed unanimously. The order of the Court of Appeal was set aside, save as to the existing costs orders, and the trial judge's order was varied so that all preliminary issues were answered in the negative.
2. Court of Appeal: In Marcic v Thames Water Utilities Ltd [2002] EWCA Civ 64, [2002] QB 929, the court found for Mr Marcic in nuisance and under the Human Rights Act 1998.
3. Technology and Construction Court: His Honour Judge Richard Havery QC rejected the nuisance claim and other claims no longer pursued, but upheld the claim under the Human Rights Act 1998.