R v Environment Agency

Interference with possessions must strike a fair balance between the community’s general interest and the protection of individual rights. The distinction between deprivation and control of property is neither clear-cut nor decisive. Even a lawful environmental control may breach article 1 of the First Protocol where its particular impact imposes an excessive and disproportionate burden.

Compensation is relevant to that assessment, although environmental controls create no general expectation of compensation. A restriction eliminating almost all the benefit of a commercial right, destroying a person’s livelihood and affecting that person much more severely than comparable rights-holders may require compensation. The result is exceptional and fact-sensitive. Where the authority has properly considered the fair balance, a reviewing court should give weight to its assessment.

Mr Mott held a leasehold right to operate a commercial salmon fishery in the Severn Estuary. Annual licences were required under section 25 of the Salmon and Freshwater Fisheries Act 1975. Conditions imposed by the Environment Agency for the 2012, 2013 and 2014 seasons reduced his permitted catches to 30, 23 and 24 salmon respectively. He contended that the restrictions made the fishery uneconomic and the lease worthless.

The High Court, in [2015] EWHC 314 (Admin), held that the conditions were irrational and that, without compensation, they infringed article 1 of the First Protocol. The Court of Appeal, [2016] EWCA Civ 564, reversed the irrationality ruling but upheld the Convention claim and declared the three decisions unlawful in the absence of compensation.

The Supreme Court considered whether the conditions constituted control of use or de facto expropriation and whether a fair balance required compensation.

1. Appeal dismissed unanimously. Lord Carnwath, with whom Lady Hale, Lord Kerr, Lady Black and Lord Briggs agreed, upheld the conclusion that the conditions infringed article 1 of the First Protocol in the absence of compensation.

2. The distinction between expropriation and control of use is neither clear-cut nor crucial. From the Agency’s and the public’s perspectives, the conditions were a lawful exercise of powers to control fishing in the interests of environmental protection. Their extreme effect upon one person did not by itself convert them into expropriation. It remained necessary, however, to determine whether that person bore an excessive and disproportionate burden.

3. The protection of the environment carries special importance, but it does not remove the requirement to strike a fair balance. Compensation may be relevant to that balance. The Salmon and Freshwater Fisheries Act 1975 itself recognised in section 26 that compensation might be appropriate where restrictions affected a person wholly dependent upon fishing for a livelihood.

4. The trial judge correctly treated the restrictions as eliminating at least 95% of the benefit of the right and therefore as closer to deprivation than mere control. The Agency had not meaningfully considered their impact upon Mr Mott’s livelihood. Its allocation method also placed by far the heaviest burden upon him, while persons operating smaller fisheries for leisure might be affected little or not at all. Strict limits upon assignment of the lease further undermined any suggestion that it retained a meaningful leisure value.

5. The case was exceptional because both the severity of the impact and its disproportionate distribution distinguished it from ordinary environmental regulation. Article 1 creates no general expectation of compensation for adverse effects caused by necessary environmental controls. National authorities enjoy a wide margin of discretion, and courts should give weight to an authority’s assessment where it has properly considered the fair balance. Here, the absence of such consideration and the exceptional individual burden justified the declaration that compensation was required.

1. United Kingdom Supreme Court: The Environment Agency’s appeal was dismissed unanimously. The declaration that the licensing decisions infringed article 1 of the First Protocol in the absence of compensation was upheld: [2018] UKSC 10.
2. Court of Appeal: The Agency’s appeal on irrationality was allowed, but its appeal concerning article 1 of the First Protocol was dismissed. The court declared that all three licensing decisions were unlawful in the absence of compensation: [2016] EWCA Civ 564; [2016] 1 WLR 4338.
3. High Court: The claim succeeded on irrationality and article 1 of the First Protocol. The judge held that the catch restrictions could not lawfully have been imposed without compensation: [2015] EWHC 314 (Admin); [2016] Env LR 27.