Å®ÉúСÊÓƵ

Governments of all persuasions these days insist that the notion ‘the
polluter pays’ is central to their environmental policy. It seems such a
simple principle, captured in an alliterative phrase, and it conveniently
shifts responsibility for cleaning up pollution out of the government’s
hands. In practice, however, the idea may not be easy to implement.

The difficulties were graphically illustrated last week by a House of
Lords ruling which overturned an earlier decision from the Court of Appeal.
At issue was who should foot the bill for contamination of a drinking water
borehole.

The Law Lords became involved after the appeal court awarded the Cambridge
Water Company £2 million in damages, interest and costs against a
tannery company, Eastern Counties Leather. The water company had pumped
drinking water from the borehole until it found the water to be contaminated
with solvents used by the tannery. The settlement sent shock waves through
the waste and insurance industries.

For the first time, a court had appeared to come out in favour of the
principle that a polluter must pay, even if the damage was not foreseeable
at the time the pollution took place. The tannery had used organochlorine
solvents such as perchloroethane to degrease animal pelts and agreed that
it had spilt quantities of the solvents during the early 1970s. But at the
time the pollution took place, there was no specific legislation concerning
spillages of such solvents, nor was it apparent that pollution of groundwater
might later be the subject of strict regulation.

The Law Lords have now re-established the principle that foreseeability
is a vital ingredient in determining who is liable in cases of past environmental
pollution. In other words, there should be no liability for ‘historic and
unforeseeable’ contamination.

Does this judgment represent a ‘charter for polluters’? Certainly not.
What the case should do is persuade Whitehall to bring in some form of national
fund to compensate for historic and unforeseeable pollution, a step it has
been reluctant to take. A model – not without flaws – already exists in
the US Super Fund. The European Commission is currently canvassing the possibility
of some form of supranational fund which would do the same for Europe.

Britain, as usual, has been lukewarm. But last week’s court case demonstrates
that the law can only go so far. Even the government’s own advisers from
the business world now accept that a compensation scheme may be required.
The government should recognise that the Lords’ decision means that it must
either change the law or support a safety net.