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Court of Appeal dismisses appeal in first UK case on the Environmental Liability Directive

DATE: 04 Aug 2016

Natural Resources Wales (“NRW”), the single environmental body established in 2013 when the Environment Agency Wales was merged with the Countryside Council for Wales and the Welsh Forestry Commission, has successfully defended, in appeal proceedings, the first of its decisions to be subject to judicial review. The judgment in the case is significant because it is the first time that the Court of Appeal has considered in detail the Environmental Liability Directive (2004/35/EC) (“the ELD”) and its domestic transposition.

In R (Seiont, Gwyrfai and Llyfni Anglers’ Society) v Natural Resources Wales [2016] EWCA Civ 797, a society of anglers had claimed that discharges from a sewage treatment works into Llyn Padarn - a lake in Snowdonia - were causing “environmental damage” both to the water quality of the lake and to a rare and genetically distinct population of the fish known as Arctic charr. In its decision responding to the notification, NRW concluded that, except for an algal bloom in 2009 which caused a drop in the ecological status of the water in Llyn Padarn, no environmental damage had occured or was imminent as a result of the discharges.

The claimant society submitted that NRW had erred in law in its approach to “environmental damage” because it had ‘limited’ its consideration to environmental deterioration. The claimant society argued, in an amendment to its original case, that NRW ought also to have considered whether the discharges were decelerating the recovery of fish numbers and of water quality to European standards.

At first instance, Hickinbottom J accepted NRW’s case that the deceleration of recovery was not “environmental damage” for the purposes of the Directive and that, in any case, the claimant had failed to make good its contention that the sewage works were actually causing such deceleration.

The Court of Appeal (Laws, King, Lindblom LLJ) has now upheld that judgment. Lindblom LJ agreed with Hickinbottom J that the concept of “the ‘baseline condition’” in the ELD “cannot be any condition other than that current at the time of the relevant ‘event, act or omission’ that caused the damage” and “is not compatible with the concept of ‘damage’ including a deceleration of progress to the optimal or some better status or condition that may or may not have pertained well before the polluting activity of the operator took place” [28].

Lindblom LJ also agreed with Hickinbottom J that it was important to distinguish between the objectives of the ELD and those of the Water Framework Directive (“the WFD”). Whereas “[preventing] environmental deterioration can properly be said to assist with… ultimate progress towards ultimately acceptable environmental positions, as appears to be reflected in [the WFD]”, “the focus” of [the WFD] “is different from that of the [ELD]” with the latter “firmly focused on deterioration of the environment of bodies of water, notably the prevention of deterioration and, if such occurs, its remediation by the operator who caused it under the polluter pays principle” [35].

The court declined an invitation by the appellant to refer the matter to the Court of Justice of the EU. There was no realistic prospect, said the court, that another meaning of the concepts of “damage” and “environmental damage” in the ELD would be accepted by another domestic court in the EU or by the Court of Justice itself [60].

Lindblom LJ also upheld Hickinbottom J’s conclusion that a body responding to a notification of environmental damage in the regime is not required to consider or search around for damage other than that claimed in the notification [41-43].

The full judgment is available here. The BBC’s coverage of the case can be followed here.

David Forsdick QC and Gwion Lewis acted for Natural Resources Wales in both the Court of Appeal and the High Court.