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Water waste as compensation culture ignores the big picture

legal matters

You may remember the case of the unfortunate Mr Marcic (AJ 26.9.02).

His property, located at the lowest point of Old Church Lane in Stanmore, Middlesex, endured serious and repeated flooding because the nearby foul and surface water sewers were overloaded.

The statutory sewerage undertaker for his area was Thames Water Utilities Limited and Mr Marcic claimed against them for private nuisance and for breach of his right to respect for his home, under the Human Rights Act 1998 (HRA).

The trial judge found that the nuisance claim failed, but that the HRA point suc - ceeded. The Court of Appeal had upheld both claims. Despite this promising start, Mr Marcic was to be disappointed by the decision of the House of Lords.

In Marcic v Thames Water Utilities Limited (2003) the House of Lords addressed some of the problems inherent in claims by private individuals for compensation from public bodies. When rejecting both of Mr Marcic's claims, its lordships' essential message was not to lose sight of the big picture.

Thames Water owed statutory obligations to a wider public under the Water Industry Act 1991. Its powers and duties were subject to the supervision and control of the director general of water services, appointed by the secretary of state. One of its obliga - tions, to provide an adequate system of sewers, was enforceable by means of a system of enforcement orders. If the director general failed to make an enforcement order, proceedings for judicial review could be brought against either the director general or the secre - tary of state. Thus, Thames Water's obligations to provide adequate sewers were policed by the director general, the secretary of state and, ultimately, the public law courts.

But Mr Marcic had not reported Thames Water to the 'sewage police'.

Instead, he had gone to court claiming that Thames Water owed him an individual common law duty to lay new sewers to prevent flooding to his home, failing which they should pay him compensation.

The law lords held that Mr Marcic's claim was inconsistent with the bigger statutory picture. Thames Water could not control the volume of water entering its sewerage systems and they were obliged to accept new connections even if they risked overloading existing sew - ers. In those circumstances it would be surprising if parliament had intended that, whenever flooding occurred, every householder whose property had been affected could sue the sewerage undertaker for an order that they build more sewers or pay damages.

The enforcement procedures under the Water Act were designed to prevent claims by individuals. Instead, when flooding occurred the director general could consider whether to make an enforcement order - not from the position of the individual householder affected, but in the context of the wider considerations spelled out in the statute.

The individual would have a claim only if the water company failed to comply with any enforcement order made. If individuals had, at the same time, a right to sue, it would, as they put it, 'set at nought' the statutory scheme and oust the regulatory role of the director gener - al. The operation of this scheme left no room for an individual's common law claim in nuisance.

Similarly, the Human Rights Act was not there to pro - vide absolute protection to property generally or residential property in particular. Instead a balance was to be struck between the interests of the individuals whose homes were affected and the interests of all customers and the wider public.

This decision clearly cannot be described as a victory for 'the little man'. Nor will it be welcomed by those who believe that if public bodies provide poor service they should be held accountable and made to pay. It does, however, demonstrate a common misconception that may underly our current compensation culture. Local authorities, statutory undertakers and other public bodies do not exist purely to protect the interests of the individual. They have a wider public role to play. Much as a requirement, for example, to pay delayed rail passengers token compensation detracts from the greater need to invest in service improvements, an individual's entitlement to claim pay - outs in the event of statutory failure is wholly inconsistent with the bigger pub -

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