Cambridge Water Co Ltd v Eastern Counties Leather plc

Factual and Procedural Background

Company A, a statutory water undertaker, purchased and began using a borehole in 1979 to supply drinking water in The City. Approximately 1.3 miles away, Company B had operated a leather-tanning works since the nineteenth century. Between the early 1950s and 1976, small but regular spillages of the solvent perchloroethene (PCE)—used to degrease pelts—occurred on Company B’s concrete floor and seeped into the chalk aquifer beneath the site.

In 1983, laboratory tests detected PCE concentrations in domestic tap water sourced from Company A’s borehole that exceeded regulatory limits introduced after 1980. Company A took the borehole out of service, incurred costs developing alternative supplies, and sued Company B for £1 million-plus damages, alleging negligence, nuisance and strict liability under Rylands v. Fletcher.

Judge Kennedy (Queen’s Bench Division) dismissed all claims in 1991. The Court of Appeal reversed that decision in 1992, holding Company B strictly liable on the authority of Ballard v. Tomlinson. Company B appealed to the House of Lords.

Legal Issues Presented

1. Whether foreseeability of damage is a prerequisite for liability in nuisance and under the rule in Rylands v. Fletcher.
2. Whether the storage and use of large quantities of PCE at an industrial tannery constitutes a “non-natural” use of land for the purposes of Rylands v. Fletcher.
3. Whether Company B is strictly liable for historic environmental contamination that became actionable only after later regulatory changes.

Arguments of the Parties

Appellant’s (Company B’s) Arguments

• Strict liability under Rylands v. Fletcher arises only where the defendant could reasonably foresee that the escape of the substance might cause the type of damage suffered.
• The use of PCE in a long-established tannery within an “industrial village” was a natural/ordinary use of land, exempting Company B from Rylands liability.
• The contamination was historic; by the time damage became apparent, the solvent had passed entirely beyond Company B’s control.

Respondent’s (Company A’s) Arguments

• Following Ballard v. Tomlinson, liability is strict: it is sufficient that the defendant’s act caused contamination; foreseeability is irrelevant.
• Spilling thousands of litres of an industrial solvent is, by its nature, a “non-natural” use of land.
• Company B should bear the cost of making the water supply wholesome under post-1980 regulations (“polluter pays”).

Table of Precedents Cited

Court's Reasoning and Analysis

Judge Goff (speaking for the majority) conducted a historical and doctrinal review of nuisance and Rylands v. Fletcher and reached three core conclusions:

1. Foreseeability Requirement
   He traced modern nuisance law, citing The Wagon Mound (No. 2), and concluded that damages in nuisance require foreseeability of the relevant type of harm. Given the “close relationship” between nuisance and Rylands, the same requirement should apply under the Rylands rule. Early authorities said to omit foreseeability (e.g., West v. Bristol Tramways) were characterised as weak or exceptional.
2. Application to the Facts
   When Company B spilled PCE (pre-1976), no reasonable supervisor could have foreseen that minute quantities might migrate underground and, years later, make drinking water unwholesome under future regulations. Therefore the essential element of foreseeability was missing.
3. Natural vs. Non-natural Use
   Even if foreseeability had been present, the Court examined whether storing 50,000–100,000 litres of PCE annually was a natural use. It held that large-scale chemical storage is “almost a classic case of non-natural use,” rejecting the lower court’s reliance on local employment benefits as a justification.

Because the damage was unforeseeable at the relevant time, both nuisance and Rylands claims failed notwithstanding the non-natural character of the activity.

Holding and Implications

APPEAL ALLOWED. The House of Lords set aside the Court of Appeal’s judgment and restored Judge Kennedy’s 1991 order dismissing all claims. Costs in the Court of Appeal and the House were awarded to Company B.

Implications: The decision definitively imports a foreseeability requirement into strict-liability actions under Rylands v. Fletcher, aligning that rule with modern nuisance principles and curbing its scope. The ruling clarifies that historic industrial pollution, unforeseen at the time of release, does not attract strict common-law liability, leaving future regulation of environmental hazards primarily to statute.