Introduction

On 18 October 2022, a reserved judgment was handed down by Mr Justice Bourne refusing permission to apply for judicial review in a claim issued by Wild Justice against the Water Services Regulation Authority (“Ofwat”), following an oral permission hearing on 27 September 2022. Wild Justice is described in the judgment as “a not-for-profit company set up to advocate on behalf of wildlife to further nature conservation in the UK, to encourage public participation in nature conservation issues and to ensure that UK laws, policies and practices protect wildlife” (at para.4). It has previously brought a challenge – which was dismissed at a substantive hearing – to three general licences issued by Natural Resources Wales in 2020 for the killing or taking of wild birds.

The present claim was issued in May 2022 in the context of the planned and unplanned discharge of untreated sewage into rivers and other water bodies by water companies, which has recently been the subject of considerable press and public attention. The issue is discussed in a previous post on this blog by Brendan Brett.

The claim and the legal framework

The essence of the claim, as summarised in Wild Justice’s letter before action, was that there had been a “lack of action (including monitoring and enforcement action) in relation to the planned and unplanned discharge of untreated sewage into rivers and other water bodies” and that “Ofwat is unlawfully taking an entirely passive stance…including taking no steps to obtain information relating to compliance”. 
Wild Justice alleged that Ofwat had failed to comply with its duty under s.2(2A)(b) of the Water Industry Act 1991 (“the 1991 Act”) to “secure that the functions of a water undertaker and of a sewerage undertaker are properly carried out”. 
Those functions include duties under s.94 of the 1991 Act to:

“provide, improve and extend such a system of public sewers … and so to cleanse and maintain those sewers … as to ensure that the area is and continues to be effectually drained”; and

to make provision for the emptying of those sewers and such further provision as is necessary … for effectually dealing … with the contents of those sewers”. 

Further duties on water and sewerage undertakers, expressed to be “supplemental” to the duty in s.94 of the 1991 Act, are set out in the Urban Waste Water Treatment (England and Wales) Regulations 1994 (“the 1994 Regulations”) and include a duty under reg.4(2) to ensure the provision of collecting systems (sewers) which satisfy certain requirements as to design, construction and maintenance and a duty under reg.4(4) to ensure that urban waste water entering collecting systems is treated before discharge.

There is a complex system of overlapping regulatory duties in this area, with the Environment Agency (“the EA”), Natural Resources Wales, Natural England, the Drinking Water Inspectorate, the Welsh Government and the Department for Environment, Food and Rural Affairs all sharing responsibility for the regulation of the water and sewerage industry in England and Wales. In particular, the EA has responsibility for granting environmental permits which enable and regulate the discharge of sewage into watercourses by water companies.

The grounds

The claim was brought on four inter-related grounds, which Wild Justice argued were distinct breaches of the law. The judge disagreed, noting the considerable overlap between the grounds and dismissing them all for broadly the same reasons.

An important feature of the claim and the reasons for its dismissal was the generality by which the claim was put: as the judge noted at para.16 “the accusation of a failure to act is put in a general or generic way” and “the Claimant has not identified any specific action which the Defendant should have taken and has failed to take”. In that context, given the judge found that there was evidence Ofwat had taken some action which related in part at least to compliance with reg.4 of the 1994 Regulations it was simply not arguable that Ofwat had not turned its mind to compliance with its statutory duties or had entirely failed to perform them (at paras.51-52). Given the way the claim was pleaded, the judge left open the question of whether Ofwat had discharged its duties in a sufficient or satisfactory way, as no specific, individual failure to comply with any particular duty was alleged.

With regard to the specific grounds raised:

Ground 1 alleged the unlawful taking of a passive stance in relation to the enforcement of the obligations in the 1994 Regulations including taking no steps to obtain information relating to compliance with those obligations from water companies (at para.31). 

In response, Ofwat relied on various kinds of routine monitoring which may uncover non-compliance with such obligations and may lead to further information being requested or enforcement action being triggered (which would then be pursued by the EA). It also relied on a letter of 18 November 2021 to water companies requiring them to state the causes of non-compliance with certain conditions in their EA permits, which Ofwat considered could potentially be leading to significant numbers of unpermitted storm overflow spills. Ofwat also referred to enforcement action against five water companies which was begun before Wild Justice’s letter before action was sent and required the provision of information about compliance with s.94, including but not limited to breaches of regs.4(4) and 5 of the 1994 Regulations.

The judge agreed with Ofwat that these examples showed that Ofwat had not taken an entirely passive stance or entirely failed to take action. He dismissed Wild Justice’s argument that the actions taken by Ofwat were connected with the general obligations in s.94 rather than the specific obligations in reg.4, finding that there was a clear connection with the actions taken by Ofwat and the duties in reg.4 of the 1994 Regulations.

Ground 2 alleged the unlawful failure by Ofwat to collect information in relation to the performance of obligations under the 1994 Regulations, in breach of s.27(2) of the 1991 Act.

Ground 3 alleged the unlawful failure to secure that the obligations of water companies under the 1994 Regulations are properly carried out as required by s.2(2A) of the 1991 Act.
Both these grounds were summarily dismissed by the judge on the basis that there was evidence that Ofwat had collected information and had taken enforcement action. It was therefore not arguable that Ofwat had simply failed to do those things (at para.60).

Ground 4 alleged that Ofwat had misdirected itself in law that its regulatory obligations could be discharged by reference to data collected by the EA and steps taken to investigate breaches of environmental permits. 
This ground was also dismissed for the same reasons as grounds 1-3. In the judge’s view ground 4 was, like the other grounds, based on the proposition that the data and investigations which led to Ofwat’s enforcement action were “entirely unrelated” to the 1994 Regulations (at para.63), when he had found that these investigations were at least in part related to the duties in reg.4 of the 1994 Regulations. In addition, the judge held that he was unable to go behind the claim by Ofwat that it uses information from a number of sources and of a number of kinds as a potential trigger for enforcement action, not just data from the EA or relating to environmental permits. Without any evidence from the Claimant to demonstrate that this claim by Ofwat was false, the judge held that he had no proper basis for going behind it (at paras.54 and 64).

Comment

This decision, while brief, will be of interest to those working or advising in the field of water regulation as it considers one piece of the complex jigsaw of the overlapping regulatory requirements of the different regulators of the water industry. There may be further guidance on the issue from the Court of Appeal in due course: Wild Justice has announced its intention to apply for permission to appeal the dismissal of its claim by Mr Justice Bourne.

This is also the first case where the Office for Environmental Protection (“the OEP”) has made submissions as part of a judicial review claim, essentially adopting an intervenor’s role to assist the court. There was some suggestion by Ofwat during the High Court proceedings that the OEP’s decision to investigate a complaint regarding the failure of the Secretary of State, the EA and Ofwat to effectively regulate water companies’ duties to manage sewage was relevant to the exercise of the court’s discretion as to the grant or refusal of permission for judicial review and should lead to the refusal of such permission (because it lessened the importance of, or public interest in, the proposed judicial review claim). Submissions made on behalf of the OEP emphasised the differences between an OEP investigation and a judicial review, which suggests that such an investigation should not be a deterrent to the pursuit of a judicial review claim on a specific issue. Previous blog posts on the enforcement role of the OEP can be found here and here. 

Ultimately, the claim was found to be unarguable mainly on the basis that it was made in terms which were too general. The judge clearly disparaged this approach, referring to the “sweeping terms” in which the claim was put (at para.51). He could not find that Ofwat had “discharged its investigation and enforcement duties in a sufficient or satisfactory way” as there was no specific alleged failure to comply with the legal duties, only an allegation that these had not been carried out at all (at para.53). Wild Justice had also not demonstrated that the information gathered by Ofwat in different ways, including routine monitoring, was irrelevant to the potential enforcement of obligations in reg.4 of the 1994 Regulations, which meant the judge was unable to go behind Ofwat’s assertion as to the compliance of such information gathering with its legal duties (at paras.54 and 64). There may still be scope for a narrower claim to succeed against Ofwat in the future, for example if brought against a failure to gather information or enforce duties in a specific case.

Esther Drabkin-Reiter is a barrister at Francis Taylor Building specialising in environmental, planning and public law. She is the co-commissioning editor of this blog.