Inclement weather conditions caused by climate change is not an uncommon phenomenon, as demonstrated by the North Yorkshire floods on 19 June 2005, the floods in New Orleans and now Hurricane Wilma, which has grown into a category two storm with winds of over 110mph.
With weather conditions worsening, local authorities, property owners and insurers are bracing themselves for the prospect of floodings.
The North Yorkshire floods were attributed to the fact that a month’s rainfall fell in under three hours – that is the equivalent of 70mm. Quite simply, flood defences failed, surface water drainage was overwhelmed and the River Rye broke its banks.
These meteorological conditions are not unusual, although they are surprising at the height of summer. However, as the bad weather sets in we must once again address the management of this risk by local authorities, not only in terms of their own housing stock, but also in terms of managing flood defences within their areas.
This issue is an increasingly difficult problem, since a number of property owners are finding it more and more difficult to obtain insurance cover in high-risk areas.
Flood insurance is an ongoing dilemma for the insurance industry.
The Association of British Insurers (ABI) continues to campaign for more government funding to improve flood defences, but every year the insurance industry meets liabilities of between £500m and £1bn in claims.
After the unprecedented floods in the autumn of 2000, the insurance industry committed to a two-year agreement on the availability of flood insurance for existing domestic properties and small businesses. This was replaced by the ABI’s statement of principles on the provision of flood insurance.
In brief, under the policy ABI members would continue to provide flood insurance for existing customers in areas where the Government has committed to bringing defences up to a minimum standard by 2007.
However, the premiums charged and excesses applied reflect the risk of flooding. Sadly, in a number of locations the risk of flooding is too high and the existing flood defences are so outdated that many houseowners and small businesses are unable to obtain insurance or, alternatively, cannot afford to do so.
Other properties are situated in locations where no improvements to flood defences are planned and in these cases insurers are not able to guarantee cover.
Clearly there has to be further governmental response to this risk along with a substantial redevelopment programme. The Government has raised annual spending so that by 2005-06 it would have reached an annual uplift of £150m, and has indicated that it would sustain this level of funding until 2008. While this is an improvement, it is still insufficient to meet the rising costs associated with this risk and the burden on local authorities is becoming increasingly onerous.
Incidents such as the North Yorkshire floods cause a range of difficulties for the public sector. Local authorities have to respond accordingly with clean-up operations and roads and bridges have to be rebuilt. Money is therefore diverted away from other uses. It is alleged that the North Yorkshire floods could cost North Yorkshire County Council and Hambleton District Council more than £3m.
The insurance industry works closely with local authorities in responding to floods, but with outlay running so high and with areas suffering repeated flooding due to inadequate drainage systems, insurers are looking for sources of recovery. Inevitably both they and individual property owners may seek redress from local authorities, particularly when floods are exacerbated by outdated culverts and drainage systems.
Local authorities have been held liable for a wide range of flood-related litigation, including failing to enlarge culverts which have become too small to cope with the surface water entering them, constructing roads but failing to provide adequate culverts for surface run-off and failing to adequately clear and maintain grids in culverts.
In an increasingly litigious society this is a genuine concern, particularly when many local authorities are self-insured or are subject to large excesses.
It is difficult to see where a happy medium can be achieved between property owners, statutory undertakers, insurers and local authorities. Without increased public funding to improve flood defences, the forecast is not good.
It is inevitable that, with climate changes, claims will continue to rise. The courts continue to strive to create a fair balance between the interests of house-owners and those of customers and the general public. However, where there is a known nuisance and it is adopted by a local authority, there is a serious risk that the local authority may be vulnerable to litigation. While it is promising that the Government continues to pledge increased funding for flood defences, for many it is likely to be too little, too late.
Carys Oatham is an associate in the public sector group at Weightmans