Drought/Libel. Showing up the cracks

This summer's prolonged drought has put the Water Resources Act 1991 under the spotlight. Lewis Denton wonders how well it stands up to close scrutiny

The unprecedented drought conditions this summer have caused a number of problems for householders, gardeners and local authorities. They have also caused confusion in the legal profession.

While the prompt imposition of temporary hose-pipe bans under the Water Industry Act 1991 was not unexpected the duration of the drought has led water companies to venture into the unfamiliar territory of ordinary and emergency drought orders under the Water Resources Act 1991.

Drought orders suspend some of the obligations on water supply companies with respect to the quality and the consistency of water supplies. They can also be used to vary the terms of water abstraction licences in relation to supplies from rivers and reservoirs.

The water company applies to the Secretary of State for the Environment for a drought order, and has to publish press notices of its application. These allow seven days for objections to be lodged, and if these are not withdrawn the Secretary of State will usually hold a public inquiry or hearing (although there is no obligation to do so). Obviously these inquiries have to be dealt with quickly, often at only four or five days notice. Although the water company is obliged to send objectors a brief statement of their case, their witness's proof of evidence are unlikely to be available until the day the inquiry starts.

This poses unusual problems for objectors and their lawyers.

This is illustrated by a recent case in which Davies Wallis Foyster represented a client in the food manufacturing industry who was notified of an application by Yorkshire Water for an emergency drought order affecting part of its area.

If granted, the order would allow the water company to considerably reduce the mains water pressure to any customer and cut off customers other than hospitals, hospices and livestock farms, on a rota basis for 24 hours at a time.

Yorkshire Water stated that if the order were made these measures would be taken. Technical advice confirmed that if these measures were taken the client's production process would have to be closed down until the order was lifted (it could last up to three months). The Water Resources Act specifically excluded the possibility of a compensation claim by the client.

The subsequent loss of both production and customers was thought likely to have serious implications for the client's business and the employment prospects of its workforce. An objection letter had to be drafted immediately and the basis of our client's objection established. Among others, the following questions arose:

Should we oppose the order completely or just try to gain an exemption?

Should we rely solely on evidence supplied by the client or call in consultants?

What evidence of social or economic issues should be presented?

Would the inspector limit the time allotted for presentation of objector's cases?

Before making an emergency drought order, the Secretary of State must consider whether the deficiency of water supplies “is such as to be likely to impair the economic or social well being of persons in the area”. On this basis we decided to present evidence on both the economic and social effects of making the order.

By the last working day before the inquiry was due to begin we had completed much of the preparation and proofs of evidence (including one from a technical consultant) were being finalised. At that point we received a message that the water company had updated its water supply figures and agreed with the DoE that the inquiry should be postponed sine die.

In such situations legal procedures must move rapidly, and lawyers have to move equally rapidly to protect their client's interest. The effect of implementing a drought order is not just inconvenient but can also be damaging, or even fatal, to businesses that rely heavily on a continuous water supply. They could be forced out of business at the whim of the water company without any right to compensation.

Such powers should only be granted in extreme cases and after full consideration of any objections. However, the speed at which such matters are dealt with inevitably places objectors at a serious disadvantage.

The water company's case may not be revealed to an objector until the start of an inquiry, giving little or no time to prepare cross examination of witnesses and provide technical evidence in rebuttal.

There are few (if any) situations in which so much can be at stake for clients and yet they are given so little opportunity to defend themselves.

If drought orders are to become a familiar part of UK legal practice they need to

be strenuously overhauled.