In a landmark, trend setting judgement, the Ireland Supreme Court delivered an important ruling[i] on July 8, 2020 that the dam operator ESB (Electricity Supply Board, https://www.esb.ie/) was guilty of negligence concerning extensive flood damage to buildings on the campus of UCC.
UCC’s action over the damage is among about 400 sets of proceedings initiated against the ESB arising from the flooding. The finding of negligence by four of the five judges has implications for those cases, and wider implications for the ESB’s liability arising from its management of hydroelectric dams in the State. Aviva, UCC’s insurer sought €20m damages for losses at UCC, plus another €14m for losses suffered by other property owners. The Supreme Court had decided it should first determine whether the ESB had a liability.[ii]
The ESB may face a huge damages bill after a hearing to assess damages will proceed before the High Court on a date to be fixed. The extent of damages will depend on the Supreme Court’s decision on a cross-appeal, yet to be heard, concerning whether there was contributory negligence by UCC in relation to the extent of the flood damage.[iii]
Key Facts The case (University College Cork (UCC)–National University of Ireland V/s The Electricity Supply Board) related to the Nov 19-20, 2009 floods when river Lee broke its banks. The dam discharges exceeded 500 cumecs (cubic meters per second) during those days. The river flows through the city, which is “susceptible to both fluvial and tidal flooding”. Cork City, built on Lee’s floodplain, suffered severe flooding. UCC, including 29 buildings on its campus suffered severe damage. The Lee Regulations (first brought out in 1969 and revised several times, but is not a statutory document), an internal ESB document, specifies amounts of water that should be discharged at specified reservoir levels.
In Jan 2012, UCC issued proceedings against the ESB claiming damages. UCC claimed that the ESB was negligent in managing the Inniscarra and Carrigadrohid dams on the river upstream from the city, thus contributing to a significant part of the flooding. The ESB argued, like all dam operators do, that the dams had reduced the water flow that came down to UCC. While denying the charges, ESB interestingly pleaded, in addition, that if it were liable, UCC should be found guilty of contributory negligence and thus have its damages reduced.
In 1949, the Lee Hydroelectric Scheme was approved and was built between 1952 and 1957. The Lee Scheme comprises of two dams (“the Lee Dams”), each impounding a reservoir of water. The power station, dam and reservoir at Inniscarra are located approximately 14km upstream of Cork City. Approximately 13 km further upstream, there is a second power station, dam and reservoir located at Carrigadrohid. The Lee Dams work together for the most part and outflow from the Carrigadrohid Dam is discharged directly into the Inniscarra Damsystem. The normal flow through the turbines when operating at full capacity is 80-85 cumecs.
Based on operational experience, a discharge of up to 150 cumecs from the Inniscarra Dam is considered by the ESB to be that which will remain “in-bank” (that is within the banks of the river). Discharges greater than 150 cumecs are likely to cause flooding.
High Court Verdict The case made by UCC was that the ESB owed a duty to UCC and other downstream occupiers to avoid unnecessary flooding. The ESB should have anticipated the heavy inflow of water that the storm would bring and should have endeavoured to ensure that it had sufficient space in the reservoirs to accommodate the flood waters when they arrive. A substantial part of the damage which UCC suffered would have been prevented if the ESB had done performed its duty. The ESB acknowledged (the same way CWC and dams operators in India typically argue) that it had a duty to downstream occupiers, but only in respect of the risk of dam failure and in respect of the risk of flooding caused by the discharge of water in greater quantities than that which entered the dam systems.
Interestingly, the ESB drew attention to the fact that the powers conferred on it by s. 34 of the 1945 Act, which allowed it to control, alter or affect the water levels of the Lee Dams, required it to exercise those powers “in such manner as the Board shall consider necessary for or incidental to the operation of those works” & that these powers were conferred only to assist in hydroelectric generation and that, flood alleviation is generally incidental to this pursuit.
In India, to the best of our knowledge, no law exists under which dam operators are given powers to alter river water flows for specific purposes for which such powers given. There is also thus no clearly defined powers that any project approval confers on specific operators. This seems to be a major lacuna in India’s legal system.
In a 500 page written judgment dated 5 October 2017 the trial judge (Barrett J.), concluded that the ESB were liable but also held UCC to be guilty of contributory negligence, which he measured at 40%.
The court said that ‘do not worsen nature rule’, derived from the building and ownership of a dam, and it does not address the additional and distinct responsibility attaching to the harnessing of the river flow for industrial purposes.
The judge found ESB had a duty as an occupier to reduce the hazard. The judge held that the duty arose from knowledge of the hazard, the ability to foresee the consequences of not removing it and the ability to reduce it.
The ESB was held to have failed to do what it reasonably could and should have done to mitigate the nuisance. By deliberately releasing water, it had caused damage which could have been avoided or been significantly reduced by heeding weather reports and spilling earlier.
He dismissed the contention that ESB did not create the flood. The court held that, in certain circumstances, a defendant can be liable for a nuisance that he does not directly create. Both sides appealed before the Court of Appeal against the High Court Judgement.
The High Court accepted UCC’s contention that ‘nature’ in this case has been fundamentally altered by the construction of the dams and that the Lee Scheme represented a “new status quo”. The Court held the concept of “pre-existing nature” did not represent the expectation or understanding of downstream residents, in circumstances where it was considered that the Lee Scheme had changed that reality. Distinguishing the other US dam cases cited to the Court, the trial judge followed People v. City of Los Angeles34 Cal.2d 695; 214 P.2d 1 (1950), as judicial recognition of “changed nature” as the new condition to which regard must be had when considering the state of nature.
Barrett J. considered that over the years the ESB had made public representations to the effect that public safety was its utmost priority. He held this voluntary assumption of responsibility was sufficient in itself to create a duty of care.
Court of Appeal The Court considered persuasive the rule that the only duty imposed on a defendant dam-operator in respect of single purpose dams was to avoid making the flooding worse than it would be under natural conditions. The Court rejected the High Court finding that the ‘do not worsen nature rule’ was not applicable in circumstances of long-standing constructions that had permanently changed nature. Both sides appealed against the Appeal Court’s verdict, before the Supreme Court.[iv]
The Supreme Court The main judgment, by Chief Justice Frank Clarke and Mr Justice John Mac Menamin, noted the High Court had found a different management regime of the Lee dams by the ESB would have reduced flooding downstream, including at UCC. In light of the conditions which applied in the immediate run up to the flooding and the relevant water forecasts, the ESB was negligent in not operating a different management of the Lee Dams. They said, on the other hand, the evidence made clear the management of the dams had not made things worse but might be said to have failed to make things better.
This meant the central legal issue was whether the legal obligation of the ESB extended to an obligation to manage the dams, in at least some circumstances, in a manner designed to improve conditions downstream. They found the law imposes a duty to confer a benefit, in this case to downstream landowners and occupiers, by the ESB managing the dams in a way which would give rise to less flooding than would have occurred if the dams were not there. The ESB, as a party with a special level of control over a danger, even though that danger was not of its making, does, subject to certain limitations, owe such a duty and was in breach of that duty, the two judges held.
Mr Justice Peter Charleton, in a concurring judgment, said the findings of fact by Mr Justice Barrett were that the ESB had warnings of a storm, knew the ground was sodden and could have released water earlier to make room in the dam systems for the danger reasonably predicted. He added two caveats which might impact on damages. The first was the ESB’s duty under statute to generate electricity and its liability depends not just on managing the waterway but taking reasonable precautions consistent with the need to create power. The second was, by releasing water earlier to cope with very heavy rain forecast, the ESB may well have flooded UCC and Cork city to some degree which, on the evidence, would have been less than the major flood ultimately caused. Any future damages would be assessed on the difference in the damage of the two floods, he said. Ms Justice Elizabeth Dunne agreed with the majority.
Relevance for India There is a lot of relevance and learnings that we can take from this verdict and this case. The way the Supreme Court and earlier High Court of Ireland dismissed the contention of ESB that it had not obligation to ensure flood moderation in the downstream area is most relevant. The Courts in both instances have argued that the situation for the downstream river is no longer the same after building of dams as without dam situation and existence of dams and capacity to moderate the flows makes it the duty of the dam operator to operate the dam with that objective in flood season.
It can no longer claim, like CWC and dam operators do in India that as long as they are not releasing higher quantum of water than inflows, they cannot be held responsible for floods in the downstream area. The claim of the dam operator that since flood is not created by dam, it has no obligation to reduce it has been rejected by both High Court and the Supreme Court. This is a remarkable precedent.
Its also interesting to see that the courts have agreed that an alternative dam operation was possible to reduce the flood disaster in the downstream area and held the dam operator accountable for not following that alternative when it had all the information available to follow that course of action.
The Irish Supreme Court has also, very interestingly, differentiated between capacity to reduce harm and duty to care for the downstream area.
The High Court judge has held that dam operator had a duty to reduce the flood hazard for the downstream area. The duty arose from knowledge of the hazard, the ability to foresee the consequences of not removing it and the ability to reduce it. Why should Indian dam operators too not be held to this duty?
The case also brings out that in Ireland when a dam is sanctioned, the dam requires permission to specifically change the river flows in the downstream area and such permission also defines to what extent such changes are allowed. In India there is no law that requires such permission and hence there is also no clear definition as to the extent to which the dam operator can change the flows.
Clearly we have long way to go both in terms of improving our dam operation, but also as is clear from this case, for Indian judiciary to take cognition of such case laws and hold Indian dam operators to accountable. We do not have any such case so far.
[i] See relevant court documents: https://beta.courts.ie/view/judgments/3dddd234-f5ef-4977-8acf-8def4b794afc/66387018-9223-476b-a87f-a8adf9ab67d1/2020_IESC_38%20Clarke%20CJ,%20MacMenamin%20J%20(Unapproved).pdf/pdf