In a highly anticipated decision relating to one of the largest oil spills in Nigerian oil exploration, the UK Supreme Court has unanimously rejected arguments that the continuing effects of the spill amounted to a continuing nuisance. Jalla & Anr v Shell International Trading and Shipping Co Ltd & Anr [2023] UKSC 16, may well be welcomed by companies operating in industries which are prone to environmental disasters and is an important reminder of the need to issue claims within the applicable limitation period. However, it is unlikely to stem the increasing impetus behind ESG claims.
Background
On 20 December 2011, during a transfer of oil into a tanker at the Bonga oil field, approximately 40,000 barrels of crude oil were leaked off the coast of Nigeria (the Bonga Spill). While the leak was stopped within six hours, it was alleged that the spill impacted the Nigerian shoreline, causing extensive harm to the local community.
Just under six years after the Bonga Spill, two Nigerian citizens (on behalf of thousands of other individuals and communities said to have been affected) commenced English proceedings in the tort of nuisance. The initial defendants included Shell International Ltd and Shell Nigeria Exploration and Production Co Ltd but four months later, the claimants applied to change Shell International Ltd to another Shell entity - Shell International Trading and Shipping Co Ltd.
The defendants objected to the amendments on the basis that they were made more than six years after the oil spill occurred, and were therefore outside the statutory six year limitation period. However, the claimants argued that, because the oil spill had not been cleaned up properly, the damage to their land was ongoing and amounted to a continuing nuisance. As a result, they said the cause of action was not limited to the events on 20 December 2011, but started afresh each day on a rolling basis, and therefore the amendments were well within the limitation period.
Those arguments were unsuccessful before the High Court and the Court of Appeal, both of which held that the claimants were out of time to amend. That meant that not only could the claimants not bring a claim against Shell International Trading and Shipping Co Ltd, but because there was no longer an English domiciled defendant to anchor the claim to the jurisdiction, the English court lacked jurisdiction over the Nigerian domiciled Shell Nigeria Exploration and Production Co Ltd. The claimants appealed to the Supreme Court.
Private nuisance
The tort of private nuisance is a property tort concerned with the wrongful interference with the claimant's enjoyment of rights over land. As the Supreme Court recently made clear in Fearn & Ors v The Board of Trustees of the Tate Gallery (read more on the Tate viewing platform decision here), the interference can be caused by any means, including a visual intrusion, but it must be substantial, and must be an interference with the ordinary use of the claimant's land. There can be no cause of action unless and until damage has been caused.
The Supreme Court's decision
Lord Burrows, writing for a unanimous bench, accepted that as a matter of ordinary language, the ongoing effects of an interference might be described as a continuing problem or nuisance. However, for the purposes of a continuing nuisance in a legal sense, Lord Burrows concluded that there must be a repeated activity by the defendant or an ongoing state of affairs for which the defendant is responsible, which causes continuing undue interference with the use and enjoyment of the claimant’s land. The interference may be similar on each occasion, but the important point is that it is continuing day after day or on a regular basis. Examples might include the repeated discharge of sewage into a river, as well as the encroachment of tree roots, smoke, noise, smells, vibrations as well as the overlooking that was at issue in Fearn.
Lord Burrows added that continuing control is not a necessary requirement in a case of continuing nuisance, although it will almost always be present given the person who has created the nuisance can be sued even though they no longer have control over the situation that is causing the continuing nuisance.
In relation to financial remedies, Lord Burrows noted that a continuing nuisance also has the consequence that, at common law, damages are awarded for the causes of action that have so far accrued and cannot be award for causes of action which have not yet accrued. Therefore, if the limitation period is six years from the accrual of the cause of action, damages at common law for a continuing nuisance cannot be recovered for causes of action that accrued more than six years before a claim was commenced.
Application to the Facts
Lord Burrows noted that there was no precedent in English law which deals with the question of whether a one-off event, such as the oil spill in this case, can give rise to a continuing nuisance. However, assuming for the purposes of the appeal that it could, he noted that if the claimants were right, the limitation period would be extended indefinitely until the land was restored; the tort of private nuisance would be impliedly converted into a failure by the defendant to restore the claimant’s land; and difficulties might arise in relation to the assessment of damages.
However, in this case Lord Burrows concluded that there was no ongoing nuisance because there was no repeated activity by the defendants or an ongoing state of affairs for which the defendants were responsible. The Bonga Spill was a one-off event. Assuming that the claimants' land had been affected by the spill, the cause of action accrued and was complete once affected – there was no continuing cause of action even if the oil remained on the land.
Conclusion
The Supreme Court's decision marks the end of the road for the claimants in proceedings which have been ongoing for the past five and a half years. By confirming that a failure to clean up an oil spill is unlikely to constitute a continuing nuisance (or, indeed, the effects of an isolated flood), the decision draws a clear line for environmental claims that arise out of catastrophic incidents, and provides a valuable reminder of the importance of issuing proceedings within the relevant limitation period, against the correct defendant.
However, the decision also makes clear that a continuing nuisance can arise if there is repeated activity which causes an interference with the claimant's use and enjoyment of their land. In the context of ESG, that might include claims arising out of greenhouse gas emissions or the repeated dumping of pollutants into waterways and oceans, and we are seeing increasing activity in this area, particularly actions brought on behalf of large groups of claimants. The English courts are therefore likely to continue to see such collective actions, including where the relevant events occurred in another jurisdiction but can be ascribed to the activities of a parent company domiciled in England or Wales.