Alberta Property Rights Initiative

Those of us who are fans of property rights often bemoan their absence from the Canadian Constitution. We complain about the government’s failure to include property rights in the Charter of Rights and Freedoms, first in 1982 and then again a decade later. And, given the difficulties of amending the Constitution, we despair of ever securing our property rights. What many of us do not realize is that, although our property rights have lacked constitutional protection, they have throughout most of our history enjoyed another kind of protection: that of the common law.

In this paper, I will describe the common law tradition that has provided us, as individuals, with powerful tools to protect our environments. I will trace the erosion of our common law property rights and make a plea for their restoration. I will also argue that the common law has provided a set of principles that can help us establish efficient and accountable institutions and regulations to deal with problems that it itself cannot solve.

Let us look first at the common law itself. How have common law property rights been used to protect the environment? What has worked? What has not worked? And why?

For centuries, common law property rights have empowered Canadians to clean up and better yet, to prevent pollution. Under the common law, people have a right not only to use their property but also to enjoy their property. They can obtain damages and injunctions against those who violate that right.

Pollution usually violates people’s common law property rights in one of three ways: It may be a trespass, or a nuisance, or a violation of someone’s riparian rights. Let me briefly describe each of these, starting with trespass.

Under the common law, it is a trespass to place anything upon someone else’s property. It does not matter if the substance is toxic or perfectly harmless. And it does not matter if there is a lot of it or just a tiny bit. As a judge in Manitoba explained back in 1921, “every invasion of private property, be it ever so minute, is a trespass.” i

Both landowners and tenants can use trespass law to keep pollutants off their property. Here in Alberta, there have been a number of interesting trespass cases. The best known involved pollution from a lumber company. The story starts back in 1951, when James and Florence Kerr opened a motel on 160 acres of lovely farmland. Seven years later, Revelstoke Building Materials started up a lumber business across the road. It expanded its operations over the years, generating a tremendous amount of smoke, sawdust, fly ash, and noise. Eventually the pollution got so bad that the Kerrs closed their motel. They went to court, alleging, among other things, that the lumber company had trespassed against them.

In 1976, a judge of the Alberta Supreme Court’s Trial Division agreed that the physical invasion of fly ash and sawdust from the lumber company constituted a trespass. He cited a well-known legal reference book: “It is a trespass . . . to cause any physical object or noxious substance to cross the boundary of the plaintiff's land.” ii He awarded the Kerrs $30,000 in damages.

Trespass law prevents direct invasions. For indirect invasions, nuisance law often applies. A nuisance interferes with the use or enjoyment of property. Canadians have used nuisance law to protect themselves from smoke, steam, fumes, foul smells, noises, and vibrations. Cases from the last two decades have involved: emissions from a coal-fired electricity plant, the runoff of manure from frozen farmland, dust kicked up on a road by increased traffic, noise and vibrations from a factory, salt spray from a highway, and odours from a pig farm. Just how sweeping can the law of nuisance be? A judge on Canada’s Supreme Court summed it up back in 1928 when he said: “Pollution is always unlawful and, in itself, constitutes a nuisance.” iii He was ruling on a case from Alberta.

Another branch of the common law is riparian law, or the law governing people living beside lakes and rivers. Under the traditional common law system, riparians have the right to receive water in its natural state. Without their permission, the water cannot be corrupted: It cannot be polluted, or warmed, or discoloured, or even hardened. In the past, Canadians have used riparian rights to fight pulp and paper mill wastes, other industrial effluents, storm-water runoff, and sewage pollution. One riparian even used them to get an injunction against a speedboat race that would have polluted the lake she lived beside.

There is a famous Alberta case about riparian rights called Groat v. The City of Edmonton. Back in the 1920s, the Groats owned a ravine. The stream flowing through the ravine had become polluted. The Groats blamed the pollution on several factors, including the construction of a large storm sewer which discharged into the ravine.

They took legal action against the City of Edmonton. The case went all the way to the Supreme Court of Canada. In 1928, the Supreme Court ruled that the city had violated the Groats’ riparian rights. One judge explained that the city had no right to collect pollution in a sewer and then flush it into a stream: It could not discharge its own filth onto its neighbours’ lands. He quoted an earlier English decision: “If a man chooses to put filth on his own land he must take care not to let it escape onto his neighbour’s land.” iv The court granted damages to the Groats and issued an injunction against the pollution.

Injunctions are the most common remedies in Canadian property rights cases. Judges are reluctant to grant damages instead of injunctions. And with good reason. They understand that they cannot put a dollar value on many injuries. Only the victim himself can know what value he places on clean water or how much money he would be willing to accept for breathing foul air. But the victim does not determine the amount of court awarded damages. In other words, when a court awards damages instead of an injunction, it forces the victim to sell his property rights at its price.

In contrast, injunctions allow the victim to negotiate his own price. If his environment is priceless, he may force the polluter to install abatement equipment, or to change its operations, or, in some cases, even to shut down. Alternatively, if he can tolerate some pollution, he may bargain away some or all of his rights. The important thing is that these bargains are arrived at freely and fairly. They reflect compromises that benefit both the victim and the polluter.

This flexibility is one of the great advantages of the common law system. Common law property rights allow for a whole variety of solutions to environmental problems. Solutions that are specific to a particular time and place. Solutions that reflect the values and circumstances of the directly involved parties.

Another way of saying this is that the common law permits extremely decentralized decision making. I think that that is one of its greatest attributes. I do not believe that remote, centralized governments can make the best decisions about environmental protection. They cannot possibly know about the many uses of a particular natural resource or estimate the value of those uses to local people. They cannot know what the needs and preferences of different citizens might be. Without that information, they cannot foresee the consequences of either permitting or prohibiting pollution. As a result, their one-size-fits-all regulations do not really fit any situation perfectly. And how could they? There is no single best level of pollution for all of Canada, or Alberta, or even Calgary. There is no single solution that suits all communities or all individuals within one community.

The dramatic and perfectly legitimate differences in people’s preferences appear in news stories about the siting of controversial facilities. Most people see potentially hazardous industries as liabilities and do not want them in their neighbourhoods. But others see these same industries as assets. Remember the competition among Alberta communities for a hazardous waste facility? When Swan Hills won the plant, citizens from Riley took out a full-page ad in the Edmonton Journal criticizing the decision!

To be clear, I am not defending that particular siting process. I advocate a process that protects individual rights rather than one that merely satisfies the preferences of the majority. But that is not my point. My point is that some people value the economic development that may come with a polluting industry. They see the industry as providing opportunities for higher paying jobs, for tax dollars to support their schools, for community services, for a better standard of living, or for self-sufficiency. To suggest that these are not legitimate goals would be awfully patronizing.

That said, I should add that, under a system of common law bargaining, people are unlikely to bargain away their rights to a clean environment. The people who might benefit from their proximity to polluters are the same people who will have to bear the costs of the pollution. They and their children will have to breathe the air and drink the water. They will have to live with the smells and sounds. They have a long-term interest in their environment. Their health, the quality of their lives, and their property values are at stake. It is therefore in their interest to negotiate not only compensation but also protection.

Certainly, local people’s incentives to make polluters mitigate their damages are far greater than those of remote governments. Why? There are a number of reasons. Governments have powerful political incentives to degrade the environment. When making decisions about resources, they look for highly visible short-term results that will ensure their reelection. They are subject to lobbying by special interests. They are loath to take on industries that poison the air and water. They are loath to threaten jobs even expensive, temporary, or ultimately counterproductive jobs. Jobs mean votes. And so governments do the expedient thing. They allow and often subsidize pollution. If the effects are concentrated on a few unwilling victims, the political costs are low.

Governments also have economic incentives to permit many kinds of pollution. They, or their crown corporations, are often our worst polluters. A crackdown on sewage polluters, electrical generating stations, or toxic waste dumps would be very expensive for them. Such conflicts of interest drive governments to permit levels of pollution that few affected citizens would tolerate.

The price economic, social, and environmental of governments’ decisions can be exorbitant. But government decision makers do not have to pay the price. Politicians and the bureaucrats they control are not held accountable for making particular decisions: They are neither rewarded for making good decisions nor punished for making bad decisions.

For these reasons, I do not trust governments to protect our environments. I have far more confidence in the people who live in those environments and are directly affected by any changes to them. Armed with strong common law property rights, these people can and will protect the air they breathe, the water they drink, and the land they live on.

In the last pages, I have tried to summarize how common law property rights have worked in Canada and why it is in the environment’s best interest to enable them to continue to work. Of course, there is one obvious question. If the common law is so effective, how did we end up with so much air and water pollution? What barriers have prevented people from using the common law? And do these barriers still exist?

The most formidable barriers to the common law have been created by our governments. They have implemented countless laws, regulations, permits, and licences authorizing activities. When a government authorizes an activity, it authorizes all of that activity’s inevitable results, including any inevitable pollution. And when a government authorizes pollution, those affected by it lose their rights to sue. Parliament, in its wisdom, has overridden the common law. As one judge explained, “The Legislature is supreme, and if it has enacted that a thing is lawful, such a thing cannot be . . . an actionable wrong.” v

It is hardly accidental that governments have conferred what is called “statutory authority” upon polluters and made it impossible for victims to sue. In fact, many laws and regulations have been introduced specifically in response to the threats to industry posed by people exercising their common law property rights. Governments have wanted to dictate what developments can occur where. And so they have removed decision-making power from those affected by pollution and placed that power securely in the hands of politicians and bureaucrats. In other words, they have replaced legal decisions with political decisions.

But assume for a moment that we can get governments to stop overriding the common law. Assume that laws governing polluting industries specified that they did not confer authority to violate others’ property rights that they did not legalize trespasses, nuisances, or violations of riparian rights. Such provisions were common in the laws of nineteenth-century England. If we insert them into contemporary laws, will people rush to court to defend the environment? Or will other barriers still remain?

If we look to the past, we see that a number of factors prevented people from using the courts to stop pollution. Many of these barriers are now considerably lower than they used to be. For example, one problem, historically, was ignorance. People often simply did not know about the adverse effects of pollution. One hundred and fifty years ago, when Torontonians were dying from cholera, people blamed everything from humid air to drunkenness. No one knew that contaminated water was the problem.

Technological limitations also kept people from making cases against polluters. A century ago, it was very difficult to trace pollutants to their sources. In England, people used to actually hire runners to stand outside a factory, wait for a plume of smoke to appear, and then follow the path of the smoke. That was how they had to collect evidence for a court.

Socio-economic factors also limited the use of the common law. Many people accepted polluting industries because they provided jobs. And jobs were often more important than comfort. I recently came across an ad that ran in a Toronto paper in 1912. It promoted a new residential development. The family pictured in the ad was placing its home in the middle of a circle formed by nine factories. The decorative border around the ad was a ring of black soot, which was pouring from eleven smokestacks. Apparently, in 1912, belching factories could be considered assets in working class neighbourhoods.

The cost of lawsuits was another deterrent. And cost remains a problem. Certain legal reforms such as contingency fees and class action suits may make the courts more accessible. And environmental groups may join with victims to take on some of the worst polluters. Across Canada, there are already a number of groups fighting statutory violations. When people’s common law rights to a clean environment are restored, similar groups will doubtless spring up to defend them. Even so, I believe that more generous legal aid is necessary.

To be sure, even if lawsuits become more affordable, we will not all end up in court. Strong property rights will have a preventative effect. The credible threat of a lawsuit will serve as a real deterrent to polluters. But that threat cannot be credible unless everyone rich and poor has access to justice.

Once we get over the cost hurdle, the common law will look more feasible than ever. Today, we are better informed about the health risks of pollution. We have access to far more sophisticated monitoring technology. We are richer. And we place a greater value than ever on a clean environment. I think, therefore, that we are far more likely than our ancestors to use our common law property rights to protect our environment.

Clearly, there are a number of environmental problems that common law property rights cannot help solve. High transaction costs resulting from unavailable information or costly negotiations reduce the common law’s effectiveness in fighting pollution. When many people suffer minor, cumulative damages from many small polluters, no individual has an incentive to sue; each costly suit would bring inconsequential relief. No one, for example, could sue every smog producing driver that passes his home, and suing one or two would not measurably clear the air. Such cases call for government regulations that, in reducing emissions from numerous minor sources, make a major difference in air quality.

Furthermore, people cannot use the common law to protect that which they have no rights to. For example, since no one owns ocean fisheries or the atmosphere, no one has common law rights to defend these resources. In the former case, it would be fairly easy to establish ownership; in the latter case, it would be more difficult. Regardless, unless such rights exist, the common law will not be an effective protective mechanism.

In those cases where we cannot rely on common law property rights to solve our environmental problems, we should nonetheless look to the principles of the common law to help us find the most effective, efficient solutions. In other words, we should incorporate common law logic into our regulatory system.

The best characteristics of the common law include incentives to prevent or clean up pollution, flexibility in achieving these goals, and resulting efficiencies. We should establish regulatory systems that incorporate similar incentives, flexibilities, and efficiencies. Such systems might include quotas for fisheries or tradeable permits for atmospheric pollutants.

Another key characteristic of the common law is the decentralized decision making it permits. Regulations will be most effective if they permit similar decentralization. For example, a reasonable emission standard for Toronto’s cars may well be different than one for the cars in rural Alberta.

Still another key element of the common law is individual empowerment. It is critical that any regulatory regime retain this element. Rather than overriding individual rights, statutes and regulations should explicitly preserve them.

While acknowledging the importance of good regulations, I will conclude with one last plea for the common law. The fact that the common law cannot work everywhere is no argument against using it where it will work. We must be wary of the Nirvana fallacy. As a colleague warns, “perfection is the enemy of the good.” Common law property rights are not a panacea. They are not the perfect solution for every environmental problem. In a great number of cases, however, they are the best option we know. Let us work to restore them and to return to individual men and women the power to protect their environments.

Endnotes

i Boyle v. Rogers, [1921] 2 W.W.R. 704 at 706 (Man. K.B.).

ii Kerr et al. v. Revelstoke Building Materials Ltd. (1976), 71 D.L.R. (3d) 134 at 137 (Alta. S.C.), citing Salmond on the Law of Torts, 15th ed. (1969) at 53.

iii Malcolm Forbes Groat and Walter S. Groat v. The Mayor, Aldermen and Burgesses, being the Corporation of the City of Edmonton, [1928] S.C.R. 522 at 532.

iv Ibid. at 537 8, citing Ballard v. Tomlinson (1885), 29 Ch.D. 115 at 126.

v Canadian Pacific Ry. Co. v. Roy (1901), C.R. [12] A.C. 374 at 389 (P.C.).