With the possibility that the current outbreak of Foot and Mouth Disease in Surrey is actually a continuation of the earlier Surrey outbreak, the farming community and its associated industries have now had to weather the financial fall out from at least two outbreaks of Foot and Mouth Disease in six years.
Whereas some compensation is generally available to farmers whose livestock are infected with Foot and Mouth Disease (FMD), or whose animals are involved in contiguous culls, this does not generally extend to those farmers or producers who are affected indirectly by the resulting livestock movement or export restrictions.
The very fact that the origins of an outbreak of FMD tend to be natural or unidentifiable may lead farmers to assume that indirect losses arising from FMD restrictions can never be recovered. However, this is not necessarily true.
Investigations by The Health and Safety Executive and Professor Brian Spratt of Imperial College London have concluded that it is likely that the source of the virus in the current outbreak was one of two biological research facilities in Pirbright. Both facilities (Merial Animal Health Ltd and the Institute of Animal Health) are believed to have been engaged in activities involving the same unusual strain of FMD, later identified in the cattle in the first confirmed outbreaks in Surrey. The conclusions reached may well prove to be sufficiently clear as to make claims for compensation by farmers under the laws of nuisance, quasi-nuisance or negligence more likely to succeed.
The law of quasi-nuisance provides that a person bringing anything onto his land that is likely to cause damage or loss to others in the event that it should escape (e.g. FMD Virus), will be responsible for all reasonably foreseeable damage or loss arising from its escape. The landowner’s liability is ‘strict’ in the sense that it is no defence to show that he was not responsible for its escape. The landowner would therefore be liable whether or not the virus escaped accidentally. It should be noted however that this potential avenue of claim will probably only benefit those who have suffered a loss of animals or other property as a result of the outbreak.
For the purposes of a claim of negligence, one must demonstrate that a duty of care is owed (e.g. to prevent the release of FMD virus), that the duty has been breached (e.g. that the virus has escaped) and that the claimant has suffered a loss as a result (e.g. to property, such as livestock, or a financial loss). The losses claimed must also be reasonably foreseeable.
The operators of both Pirbright research facilities must have been aware of the risks of widespread infection and financial loss resulting from any escape from the FMD virus stocks that they held; particularly in light of:
a. The highly publicised consequences of the 2001 outbreak of FMD; and
b. The Foot–and–Mouth Disease (England) Order 2006.
Thus, it would have been reasonable for both Merial Animal Health Limited and the Institute of Animal Health to have foreseen that livestock movement restrictions and an export ban were likely to follow an escape of FMD virus from their facilities; and that this would result in widespread financial difficulties amongst farmers and associated industries alike.
Claims for compensation arising from an outbreak of FMD have been before the Courts before. Perhaps surprisingly, the case of Weller & Co. v Foot and Mouth Disease Research Institute (1961) involved an escape of FMD from a research facility on the same Pirbright site that is the suspected source of the current outbreak.
The 1961 Weller & Co case concerned a claim for compensation by livestock auctioneers affected by the 1959/60 outbreak of FMD. However, in this landmark judgment, the Court held that the auctioneers’ losses were not recoverable; even though they resulted from market closures following the FMD outbreak. Financial losses would only be recoverable where a plaintiff had also suffered loss or damage to property as a result of the outbreak (e.g. infected or culled livestock), or where at the time of the negligent act (i.e. the release of the virus), there was a foreseeable risk of such loss or damage occurring to the plaintiff’s property. While the auctioneers had clearly suffered a loss, the court determined that this was purely loss of income, rather than loss or potential loss of property.
This decision was undoubtedly very disappointing for the auctioneers. However, the principles established in the Weller & Co. case opened the door for the first time to claims for compensation for financial loss; not only by those directly affected by loss of livestock, but also by those who suffered no loss of livestock, but who had faced a ‘foreseeable risk’ of loss of livestock following the escape of FMD.
What remains to be determined is the extent (geographical or otherwise) to which the risk of infection following the escape from the Pirbright facilities was ‘foreseeable’. In light of the geographical extent of the 2001 outbreak, this has the potential to be interpreted widely. Indeed, it is worthy of note that the HSE report also concludes that the Pirbright research facilities are highly likely to have been the source of the recent outbreak of FMD in Normandy.
There remains a possibility that the Courts may, as a matter of public policy, seek to limit the extent of the liability of the Pirbright research facilities in the current FMD outbreak. However, that is far from certain and would probably involve a significant change to common law principles that have been developed over the last half century and longer.
On the basis of the current case law however, it would appear that livestock farmers in the vicinity of the 2007 outbreak, and quite possibly those further afield, may be in a strong position to recover financial losses arising from the various restrictions imposed in the wake of the current FMD outbreak.
Businesses in industries associated to agriculture (such as livestock markets, livestock haulage etc…) have also clearly suffered substantial losses from the restrictions imposed as a result of the FMD outbreak. The recoverability of losses suffered by businesses in these associated industries is less clear and will depend upon the individual circumstances of the business concerned. However, depending upon those individual circumstances, the possibility remains that claims for compensation made by such businesses may succeed.
If you would like further information, please contact Paul Rice (Partner – Farming & Rural Business Team) on 01926 880777 or Richard Lane (Partner – Commercial Disputes) on 01926 880707.
