In the nineteenth century, as Britain moved through the industrial revolution, a largely rural economy was rapidly transformed into an urban one. Birmingham's population jumped from 60,000 in 1800 to 250,000 by 1850. Other smaller towns in the British Midlands saw similar population leaps as textile mills, metal and machinery manufacturing, coal mining and smelting dramatically expanded. Urban populations became unprecedentedly dense as migrants moved or were pushed off the farm with enclosures to become factory workers. Among other things, the urban population needed fresh water and a way to dispose of vast quantities of human and industrial waste. At the beginning of the century the science of controlling disease and providing clean water and the civil engineering of supplying it and of disposing of concentrated sewage were primitive. With concentrated populations, cesspools and local wells comingled and sanitation conditions deteriorated. Town councils in the new urban centers struggled to find solutions with limited infrastructure and budgets. Where implemented, sewage waste treatment involved releasing waste waters over sewage “farms” to allow the water to percolate through subsurface strata to be cleansed before returning to the watershed. Sewage treatment infrastructure was costly and overrun by population growth; urban governments had inadequate budgets for expansion; sewage treatment knowledge was limited; and effectiveness of sewage farms depended upon soil type, elevation, and other conditions. As a result, as the nineteenth century progressed raw sewage and industrial waste increasingly were dumped into Britain's rivers and streams. This fouling of water basins directly harmed downstream land owners, and they often turned to the local Chancery Courts for remedy against this sewage-based nuisance.
This valuable study by Leslie Rosenthal of externalities and institutional development for mitigation includes case studies of major industrializing centers, as well as smaller towns. Rosenthal identifies a dilemma that faced the courts: how to protect the property rights of downstream land owners from nuisance, while not closing down sewage systems in tightly- packed urban centers and the economic growth and opportunity they provided. He uses primary sources, follows the actions of the disputants, and places his discussion within the literature of law and economics.
In Chapter 1 Rosenthal lays out the dilemma; Chapter 2 provides an overview of health and sanitation developments in mid-nineteenth century Britain along with a short discussion of the small size and jurisdiction of local urban governments and administrations. The Public Health Act of 1848 called for Local Boards of Health to be established to manage local facilities. These boards often were the defendants in the nuisance cases described later in the book. Chapter 3 describes growing river pollution as a tragedy of the commons, the gradual adoption of new pollution-control standards, and sewage treatments that were to rely upon best practical and available methods and technologies. Chapter 4 outlines nuisance law as interpreted by local Chancery courts. Town councils and boards claimed that stopping the discharge of sewage and industrial wastes would result in immense social and economic damages. The options of the courts were to issue injunctions to halt the release of sewage, to award damages for existing harms, and to sequester the assets of the town boards. Rosenthal argues that although the courts generally issued injunctions and in some cases, sequester orders, they allowed for delays and contingencies that effectively incorporated a weighing of costs and benefits. The courts acted as referees and managers of the process of sewage and industrial waste disposal. Hence, most of the ten cases examined in the book are protracted ones whereby sewage release continues for long periods and landowners repeatedly return to the courts for remedy. Rosenthal concludes that this record is in line with the notion that court rulings generally advance efficiency.
The evidence presented for the cases in Chapters 5–10 appears to be consistent with this argument. Rosenthal also briefly discusses Coasean bargaining to resolve the conflict, but he notes that successful private negotiations leave little public record. It seems likely that in some cases, the buyout of riparian land holdings would have been the low transactions cost alternative to lengthy litigation. Rosenthal might usefully have discussed the transactions costs of the third option, Parliamentary intervention as discussed in Chapter 10. In this case Wolverhampton attempted to obtain statutory relief. Clearly, there would be bargaining costs and lobby expenditures to achieve Parliamentary action. The other nine cases involve the Chancery courts and Birmingham, Leeds, Barnsley, Leamington Spa, Tunbridge Wells, Harrogate, the St Helens Canal and Railway Company, Northampton, and the Brinsop Hall Coal Company.
The comparative case studies reveal the various remedies available to land owners, but there is no framework to assess why solutions differed. Such a framework would have been worthwhile early in the book and could have included variables like the value and number of downstream properties, size of the pollution release and city size and growth rates, soil type and options for treatment, diversion possibilities, and number of urban centers polluting a particular stream.
Key conclusions also seem unwarranted by the evidence. The strongest one is that nuisance law is ill equipped to protect the environment. Rosenthal, however, argues that the courts weighed important costs and benefits in applying nuisance law. It seems that at the time the environment was less critical than were the opportunities provided by industrialization. He claims that statutory interventions were needed, but Parliament did little, perhaps like the courts, it was weighing costs and benefits.
