Judicial Conservatism V. Economic Liberalism : Anatomy of a Nuisance Case

When an industrial concern pollutes the environment thereby interfering with neighboring homeowners' use and enjoyment of their property, may the homeowners enjoin the pollution even where compliance with an injunction could force the polluting industry to stop production? Faced with this kind of question the initial reaction of people concerned with protecting the environment against pollution is almost certain to be in favour of granting the injunction. However, the problem has received considerable attention in contemporary legal literature and much of what has been written tends to show that this reaction is both simplistic and somewhat unrealistic.' It is simplistic because an economic analysis of the facts of any given situation-which for want of a better term may be called a "nuisance-situation"-may well reveal that the defendant should be allowed to continue his polluting activity (though other measures should be taken to protect its victims from its effects); it is unrealistic because even if an injunction is granted by the court, means will probably be found to enable the polluting activity to carry on if it is economically or socially desirable for it to do so. The problem, apparently a perennial one in industrialised countries, recently came before the Supreme Court of Israel in the case of Ata Textile Co. v. Schwartz. The judgment of the Court in this case, and the sequel of events following judgment, provide the background for an examination of the problem in the Israeli legal context. In part I of this article we shall examine the economic analysis of the nuisance-situation. Part II will deal with the judgment of the Supreme Court in the Ata case, and the way in which an argument based on the economic analysis was received. In part III we shall present our own critique of the economic analysis as a basis for judicial decision-making in the nuisance-type situation. In part IV we shall review the sequel of events following the Court's judgment in the Ata case and their relevance to the arguments adumbrated in the preceding sections