The nineteenth century decision of Rylands v Fletcher epitomises the continuing struggle between two opposing viewpoints of liability for industrial enterprises: strict liability based on the internalization of external costs, and a more laissez-faire fault-based approach. Subsequent confusion about the true nature of Rylands v Fletcher is due to the fact that the decision in fact contains two rules, a narrow one based on nuisance liability between neighbouring landowners, and a wider one based on liability for escapes from potentially dangerous activities.
English and Australian judges have, over the past few decades, severely questioned the juridical distinctiveness and utility of the rule in Rylands v Fletcher. The uncertainties surrounding Rylands v Fletcher have resulted in a chequered history in common law jurisdictions. In Australia the rule has been discarded, preferring to expand the law of negligence to capture the rule's former territory. While jurisdictions such as Canada, Ireland and New Zealand have tended to follow the lead of the recent decisions of the House of Lords in confining the rule to a narrow species of nuisance liability. In the United States, however, the wider rule has had more success. Strict liability should have a role to play and is consistent with the polluters pay principle, but in England and Wales it is now likely to be achieved only by legislation rather than case law.
the rule in Rylands v Fletcher and the law of private nuisance can be seen to be quite different creatures. It also argues that there is strong case for the rule's continued vitality, and that it would be a grave mistake to abandon it in favour of a yet more expansive law of negligence.