ABSTRACT
The received civil law on nuisance in England, inherited from the evolution of court-made rules and precedents, regards harmful water pollution as a violation of property rights of others. Most of the litigation of river pollution nuisance cases, in line with tradition for such disputes, takes place in venerable Court of Chancery, and Chancery has a special place in the history of the development and structure of English civil law. Ronald Coase highlighted issues that indicated the centrality and importance of matters of property rights and transactions costs and initiated a debate and discussion leading to the argument known as the Coase theorem. Harold Demsetz thesis, attributed to Harold Demsetz, concerns the structure of legal and institutional regime within which economic behaviour and activity takes place. The new institutional economics provides a further guiding hypothesis in Posners conjecture, which maintains that the evolution of judge-made common law tends towards the development of rules which support or encourage economic efficiency.
