Liability for neighbor's yard flooding
My house is situated on the lower third of a gradual slope holding 5-6 houses. At the bottom of the slope is a brook, and there is one neighbor between it and my house. My back yard has a natural spring (or very high water table due to ledge). The neighbor, when building his driveway (30+ years ago), cut a deep wedge in the slope to square the bottom of the driveway with about a 10 foot almost vertical wall. The back area of the neighbor's property floods regularly (and has for 30+ years), partly from watershed towards the brook, partly from the water bubbling up on my property. Their septic system recently failed and sewage has surfaced. They are claiming that the water coming from my property caused this failure, and demanding that I repair it. The town says it is my responsibility to divert this water, pumping uphill if necessary, although there is no municipal storm drain to send it to, and the brook does not cross my property. They have a file of complaints against them dating to 1970 (before I owned the house) regarding the condition of their septic system (including an order to replace it), and have only patched it. I feel that they interfered with the natural watershed by cutting out the driveway. What is my liability?