A common-sense application of parts of the new contaminated land regime suggests some surprising answers. The Environment Act 1995 creates strict retrospective liability for the cost of cleaning up contaminated land, backed ultimately by criminal sanctions. Those costs may be high and the insurance cover for environmental work is more limited than for other work. Liability should, in these circumstances, be clear. In fact, it is not.
A consultant can only be liable if they are an "appropriate person", which includes anyone who caused or permitted the contaminating substances to be in, on or under the land. In other words, the legislation attributes the lion's share of the blame to whoever put the contaminant in the ground. So, a consultant is liable if they specified its use. Failing to prohibit it may also be enough.
The phrase is not defined but statements made by the government during the passage of the draft legislation indicated that "knowingly permit" meant the person must both know that the substance was present and have the power to prohibit its use. The view on "caused" was that it requires an active operation or, in certain circumstances, a failure to act.
If the consultant in the first example is an appropriate person, then another person who, say, specifies an undersized separator tank that leaks waste oil into the groundwater may be an appropriate person too.
In the second example, common sense suggests that the consultant would be liable: after all, the land would not have been contaminated if they had not done what they did. But since they did not put the contaminant there in the first place, the wording of the act suggests that they would not be an appropriate person.
Which consultant would you expect to be liable for cleaning contaminated land in the following situations?
The difficulties in deciding whether or not a consultant may be liable do not end here. For example, an appropriate person may be excluded from liability if they are carrying out excluded activities. "These include providing engineering or technical advice to a client in relation to an action or omission by reason of which the client is also an appropriate person."
So, if a client, acting on the advice of its consultant, contaminates some land, it rather than its adviser will be the appropriate person. (It is essential to the exclusion, however, that one appropriate person remains, otherwise there is no exclusion.) The guidance to the legislation states that its purpose is to exclude those who have carried out activities that carry such limited responsibility that exclusion would be justified. It must be arguable that innocent failure to prohibit the use of a deleterious material carries limited responsibility.
If the consultant is not an appropriate person (or is excluded) they may still be liable in contract and/or in tort.
For example, if the consultant specified a borehole investigation on behalf of a prospective purchaser and as a result the current owner of the land became liable as the appropriate person (because they had allowed the contaminants to be there in the first place), it might be arguable that the consultant would be liable in tort for losses suffered by the current owner.
Rachel Barnes is a partner in solicitor Beale & Company, www.beale-law.com.