Environment

The main legislation referring to contaminated land is the Environmental Protection Act 1990, Part IIA. Its key importance is the introduction of retrospective liability for contaminated land. This could obviously affect landowners, buyers, developers and those who lease land. This will cover the private sector (speculative developers) and the public sector (development agencies). As with all legislation there has been much speculation as to its application and as usual the only answer is case law.

What is contaminated land?

The simple answer is that no one knows and its definition is undefined and undecided. There is guidance within the act but it is so general that virtually anything could fall within the definition. This means that anyone involved in the chain of land ownership needs to take extreme care, and the remediation of “potentially contaminated land” has become a major issue in all developments.

The implications

A key concern is that regulators (local authority, Environment Agency, Scottish Environmental Protection Agency) can place a contaminated land notice on your land and force the landowner into remediation, at significant costs. The traditional option of excavating contaminated soil and transporting it to a landfill site, known as “dig & dump”, is fast disappearing because of increasing disposal costs. The situation has been exacerbated by the implementation of the EU Landfill Directive, in 2004, which makes it difficult to dispose of contaminated soils, because hazardous and non-hazardous waste can no longer be deposited on the same landfill site.

This is not the end of the story. This year has heralded ever more stringent criteria for the acceptance of waste at landfill sites. Our friends in the EU have now complicated matters with a judgment that infers that all land that has been contaminated to the point that the soil is of no practical immediate use without being decontaminated is technically a waste site.

Case law

The first trial in the UK under Part II of the Environmental Protection Act (The Circular Facilities (London) Limited vs Sevenoaks District Council) in 2004 found a developer liable for the remediation costs of land purchased and then sold to private residents after redevelopment.

Liability for remediation costs is not restricted to those who have introduced contaminants but anyone who knowingly permits the continued presence of contaminants (even if they have no detailed knowledge of them).

In this case, clay pits had been dug on a site that had previously been used as a brickworks. In the period up to the end of the 1970s, while a Mr Kinchen-Goldsmith and then Mr and Mrs Scott owned the land, the clay pits were landfilled with a variety of wastes, including organic wastes.

Virtually anything could fall within the definition of contaminated land

Mr and Mrs Scott sold the land to Circular Facilities in 1979. Mr Scott and Circular Facilities entered into an informal arrangement under which Mr Scott was responsible for redeveloping the site. Working with an architect employed by Circular Facilities, Mr Scott obtained planning permission on behalf of Circular Facilities to build eight houses on the site.

Subsequently significant quantities of landfill gases were found to be emitted and the council, at its own cost, put gas protection measures in place. Following environmental consultancy after the new regime came into place, the council served a notice on Circular Facilities for being a “knowing permitter”.

An appeal was unsuccessful, with the court stating that Circular Facilities could have investigated the risk and taken measures to remove it. Their failure to deal with the landfill gases meant that it had knowingly permitted their presence. It was not necessary for a person to have introduced, or knowingly permitted the entry of the contaminants; knowingly permitting their continued presence was sufficient.

What to do

Those buying, selling or redeveloping properties or sites need to have a robust approach to environmental risk, which should encompass risk assessment, contractual, lease and insurance protection, in combination with due diligence. The following should be considered:

Gaining advice on the possibility of contamination and its implications

Making specific documented enquiries of the seller

Making enquiries of statutory and regulatory bodies

Instructing a thorough site investigation (independent)

Considering contractual protection, including insurance

Getting specialist legal advice

Warranties and indemnities are likely to take on even greater significance in the future.

The trail of evidence will be crucial in demonstrating that suitable and sufficient steps have been taken by all those involved in the purchase and retention of land.

And don’t forget other legislation such as:

Water Resources Act 1991

Groundwater Regulations 1988

Pollution Prevention and Control Regulations 2000

In conclusion, purchasers of land need to ensure that they embrace due diligence in its widest context, including the use of risk assessment techniques. If in any doubt then a site investigation or testing should be part of the project plan.