Comparison of Liability Schemes in Hungary & Civil Liability Protocol

1. Regulation of Environmental Liability in Hungary in the Context of the Civil Liability Protocol Gábor Baranyai Ministry of Environment and Water

2. I. Structure of the Protocol • An international liability scheme (Art.s 1-12, Annexes I-II) • Procedures (private international law regime – Art.s 13-20) • Institutional matters (final clauses – Art.s 21-33).

3. II. Analysis Comparison between the Hungarian domestic liability scheme and the international liability scheme of the Protocol. (A)Sources • 1995 Environment Act (amended in 2007 to transpose Directive 2004/35/EC) • 1959 Civil Code (contains reference to civil liability on environmental matters since 1979)

4. (B) Evolution • CIVIL LIABILITY FOR ENVIRONMENTAL DAMAGE • Long history of civil liability for environmental damage • Laid down in the 1959 Civil Code and extended by the 1995 Environment Act • Strict liability regime • Traditional defences (force majeur, 3rd party causation, etc.) • Land owner jointly and severally liable • LIABILITY FOR THE PREVENTION AND REMEDIATION OF ENVIRONMENAL DAMAGE • Introduced by the 1995 Environmental Act • Basic provisions along Dir. 2004/35/EC • Judicial practice: underdeveloped, mainly focusing on civil liability • Results on the ground: groundwater + soil (since year 2000)

5. TRANSPOSITION OF DIRECTIVE 2004/35/EC • The existing administrative liability scheme significantly strengthened in terms of substance and procedures • Four implementing government decrees adopted/amended on • Groundwater remediation • Surface water remediation • Remediation of damage to biodiversity • Emergency response measures • Future: further legislation on financial securities

6. III. Main features of the Hungarian liability scheme (a) Civil (b) Administrative III.1 Scope • The purpose and the scope of application of the Protocol is limited. The Hungarian liability regime has a broad purpose and a universal scope. • Limitations in the Protocol: • Scope of application limited • damage • on transboundary waters • by industrial accidents

7. Environmental damage: • Protocol: “classical civil” instances of damage (loss of life, injury, property, income) + cost of environmental intervention (reinstatement and response measures) • Hungarian law: • Civil law damage: same as in Protocol • Environmental damage: broader than in Protocol (based on Directive 2004/35/EC) • Receiving media: • Protocol: transboundary waters • Hungarian law: any environmental media • Source of damage: • Protocol: accidents by hazardous industrial activities as defined by Art. 2 and Annex I • Hungarian law: any activity that involves the use of any environmental media

8. III.2 Type of liability • Protocol: strict liability as a general rule, traditional defences apply (force majeure, order of public authority, third party causation), fault-based liability for agents • Hungarian law: strict liability applies horizontally • Civil law damage: the defences are narrower than in Protocol • Environmental damage: defences as in Protocol

9. III.3 Financial issues • Limits to liability: • Protocol: limited corresponding to the degree of hazard posed by the activity (Annex II: 10-40 M SDR) • Hungarian law: no limit whatsoever, guiding principle is full compensation • Financial security: • Protocol: mandatory financial security: • Insurance, bonds, other financial guarantees • For the entire period of operation • Hungarian law: Government is authorised to introduce mandatory financial schemes, politically difficult, insurance industry not fully ready