Environmental Liabilities and the Professions

1. Environmental Liabilities and the Professions Valerie Fogleman Partner and Head of Environmental Liability Group Barlow Lyde & Gilbert solicitors, London

2. Types of pollution liabilities • remediation of current and future pollution incidents/offences • remediation of historic pollution incidents • common law claims Professions at risk • surveyors • accountants • solicitors • brokers • environmental consultants

3. Remediation of Current and Future Pollution Incidents/Offences Unauthorised water pollution Unlicensed disposal of waste Pollution prevention and control • site condition survey

4. Remediation of Historic Pollution Incidents Part IIA of Environmental Protection Act 1990 • remediation required whether or not contaminated land is to be developed • does not supersede planning regime • primarily administered by local authorities with Environment Agency or Scottish Environment Protection Agency for “special sites” • local authorities’ strategic plans for inspecting their areas: 1 July 2001 (England), 14 October 2001 (Scotland) and 1 October 2002 (Wales)

5. Local authorities must inspect their areas for “contaminated land”, that is, land which, because of substances in, on or under it: “significant harm is being caused or there is a significant possibility of such harm being caused; or pollution of controlled waters is being, or is likely to be, caused”

6. Pollutant linkage • source or potential pollutant • pathway • receptor or target (people, domestic and commercial animals and crops, wild animals subject to hunting and fishing rights, buildings, designated ecological areas and controlled waters) Contaminated land + pollutant linkage = significant pollutant linkage

7. Risk assessments and remediation standard based on current and likely use of site not requiring planning permission

8. Identification of “liability group” of “appropriate persons” for each “significant pollutant linkage” Class A persons: “caused or knowingly permitted the substances … by reason of which the contaminated land in question is [contaminated] land to be in, on or under that land”

9. Cause • strict liability Knowingly permit presence of pollutant • knowledge • power • time

10. If Class A person not “found” after “reasonable inquiry” Class B persons: “owner or occupier for the time being of the land in question” but only liable in respect of owned or occupied land

11. Exclusion tests designed to shift liability to most recent “knowing permitter” Apportionment criteria designed to impose several not joint and several liability Attribution of responsibility between liability groups Hardship and other considerations

12. Exclusion tests for Class A persons 1. Excluded activities 2. Payments made for remediation 3. Sold with information 4. Changes to substances 5. Escaped substances 6. Introduction of pathways or receptors

13. Three month consultation period for “voluntary” remediation If voluntary remediation; remediation statement If no voluntary remediation; remediation notice Fines for non-compliance with remediation notices; up to £20,000 plus up to £2,000 per day for industrial, trade or business premises No defences but 24 grounds of appeal Remediation notice suspended during appeal

14. Common Law Claims Negligence Rule in Rylands v. Fletcher Private nuisance Public nuisance (Trespass)

15. Professions at Risk

16. Surveyors Management of client’s estate or property • direct liability for environmental offence, remediation costs or common law damages • negligent advice resulting in client being liable for environmental offence, remediation costs or common law damages Valuations of property • negligent advice resulting in incorrect valuation of property due to contamination

17. Agency work • negligent advice resulting in client inadvertently becoming liable due to acquisition of freehold or leasehold interest in contaminated property • negligent advice resulting in client retaining remediation liabilities when disposing of contaminated land • leases • common covenants

18. Accountants Failure to take account of environmental liabilities when valuing company Failure to account for environmental liabilities under Financial Reporting Standard 12 Appointment as receiver or liquidator • some protection from Part IIA liabilities for insolvent company with assets including contaminated land • conflict between insolvency law and environmental law

19. Solicitors Law Society’s warning card on contaminated land liabilities Failure to: • advise client of potential environmental liabilities in residential or commercial transaction • recognise that contaminated land liabilities have been shifted to (or remain with) client • recognise environmental significance of lease provisions • conduct adequate environmental due diligence • prepare adequate contractual provisions to allocate liability • obtain necessary permit or other approval for client • ensure permits are transferred when facility/land is sold

20. Brokers Failure to retain policies against which environmental claims are made Provide incorrect advice about insurance cover for environmental claim

21. Environmental consultants Failure to advise client of presence or nature of contamination Provide incorrect advice due to misunderstanding environmental law Cause contamination during investigatory or remedial work