Case Law Update: Contaminated land liabilities

The framework of England’s contaminated land regime (“CLR”) is set out in Part IIA of the Environmental Protection Act 1990. The regime sets out the local authority’s duty to inspect their area for, and for regulators to identify and investigate, potential “contaminated land” and determine those responsible for its remediation. They then have powers to serve remediation notices on those responsible or to undertake the remediation and recover the costs from the responsible parties, if they are not satisfied that the remediation will be undertaken voluntarily.

CLR has been in force since 2000, though the statutory guidance and technical documents that support CLR have been revised periodically since that time. However, in the intervening years there has been very little caselaw to elaborate on some of the key concepts of the regime.

There are two recent cases which are relevant to CLR. One is the appeal of a remediation notice served on a developer and the other relates to the liabilities of a council for a landfill site operated by its statutory predecessors. The latter case is of interest both to local authorities and those who may have former council landfills on their land.

Update on appeal of CLR remediation notice

We are still awaiting the Secretary of State’s decision on the appeal by Jim 2 Ltd against a remediation notice served on them. The appeal was heard in December 2015 but, more than a year later, there is still no decision. Since there has only been one other appeal of a remediation notice in the 16 years of CLR, the decision is likely to be of significant interest.

The remediation notice relates to a development of 69 houses in Willenhall, Walsall. The site was formerly a gasworks, which led to its contamination with polyaromatic hydrocarbons, specifically benzo-a-pyrene (BAP) which is a carcinogen. The site was developed in the 1970s by Jim 2 (then MacLean Homes) and another developer, which has subsequently been dissolved.

Investigations began into the site around 2008 and in March 2015 Walsall Council served a remediation notice on Jim 2. The grounds of appeal included whether the Council had unreasonably determined the land as contaminated and whether Jim 2 was the appropriate person to bear responsibility for the remediation, whether the Council (whose predecessor had owed the site and obtained outline planning permission for the development) acted reasonably in discounting itself from having any liability for remediation and whether the remediation requirements were reasonable.

This case illustrates again how painfully slow it can be to deal with sites under CLR. More than 8 years after the site was first investigated, remediation of the site remains uncertain, with the obvious knock-on effects on those involved, including the residents and the saleability of their houses.

CLR liabilities of local authorities for their predecessors

In Price and Hardwicke v Powys County Council [1], the court considered whether Powys CC was liable under CLR for the activities of its predecessor council, who had operated a landfill site. This landfill had closed before Powys CC had been created in 1996, under a local government re-organisation. The landfill operations had been undertaken on the applicant’s land under a series of leases.

When CLR came into force in 2000, it imposed primary liability for remediation of contaminated land on parties who had “caused or knowingly permitted” contamination and, where such parties could not be found, the liability for clean up fell to the current owner or occupier. Powys CC (having initially taken steps to manage leachate issues on the site) informed the landowners that Powys CC was not responsible for the site and it was the landowner’s responsibility.

In denying responsibility for the landfill, Powys CC relied on a 2007 House of Lords judgement [2]. In that case, the House of Lords held that National Grid (and their predecessor British Gas plc) were not “causers or knowing permitters” of contamination on a town gas production site that had been owned and subsequently sold by National Grid’s statutory predecessor 20 years prior to privatisation, when British Gas plc was formed. In that case, the legislation which created the state-owned gas utility and then the privatised gas company, passed to the successor body the liabilities “immediately before” the transfer date. The House of Lords held this was not broad enough to pass on liability which was not created until the introduction of CLR over 20 years later. In reaching this conclusion, the Lords noted that to broaden the interpretation of the liabilities that National Grid were responsible for, to include those which were not in existence or contemplation at the time of privatisation, would falsify the basis upon which the public were encouraged to invest in British Gas plc.

However, in Price and Hardwicke, the court distinguished the 2007 case and declined to follow the same reasoning. The court held that Powys CC was responsible for the actions of its statutory predecessors and, if this site were legally determined to be “contaminated land” under CLR, Powys CC could therefore be found to be a “causer” of the contamination and so liable for remediation required. The court noted that, unlike in the National Grid case, the liabilities passed to Powys CC from its predecessor bodies were not limited to those “immediately before” the transfer date.The court noted that there had been no case previously decided where “liabilities” in transfer orders creating new statutory bodies had been interpreted so widely as to include liabilities arising from a change of law after the date of the transfer. Nonetheless the court held that this very wide interpretation was justified on the basis that the tenor of the statutory transfer was that the public should be no worse or better off after the local government reorganisation and “should be able to look to Powys [CC] precisely in respect of those matters which it could look to [the predecessor council]”.

The court also found that it was able to exercise its discretion to make a declaration in favour of the applicant landowners as to Powys CC’s status as an “appropriate person” under CLR even though this land has not in fact been determined as contaminated land under the regime. Whilst the site had been identified for further investigation by the local authority (Powys CC), it was not on the list of sites prioritised as posing the greatest risk. However, the site had known issues that required monitoring and management and the applicants sought the declaration so as to identify which party should undertake these. The court found that this represented a “real and present dispute between the parties” and that the applicant’s right to appeal in the future if a remediation notice was served on them under CLR (if the site were ever deemed as “contaminated land”) was not a sufficient remedy to deal with the question of how to manage the potential liability in the meantime.

This is an important judgement since local authorities were generally responsible for running public landfill sites until 1990s. There are around 21,000 known closed landfill sites in England and a large number of these would have been run by local authorities. Such sites were often located on private land under lease arrangements and so are now in private ownership. Older landfills had little in the way of either legal controls or physical containment systems and these shortcomings can have a long environmental legacy, with impacts occurring decades after closure.

This judgement will give some welcome clarity as to where responsibility for management of former local authority sites lies, though for local authorities with constrained resources, it may not be an easy liability to manage.

[1] [2016] EWHC 2596, High Court, 26 October 2016 [2] R (on the application of National Gas Grid (formerly Transco plc)) v Environment Agency [2007] UKHL 30