Environmental Bulletin: Summer 2017
We are the Freeths’ Environment team, part of Freeths’ Planning and Environment Group. We are a strong team of environmental lawyers, using our experience and expertise to advise both public and private sector clients across a wide range of environmental matters including protected species and habitats, environmental permitting, waste, planning issues/Environmental Impact Assessment, contaminated land, corporate and real estate transactions and environmental crime defence.
In this edition we consider:
- The new Environmental Impact Assessment Regulations 2017: our article provides guidance on some common queries from developers and LPAs about when the old (2011) EIA regulations and the new (2017) EIA regulations apply.
- Contaminated land: our article provides an analysis of important caselaw developments in the Contaminated Land Regime and practical advice for landowners / occupiers.
- Litigation costs rules in environmental cases: our article considers the litigation relating to reforms being made to costs rules in environmental cases.
- Tactics in the criminal courts: our article considers changes to the approach to sentencing in environmental cases.
- Piercing the corporate veil in environmental cases: when can a court look behind a company which is set up to conceal or hold environmental liabilities, so that others outside that company may be held liable?
- Access to environmental information: our article provides an update on a Court of Appeal case on when information is covered by the Environmental Information Regulations 2004.
- Excluding contractual liability for negligence in relation to asbestos: our article considers a Court of Appeal judgement on a construction contract that sought to exclude liability for anything asbestos-related.
New Town and Country Planning (EIA) Regulations 2017: Assistance for developers and Local Planning Authorities alike
When do the old 2011 regulations and the new 2017 regulations apply1?
The new Town and Country Planning (EIA) Regulations 2017 (SI 2017/ 571) came into force on 16 May 2017.
Since then we have had a large number of clients (both developers and Local Planning Authorities) ask us for advice on which sets of Regulations apply in certain situations ie the new 2017 Regulations or the old Town and Country Planning (EIA) Regulations 2011 (SI 2011/ 1824).
This is a very important question due to the significant differences between the old and the new requirements in relation to EIA screening, the contents of an Environmental Statement and the way the LPA must deal with its determinations.
The key regulation dealing with how the old and new Regulations interface with each other is regulation 76 of the 2017 Regulations. However this still needs some unpicking:
1. If you submitted a request for a screening opinion to the LPA before 16 May 2017…
Then the screening rules under Part 1 and 2 of the 2011 Regulations apply to the screening process (see reg 76(3) of the 2017 Regulations). However the rest of the process (eg requesting a scoping opinion (if you choose to do that), preparing an Environmental Statement if that is necessary, submitting an Environmental Statement, assuming these start after 16 May 2017) will all be done under the 2017 Regulations.
2. If you submit a request for a screening opinion to the LPA after 16 May 2017…
Then the 2017 Regulations apply.
3. If you submitted a request for a screening direction to the Secretary of State before 16 May 2017…
Then the screening rules under Part 1 and 2 of the 2011 Regulations apply to the screening process (see reg 76(3) of the 2017 Regulations). However the rest of the process (eg requesting a scoping opinion (if you choose to do that), preparing an Environmental Statement if that is necessary, submitting an Environmental Statement, assuming these start after 16 May 2017) is all done under the 2017 Regulations.
4. If you submit a request for a screening direction to the Secretary of State after 16 May 2017…
Then the 2017 Regulations apply.
5. If you submitted a request for a screening opinion to the LPA before 16 May 2017 but then decide after 16 May 2017 that you want to request a screening direction from the Secretary of State for the same development …
Then the request for the screening direction will have to be made under the 2017 Regulations. You are treated as falling within 4. above. It does not matter that you previously made a screening request under the old Regulations.
6. If you lodged your planning application with the LPA before 16 May 2017 but without any ES and without having first obtained any screening opinion or any screening direction?
Then the 2011 Regulations apply to the screening procedure. This is because the 2011 Regulations (regulation 7) state that, in this scenario, your lodging of the application is treated as a request for a screening opinion from the LPA; and regulation 76(3) of the 2017 Regulations states that a request for a screening opinion made before 16 May 2017 is dealt with under Parts 1 and 2 of the 2011 Regulations. Hence you are treated as falling within 1. above.
If, following screening, you need to request a scoping opinion and / or prepare an ES and these things happen after 16 May 2017, then this will be done under the 2017 Regulations.
7. If you had lodged a “subsequent application” (eg an application for reserved matters approval) with the LPA before 16 May 2017 but without any ES and without having first obtained any screening opinion or any screening direction; and the original application (eg an outline permission) was also not accompanied by an ES
Then the 2011 Regulations apply to the screening procedure. This is because the 2011 Regulations (regulation 9) state that, in this scenario, your lodging of the application is treated as a request for a screening opinion from the LPA; and regulation 76(3) of the 2017 Regulations states that a request for a screening opinion made before 16 May 2017 is dealt with under Parts 1 and 2 of the 2011 Regulations. Hence you are treated as falling within 1. above.
NB. It is therefore wrong to say that “because this is a reserved matters application in relation to an outline permission which was granted after being screened out under the old (2011) EIA rules, then the old EIA rules also apply to the reserved matters application”. The way the outline permission was determined is not relevant – instead what is relevant is the date you lodged the “subsequent application”. We have seen this incorrect approach adopted by a few LPAs in their recent screening opinions.
8. If you requested an ES scoping opinion from a LPA before 16 May 2017…
Then the 2011 Regulations apply to the ES process (reg 76(2) 2017 Regulations).
9. If you request an ES scoping opinion from a LPA after 16 May 2017…
Then the 2017 Regulations apply to the ES process.
10. If you submitted an Environmental Statement to a LPA before 16 May 2017…
Then the 2011 Regulations apply to the ES process (reg 76(2) 2017 Regulations).
11. If you submit an Environmental Statement to a LPA after 16 May 2017…
Then the 2017 Regulations apply to the ES process.
Please call us if you would like any further assistance.
1 This is not an exhaustive analysis, nor does it contain definitive legal advice. Specialist advice should be sought from a member of Freeths Environment Team in relation to specific queries.
In our Winter 2016/17 Environmental Bulletin, we gave an update on some important developments in the caselaw relating to the Contaminated Land Regime and noted that this was an area where there had been little in the way of judicial interpretation over the 17 years that the Regime has been in operation. Well, in a rush of activity, the last few months have seen two important judgements on how some aspects of the Contaminated Land Regime are to be interpreted. We set out below the key points you should be aware of and in the section entitled “What does this all mean for you?” we set out how you can best manage CLR liabilities following these developments.
The Contaminated Land Regime
As we described previously, 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 potential “contaminated land” and for regulators to identify and investigate such land. The assessment of the land must consider if there is a pollutant linkage present (ie a pathway which joins a contaminant and a receptor) and if this represents a significant pollutant linkage. If the regulator finds there is a significant possibility of significant harm (often termed “SPOSH”) to human health or certain aspects of the environment, then this means a significant pollutant linkage is present and it must formally determine the land as “contaminated land” and consider who is responsible for its remediation. If they are not satisfied that the remediation will be undertaken voluntarily, the regulator then has powers to serve remediation notices on those responsible or to undertake the remediation and recover the costs from the responsible parties. Primary responsibility for remediation falls on those who “caused or knowingly permitted” the relevant contamination. However, if no such party can be found, liability falls to the current owner and occupier of the land.
Council’s failure to properly assess whether land was “contaminated land” – Update on Jim 2 appeal
We reported previously that we were awaiting the decision by the Secretary of State (SoS) on an appeal made against a remediation notice served under CLR by Walsall Metropolitan Borough Council (the “Council”). This is only the second appeal to the SoS since the CLR was implemented in 2000. The inquiry was held in December 2015 but it has taken until now for a decision to be made. The remediation notice being appealed had been served on a development company (Jim 2 Limited). The site which required remediation was a former gasworks, which was developed for housing in the 1970s by Jim 2 (then MacLean Homes) and another developer, which has subsequently been dissolved.
The SoS issued her decision in a letter dated 5 April 2017, though this letter was not made public until June 2017. The SoS agreed with the Inspector’s recommendation that that the remediation notice should be quashed on the basis that the Council’s assessment of the site had not been in accordance with the (then current) statutory guidance and had not been based on sound science. Furthermore, the Inspector found that even later work by the Council, in the lead up to the appeal, had failed to demonstrate that the land designated as “contaminated” by the Council met the SPOSH test, though it was clearly contaminated and represented a possibility of significant harm to residents of the development. The SoS harshly criticised the Council’s environmental consultants and also said that the Council should have recognised the shortcomings in their approach. The Inspector also highlighted (though this was not commented on by SoS) that in determining whether land should be determined as contaminated, the Council should have included consideration of the financial impacts on residents of the “property blight” that this would cause and the stress caused for residents. These factors were not, in fact, considered by the Council.
Guidance on allocating liabilities to those that “cause or knowingly permit” contamination
Whilst the above finding was enough to quash the remediation notice, the SoS set out her conclusions on other arguments brought, to assist understanding of the approach to be taken in interpreting the relevant guidance and legislation. This included the approach to be taken in determining whether a party has “caused or knowingly permitted” contamination.
Consideration of the particular contaminant in question
The SoS noted that the correct test was whether a party had “caused or knowingly permitted” the particular contaminant that was leading to the significant harm that had caused the land to be determined as “contaminated land” under CLR and not contamination in general.
Also, when considering whether Jim 2 had “knowingly permitted” the contamination, the Inspector noted (and the SoS agreed) that “knowingly permitting” requires “knowledge of a substance, the power to remove that substance, the opportunity to exercise that power and a failure to do so”.
Also, very importantly, the knowing permitter need not know that a particular chemical substance is present (here benzo(a)pyrene or B(a)P) but simply know of the presence of the material which contains that chemical (here ash, clinker, coal and coke). So, even though the Inspector accepted that it was very unlikely that the pre-purchase site investigation by Jim 2 in the early 1970s would have included testing for B(a)P, or even hydrocarbons in general, it was almost certain that they knew of the presence of coal, coke ash and clinker across the site and this was enough for them to have the requisite knowledge to be “knowing permitters”. The Inspector did note, however, that knowledge that “gasworks waste” generally was present would not have been enough, since that would contain many waste streams that do not contain B(a)P. Nonetheless, this does clarify that exact knowledge of the presence of a particular contaminant is not required for a party to be deemed a “knowing permitter”.
This is very relevant for purchasers of potentially contaminated sites, as they can have sufficient knowledge to become “knowing permitters” even if they do not undertake detailed site investigations and/or are not aware that a particular chemical constituent is present. If a purchaser is unaware of the presence of a potentially harmful contaminant, they are also less likely to take the steps required to mitigate or reduce the associated risks and are therefore more likely to “permit” its ongoing presence. It again emphasises the vital importance of thorough due diligence and appropriate environmental site investigations prior to purchase.
What is “causing”?
The SoS concluded that, in this case, the moving of existing contamination around the site (during preparatory operations such as infilling and regrading of the site prior to development) could not reasonably have said to have increased levels of contamination and thus the developer had not “caused” contamination. However, it should be noted that in a previous case (where a developer had been warned that exposing the soil to rainfall could mobilise contaminants but nonetheless removed impermeable surfaces and exposed the soil to rainfall), the more extensive contamination which resulted from the developer’s actions was deemed to have been “caused” by the developer.
It will therefore depend on the facts of the case as to whether developers are found to have “caused” contamination, even where this was present on the site prior to their involvement.
Liabilities of those who introduce pathways and receptors (Exclusion Test 6)
Where there a number of parties who are “causers or knowing permitters”, the CLR statutory guidance includes a number of exclusion tests which are applied in a specified numerical order (from 1 to 6). These can exclude some (but not all) of those who would otherwise be liable for remediation. If applying an exclusion test results in no parties remaining liable, that exclusion test is not used and no further exclusion tests are applied – in effect, it is like a game of musical chairs with the last person(s) standing being liable for the remediation. Exclusion Test 6, which was discussed in some detail in this judgement, excludes those who would otherwise be liable solely because of the subsequent introduction by others of relevant pathways or receptors in the significant contaminant linkage.
In this case, the Council itself had owned the gasworks site for 7 years prior to the sale to Jim 2 and had even obtained outline planning permission for housing at the site. The Council itself acknowledged that it could be a “knowing permitter”. However, the Council argued that it was excluded from liability because it was Jim 2 who later introduced the receptor (the residents) by building housing on the site. The Inspector found that even though the Council had obtained outline planning permission for residential use and the sold the land on to a housebuilder, there was no obligation placed on the housebuilder to develop the land for a residential use. Furthermore, the particular layout of the site (where housing was located in areas with high B(a)P) was a decision of the developer. Thus, he concluded that the Council had not introduced the receptors (the residents) causing the significant pollutant linkage, but this had instead been the responsibility of Jim 2. For this reason, the Council were correct in excluding themselves from liability. The SoS also went on to say that even if the operator of the original gasworks had still been existence, they too would have been excluded from liability by this test.
It should be noted that this situation will only occur where the developer has first been found to be a “causer or knowing permitter” – if they are not, liability will fall to those that are (if they still exist). However, as described above, the developer needs little actual knowledge to become a knowing permitter and, coupled with a failure to take steps to address risks at the site, can be enough to become a “knowing permitter”. Given this, under CLR, a developer may well find itself solely liable for cleanup costs by virtue of having introduced a receptor or pathway, even if the contamination which is causing the problems was placed there by another party who is still in existence.
Sold with Information (Exclusion Test 3)
Another exclusion test, which sellers of land often seek to invoke to pass their CLR liabilities on to purchasers is the “Sold with Information” test. Like Exclusion Test 6 described above, where a number of “causers or knowing permitters” have been identified, this test can exclude some of those parties from liability (though only if this does not exclude all the parties). Exclusion Test 3 would be applied to the group of “causers and knowing permitters” before Exclusion Test 6, and seeks to exclude those who have disposed of land in circumstances where it is reasonable that another party who acquired the land should be liable for the remediation. Broadly, this is the case where the acquiring party had sufficient information to understand the land condition before purchase and that party is also (by the date of the later determination of the land as “contaminated land” under CLR) a “causer or knowing permitter”.
Since CLR came into force in 2000, sale contracts typically contain express acknowledgements by the buyer that, before exchange, the buyer had information that would reasonably allow it to be aware of any contamination present and the broad measure of this. Also, in sales since 1990 (where the body is a large commercial organisation or a public body), permission from the seller for the buyer to carry out its own investigations into land condition is usually sufficient under CLR to show that the buyer had the requisite information. Therefore contracts will often contain an acknowledgement that such investigations were allowed by the seller.
In the Jim 2 case, the Council had sold the land to Jim 2 in the early 1970s, well before CLR came into force. The contract did not contain any of the wording described above, though the particulars of sale did state that “parts of the former Gasworks may be unsuitable for building”. This indicates that Jim 2 were aware of the former use of the site. However, the Inspector found (and the SoS agreed) that this wording was more likely to refer to the presence of buried structures which would make the land unsuitable for building housing upon, rather than to risks associated with contamination. As such, this was not a clear indication by the Council that the land may be contaminated and Exclusion Test 3 would not operate to exclude the Council from liability (though as described above, Exclusion Test 6 did).
Former public landfills: Increased risks for private landowners under CLR
We reported previously that in the judgement in Price and Hardwicke v Powys County Council, the High Court had decided that a Council was liable for the CLR liabilities of its predecessor body and so was responsible for the remediation of a former landfill site. This was a site that the predecessor council had operated (prior to the restructuring of local authorities). However, the Court of Appeal has now overturned that decision and said that the liability instead sits with the current landowner.
The Court agreed that the “appropriate person” to remediate the site would have been the Borough of Brecknock (“Brecknock”) who operated the landfill site historically. However, this body no longer existed following a government reorganisation in 1994, after operation of the landfill had ceased. The court found that, whilst the rights and liabilities of Brecknock had passed to Powys County Council (“Powys”) under the statutory order for the reorganisation, liabilities under the CLR had not been passed to Powys, because CLR did not exist in 1994 at the time of the reorganisation. Since Brecknock’s liability had not been transferred to Powys but remained with Brecknock (a body that no longer existed) and no other “causers or knowing permitters” were identified then, under CLR, the liability fell to the current owner and occupier of the land.
This is very significant for the current of owners of the estimated thousands of former local authority landfills found across England. Many of these old landfills were located on private land under lease arrangements and, given the lack of environmental controls incorporated during their operation, can be associated with long-term environmental problems. Given the large number of local government reorganisations over the years, the situation outlined here, where a landfill was operated by a body that no longer exists, must be a common one. Where these sites lead to significant risks to human health or the environment, this burden is now much more likely to fall to private landowners.
Since the landfills were originally operated by public bodies for the benefit of all, this does seem to be a harsh outcome of the current CLR, though it will no doubt be welcomed by cash-strapped local authorities.
What does this all mean for you?
As we have described, these judgements give some welcome clarification to how CLR will be interpreted. In practical terms, for those buying, selling, owning or occupying potentially contaminated sites, the key points are:
- The cases highlight the difficulty for regulators in securing clean up of contaminated sites using CLR, a slow and highly complex regime. Investigation on the site in the Jim 2 case began around in 2008. Now, after almost 10 years, it is unclear whether remediation will ever happen, given the SoS has concluded that even despite the fact that there is a risk of significant harm to the residents, it does not meet the SPOSH test and so is not “contaminated land” under CLR. In the Powys landfill case, confusion over how to interpret CLR meant the parties had to ask the court to determine who was responsible for the long-term management of the site. These uncertainties make CLR a difficult regime for regulators (and others involved in contaminated sites) to navigate. Nonethless, the potential liabilities under CLR can be significant and long-lived, so it is important to manage these, even if the likelihood that your site will be formally determined under CLR is small.
- Undertake thorough legal and technical due diligence before exchanging contracts. Where land includes former public landfill sites, it is worth determining the party that operated the site and making at least preliminary enquiries as to whether that party is still in existence. However, bear in mind that once you own the land, if there is contamination that needs managing, failure on your part to do so, could make you a “knowing permitter” and potentially liable for the full costs of remediation. Also, if you plan to undertake development at the site, original polluters may well be excluded from sharing liability with you by Exclusion Test 6.
- If you are an owner of potentially contaminated land, even a fairly general (non-specific) understanding of the presence of contamination on the land, is enough to fix you with enough knowledge to be a “knowing permitter”. While you hold the land, therefore, you need to investigate the risks that may be associated with contamination on the site and, if necessary, take steps to manage/mitigate these.
- Liability as a “knowing permitter” under CLR continues even following sale. Though it can be passed to another party by contract (typically the purchaser of the land), if that party is no longer in existence at a future time when a regulator is looking to serve a remediation notice, the liability will revert to the “knowing permitter”. Equally, if you have accepted CLR liability from a seller when you purchased the land, you can pass this on when you sell. However, again if that party is no longer in existence at a future time when a regulator is looking to serve a remediation notice, the liability will revert to the previous person in that liability chain. Your best means of managing this on sale, may well be to include express wording passing on your “causer/knowing permitter” risk to the buyer and ensure (as far as you are able) that the buyer has a good strength of covenant.
- In addition to the above, if you are a seller of potentially contaminated land, or granting leases over such land where you intend to pass liability for historic contamination to the tenant, ensure that the sale contract contains express provisions seeking to trigger the relevant exclusion tests. Typically this would require wording relating to the presence of contamination and acknowledging that you have granted the buyer the right to undertake its own investigations (to try and trigger Exclusion Test 3). Also, when selling to a party who is likely to be developing the land, include wording seeking to trigger Exclusion Test 6, such as including an acknowledgement by the buyer that their activities will introduce new pathways and receptors to the land.
Of course, the best strategy for managing risks relating to contaminated land will depend on the particular circumstances of your case. Freeths’ environment team would be happy to discuss your particular issues and advise on the most appropriate approach for you.
In our winter 2016/17 bulletin, we reported on changes to the costs rules applicable to judicial review in environmental cases. The changes had the dual purpose of strengthening compliance with the Aarhus Convention on access to environmental justice and addressing the government’s ongoing concern that the system was open to abuse, as a campaigning tool or to delay legitimate development proposals.
Under the previous rules, the costs liability of a losing claimant had been generally fixed at no more than £5000 for an individual and £10,000 for other claimants. Among other changes introduced by the new rules, the court now has discretion to raise or lower that costs cap according to the claimant’s resources and with the legislation fixing no upper limit.
The reforms have, themselves, been subject to judicial review. The challenge, brought by ClientEarth, Friends of the Earth and the RSPB was heard in the High Court.
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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