Vincent Sen says the property industry must take action to counter the legal fudge surrounding contaminated land. Vincent Sen is managing director of ICC Site Search.
Since July 1995, when the Environment Act received royal assent, the property industry has been pushing for legislative clarification of contaminated land liability.
The Government's recent proposal to reduce greenfield development in favour of the regeneration of brownfield land – land which carries an increased risk of prior contamination – has only heightened this need. The Act is not expected to become law until spring 1999. In its absence, those involved in the acquisition, development and sale of property – including the Law Society – are taking measures to ensure commercial projects are not devalued by environmental litigation.
The proposed Environment Act, drafted to alleviate legal uncertainty, is at best vague. David Jones, construction law partner at Hammond Suddards says: “The law on contaminated land needs clarification. We need to know the philosophy behind the legislation and whether it's designed to tackle contamination or merely sweep it under the most convenient carpet.
“We want to know at what level the Government intends to set the clean-up standard and what procedures must be in place before a site is declared contamination-free.”
According to the proposed legislation, local authorities will play a dominant role. The intention is to give them mandatory powers to deal with contamination incidents.
But without the necessary resources such powers will lack bite. Identification and confirmation of contamination, detailed site auditing and sampling may be required and local authorities will, according to the legislation, be responsible for initial costs. With funding levels uncertain, it will be difficult for them to know how far they should go to identify contaminated land.
To add to these difficulties, the guidance note contains several exclusion tests to decide who can be liable for clean-up costs. The “hardship” test is chief among these. Local authorities, having committed funds to remediating sites, will find they cannot recoup costs from those responsible because of hardship claims.
Another area of potential confusion is the standard of remediation required of local authorities. It will be very much left to local authorities to determine satisfactory levels of remediation. This will cause inconsistencies between different local authorities.
The basic legislation is full of ambiguities. In the first instance the polluter will pay for cleaning up contaminated land (a class A person). The polluter's identity will sometimes be self-evident, but not always. When land has been polluted by several sources, attaching liability will be far from straightforward. If the polluter cannot be found, the owner or occupier will be liable (a class B person).
But the guidance note does not describe steps that must be taken by local authorities to identify polluters or when a local authority can reasonably conclude that polluters “cannot be found”. There are also worrying indications that a class B person can very easily become a class A person. According to the guidance note, the owner or occupier of a contaminated site becomes a liable Class A person primarily responsible for remediating the site if they:
are informed of the presence of a pollutant in or under the site;
have the ability to take steps to prevent or remove the presence;
have a reasonable opportunity to do so.
One could well envisage a situation where a prudent owner, prior to sale, conducts an environmental audit of his site. Unbeknown to the “innocent” owner, the site is contaminated. Having conducted the audit, the owner gains sufficient knowledge to make him a class A person, especially if that particular sale is aborted. In this case the “innocent owner” may be liable even though he neither caused the pollution nor was aware of it when he bought the site.
In the midst of such legislative uncertainty, solutions are being sought by the private sector. The Royal Institute of Chartered Surveyors has produced its own guidance note to aid members in assessing the potential risks involved with contaminated land. It includes a checklist to help chartered surveyors take a consistent approach.
Lawyers and people in the property industry are making more use of environmental data services. Desk study reports, compiled by environmental research specialists, ensure that extensive information is known about a chosen site at an early stage. They contain information from local environmental health departments and the Environment Agency, historical maps, planning records and trade directory research.
When environmental desk studies form part of initial appraisals, and detailed investigations and remediation work is undertaken where necessary, contamination risk is managed throughout the development process. Contaminated land must be kept at the forefront of the legislative priority list even if the bold claim of the Government to be “the first really green Government” is in doubt.