A recent appeal decision in relation to a remediation notice served by Walsall Metropolitan Borough Council (The Council) has provided some rare clarification as to the circumstances in which a local authority remediation notice will be valid.
The appeal is particularly significant as it is only the second to have been determined by the secretary of state in the seventeen years since the current contaminated land regime came into force. It is also timely as many of the obligations contained in the Environmental Protection Act 1990 ('EPA'), including those on contaminated land, implement EU obligations. As such, changes can be expected as part of the Brexit process, but it is too early to predict what these may look like.
The land in question formed part of the former site of the Willenhall Gas Works which was later acquired by The Council’s predecessor authority for housing development. This was then later sold to McClean Homes (now Jim 2 Ltd) upon which the site was split and a number of homes were built by McClean and another developer, E Fletcher Builders (since dissolved).
In 2007, as part of its wider contaminated land strategy, the Council investigated the land. During the course of March 2012 it determined that two areas on the site had been contaminated with benzo(a)pyrene, a known carcinogen. On this basis, the Council concluded that there was a significant possibility of the benzo(a)pyrene causing significant harm.
Under the contaminated land regime contained within Part 2A of the EPA local authorities are under a duty to identify ‘contaminated land’ (within the meaning of the statutory definition, see below for an explanation of the 'contamination pathway’) within their jurisdictional areas. Where land is identified as contaminated land and appropriate remediation is not being undertaken, a remediation notice must be served on:
- the Environment Agency
- any owners and occupiers of the land
- any person the local authority considers to be an ‘appropriate person’.
In determining the identity of appropriate persons on whom to serve the notice, the local authority must identify those who ‘caused or knowingly permitted’ the contamination. These are known as ‘Class A persons’. If not the causer or knowing permitter, owners and occupiers of the site are known as 'Class B persons’. Where Class A persons are identifiable, the remediation notice must be served on these in the first instance.
As it happens, Jim 2 Ltd was able to secure the quashing of the remediation notice on the basis that the approach taken by the Council in identifying the land as contaminated land was unreasonable due to a reliance on an unsound scientific approach. This outcome was very much a result of the particular facts of the case. What is more illuminating however is the Inspector’s commentary on other aspects of the case and on the contaminated land regime in general.
One point that should be of particular note to landowners and developers is the confirmation that where a landowner or developer becomes aware of contamination and fails to remediate this, and/or causes dispersal of that contamination they can become a knowing permitter and therefore a Class A person. As we have often advised, a 'head-in-the-sand' approach to potential contamination issues could lead to costly remediation liabilities.
A further key point raised by the decision is the analysis of an exclusion contained in the contaminated land statutory guidance that allows for original causers or knowing permitters of contamination to avoid liability (Test 6). Under this exclusion, the original or causer or knowing permitter can cease to be liable as a Class A person if a subsequent owner creates new receptors or pathways for the contamination (e.g. by building housing and introducing residents to the site) which completes the contamination pathway (Source > Pathway > Receptor – only once all three elements in place is there deemed to be ‘contamination’ within the meaning of the 1990 legislation).
It is important to note the confirmation that the exclusion tests contained within the statutory guidance are essentially subject to a 'last man standing' rule. That is to say, the exclusions must not be applied in sequence until the point at which nobody remains liable. Instead, these should be applied until there is only one remaining appropriate person or class of appropriate persons left on whom the remediation notice should be served. This could potentially mean that in one set of circumstances an original causer or knowing permitter is liable even where one of the exemptions would apply in a different set of circumstances.
Given this, where potential contamination issues have been identified in the context of a transaction involving land, it is important to ensure that these are dealt with at the earliest possibility to ensure clarity is achieved for all parties and to ensure that you don’t become the 'last man standing'.