Liabilities for contaminated land

Stephen Tromans QC and Rose Grogan discuss a rare contaminated land case in the Court of Appeal which considered the scope of “liabilities” for the purposes of the Part IIA contaminated land regime.

Since the introduction of the regime under Part IIA of the Environmental Protection Act 1990 for identifying and remediating contaminated land was brought into force in 2001, it has generated surprisingly little case law, given the intense complexity of the scheme. This may be due in part, paradoxically, to that very complexity having a chilling deterrent effect on local authorities pursuing cases. It is also undoubtedly due to the huge cuts in government funding to local authorities by way of the capital grant scheme for dealing with contaminated land.

However, Part IIA is still capable of generating some action for lawyers, as the decision of the Court of Appeal in Price and Hardwicke v Powys County Council [2017] EWCA Civ 1133 shows. In that case, a series of Welsh local authorities, the last of which was the Borough of Brecknock, had operated a rural landfill site for many years, under a series of licences with the owners of a farm on which it was located. After the site had closed in 1992 and was restored, local government reorganisation vested the assets and liabilities of Brecknock in Powys County Council, on 1 April 1996. At that point, the Environment Act 1995 had been enacted, but its provision inserting Part IIA into the Environmental Protection Act 1990 had not been brought into force. This only occurred in 2001.

Initially Powys assumed responsibility for the site and installed drains, a small treatment plant and a pumping station. However it then decided that as a matter of law it was not liable and terminated the arrangement. The landowners, fearful that they might be left responsible if at some point in future the land was identified as contaminated, sought a declaration that Powys was an “appropriate person” to bear liability under Part IIA as statutory successor to Brecknock.

At first instance the landowners’ arguments succeeded. HHJ Milwyn Jarman QC sitting as a High Court judge held that the word “liabilities” used in the reorganisation order was wide enough to transfer to Powys the Part IIA liabilities of Brecknock, even though at that time Part IIA was not in force. He relied heavily on a line of cases beginning with the decision of Woolf J in Walters v Babergh District Council (1983) 82 LGR 235, in which “liabilities” had been held to include contingent liabilities where a breach of duty had occurred but at the date of transfer no damage had resulted, so that there was no complete cause of action.

The Court of Appeal disagreed with this approach. They found there was no basis to distinguish the decision of the House of Lords in R (National Grid Gas (formerly Transco plc)) v Environment Agency [2007] 1 WLR 318, and hence Powys could not be treated as the same person in law as Brecknock. The word “liabilities” was not wide enough to cover possible future liability under law which was not yet in force. The Walters line of cases did not address the situation where the predecessor body was under no relevant obligation at the time of the transfer and where legal obligations were only imposed under a statutory scheme implemented afterwards. The Court rejected arguments of a general nature based on the “polluter pays” principle: the application of that principle was a matter for Parliament, not the courts.

The decision is of obvious significance as the wording in question is used in many local authority transfer schemes.

Stephen Tromans QC and Rose Grogan are barristers at 39 Essex Chambers. They appeared for the council in the Powys case.