The legal regime governing contaminated land is set out in Pt 2A of the Environmental Protection Act 1990 (the EPA), the Contaminated Land (England) Regulations 2006/1380 and DEFRA Circular 01/2006 -Environmental Protection Act 1990 Part 2A Contaminated Land (“the Circular”). Similar regimes exist in Scotland and Wales.

The regime is modelled on that applied to statutory nuisances. Local authorities (or, in relation to special sites, the Environment Agency) have a duty to inspect their areas for contaminated sites. Where contaminated land is found, they must then take action in relation to the contaminated site. The appropriate action will depend on the extent to which other actors voluntarily take steps to clean up the site but will take the form of a remediation declaration, a remediation statement or where compulsion is required a remediation notice on an “appropriate person” requiring that person to deal with any contamination for which the legislation deems that person responsible.

It is important to note that the Circular does not in practice operate merely as “guidance” but defines concepts that are central to the legal regime including “contaminated land”, what harm is to be regarded as significant and the apportionment of liability among two or more appropriate persons.

It is also important to note that although the contaminated land regime is a relatively discreet legal regime, there may be overlap with, for example, the environmental damage regime under the Environmental Damage regulations.

Contaminated land is land that appears to the local authority to be in such a condition that significant harm is being or may be caused.

Local authorities are under a duty to inspect the land in their area for the presence of contamination.

If contamination is discovered, the next step will be for the local authority to serve notice of the fact to the Environment Agency, the owner of the land, any person who appears to be in occupation.

If the landowner or occupier does not clean up the site the relevant authority must serve a remediation notice.

Definition Of Contaminated Land: Section 78A(2) EPA defines contaminated land as land that appears to the local authority to be in such a condition, by reason of substances in, on, or under the land that:

  • significant harm is being caused or there is a significant possibility of significant harm being caused; or
  • significant pollution of controlled waters is being, or there is a significant possibility of such pollution being, caused.
  • In determining whether land appears to be such land, a local authority must act in accordance with guidance issued by the Secretary of State (i.e. the Circular).
  • Controlled waters is as defined under s.104 of the Water Resources Act 1991 and includes both surface water and groundwater. Note that prior to April 2012, there was no test of “significance” in relation to the pollution of controlled waters.

Section 78A(3) defines harm as “harm to the health of living organisms or other interference with the ecological system of which they form part and, in the case of man, includes harm to his property”. Again, the question of what harm is to be considered significant and whether the possibility of significant harm or of significant pollution being caused is “significant” is to be determined in accordance with the Circular.

Chapter A Part 3 of Circular 01/2006 sets out what constitutes significant harm. For harm to be “significant” there must be:

  • a pollutant;
  • a receptor;
  • one or more pathways capable of exposing that receptor to that pollutant.

Harm may only be regarded as significant if it is to one of the listed receptors and within the description of harm specified for that receptor. The specified receptors are:

  • Human beings;
  • Any ecological system or living organism within a “special site” or site protected under various legislative provisions;
  • Crops, livestock and wild animals subject to shooting or fishing rights;
  • Property in the form of buildings.

The possibility of significant harm being caused refers to a measure of the probability or frequency of circumstances occurring which would lead to the causing of significant harm. Authorities must also take into account:

  • the nature and degree of the harm;
  • the susceptibility of the receptors to which harm might be caused;
  • the timescale within which the harm might occur.

The Circular identifies five broad categories of harm each with a different test for significance:

  • Human health effects from ingesting or bodily contact with a contaminant: where the amount of a pollutant would result in an unacceptable intake or exposure by a human being.
  • Other human health effects: where the probability or frequency of the occurrence of significant harm is unacceptable having regard to matters such as whether the harm would be irreversible or untreatable or would affect large numbers of people.
  • Effects on ecological systems: where significant harm from the pollutant linkage is “more likely than not” or there is a reasonable possibility of significant harm that, were it to occur, would cause damage beyond what can practicably be restored.
  • Effects on animals and crops: significant harm is more likely than not.
  • Effects on buildings: where significant harm is more likely than not during the economic life of the building.

Special Sites: Regulations 2 and 3 and Sch.1 of the 2006 Regulations designate various sites as “special sites”. Essentially, these appear intended to be those sites where it might be expected that potential contamination will or may cause serious harm or serious pollution of controlled waters (e.g. petroleum, nuclear and military sites, sites on which various contaminants specified in Sch.1 are found).

The Environment Agency is responsible for dealing with contamination on special sites. EPA s.78C prescribes the process for designating a site as a special site: it is generally for the local authority to make that designation in the first instance but the Environment Agency can propose to a local authority that it should make such a designation. The Secretary of State will determine any dispute between the local authority and the Environment Agency.

Procedure: Local authorities are under a duty to inspect the land in their area for the presence of contamination (EPA s.78B(1)). The Circular provides guidance on how a local authority shall fulfil this duty and a local authority must act in accordance with that guidance. For example, the local authority must be satisfied that there is a reasonable possibility that pollutant linkage exists on the land before it can take action to inspect land it suspects of being contaminated (Circular, Annex 3, para.B.22).

If contamination is discovered, the next step will be for the local authority to serve notice of the fact to the Environment Agency, the owner of the land, any person who appears to be in occupation of the whole or any part of the land and each person who appears to be an “appropriate person”: s.78B(3). Such a notice is known as a s.78B notice.

It is envisaged that, on receipt of a notice, an appropriate person, landowner or occupier will work constructively to clean up the site on a voluntary basis. However, if that does not happen, then the relevant authority – the local authority or, for special sites, the Environment Agency – must serve a remediation notice (s.78E(1)). The contents of a remediation notice are specified by reg.4 of the Regulations.

Before serving a remediation notice, the responsible authority must reasonably endeavour to consult the person on whom it is to be served, the owner of the land and any occupier of the land concerning what is to be done by way of remediation (s.78H(1)). Remediation is defined by s.78A(7) to include any or all of a site assessment, clean up, and subsequent monitoring.

Except in cases where it appears to the enforcing authority that there is imminent danger of serious harm or serious pollution of controlled waters, an enforcing authority may not serve a remediation notice on a person until three months after that person has received a s.78B notice: s.78H(3) and (4).

If a potentially liable person agrees to clean the land voluntarily to an appropriate standard or is already in the process of doing so, the enforcing authority cannot serve a remediation notice on that person so long as it is satisfied that that person is taking suitable steps to achieve an adequate clean up (s.78H(5)(b)).

The enforcing authority can also undertake remediation work itself where a potentially liable person may suffer hardship as a result of having to pay for the remediation: s.78P(2). In these circumstances, the enforcing authority may waive all or part of the costs.

An enforcing authority need not serve a remediation notice if it is the appropriate person: s.78H(5)(c).

Section 78N empowers a local authority to undertake remedial work without service of a remediation notice in a range of circumstances including where:

  • there is imminent danger of serious harm or serious pollution of controlled waters;
  • a person has failed to comply with requirements of a remediation notice;
  • the authority has decided that it will not seek to recover its costs (or all of its costs) from the appropriate person;
  • no person has been found, after reasonable enquiry, who is an appropriate person in relation to any particular thing.

Procedure – Remediation Statement: If a local authority uses power under s.78N or if it is satisfied that remediation will be carried out satisfactorily without the issue of a remediation notice or that the person whom a notice would be served would be the local authority itself, the local authority must issue and publish a remediation statement: s.78H(7). Schedule 3 of the Regulations prescribes the content of a remediation statement.

Procedure – Remediation Declaration: Where a local authority cannot specify anything in a remediation notice because its cost would be excessive in relation to the harm or pollution in question then it may not serve a remediation notice but must instead issue and publish a remediation declaration: s.78H(6). Schedule 3 of the Regulations prescribes the content of a remediation statement.

Procedure – Standard of Remediation Required: The standard of remediation required is […] (Circular, Annex 3, Chapter C). Remediation is required to meet whatever standard is suitable for the current use actually being made of the land concerned. The aim is to bring land into such a condition that, given its current use, it is not to be considered contaminated land any more. The current use includes all other uses to which the land is likely to be put in practice and also all uses to which it may be put without requiring a new or amended grant of planning permission (Annex 3, para A.26).

Note that a change in the use of land can result in a change of the status of the land as contaminated or non-contaminated or result in a change to the remediation required. This will be dealt with under the planning regime – contaminated land survey: see Annex 1, para.50 and paras A33 and A34. Remediation may be required to the extent that the authority considers reasonable having regard to the likely cost and the seriousness of the harm or the water pollution to be dealt with: s.78E(4). Regard must be had to Annex 3, Ch.C of the Guidance.

The local authority should look for the “best practicable technique” to achieve the aim, that is a method whose benefits justify the costs incurred and which represents the best combination of practicability, effectiveness and durability.

Where radioactive material is involved, the local authority must also be satisfied that any intervention is justified and optimised.

Who Is The Appropriate Person: The legislation seeks to give effect to the “polluter pays” principle by distinguishing between different classes of appropriate person.

Section 78F(2)defines the appropriate person as any person or any of the persons who “caused or knowingly permitted the substances, or any of the substances, by reason of which the contaminated land in question is such land to be in, or under that land”. Such persons are Class A appropriate persons. Note that a Class A appropriate person is the appropriate person only in respect of such of the substance as they were responsible for.

In Environment Agency (formerly National Rivers Authority) v Empress Car Co (Abertillery) Ltd [1999] 2 A.C. 22, the House of Lords gave a broad meaning to “causing” a substance to be present on the land. If any contamination results from the operation of a commercial activity, then it will be deemed to have been caused by that activity unless it was totally unforeseeable. So, for example, the operator will be responsible for the consequences of vandalism but not terrorism. It has yet to be determined whether a failure to act can count as “causing a substance to be present”.

The meaning of “knowingly permitting” is more difficult. It is not clear what minimum level of knowledge is needed as to the nature and extent of the contaminants and whether there is a need for knowledge both of a potential receptor and a potential pathway. Dicta of Newman J. in Circular Facilities (London) Ltd v Sevenoaks DC [2005] EWHC 865 (Admin); [2005] Env. L.R. 35 suggest that “knowledge” means “knowledge of the substance” rather than knowledge of its harmful potential.

It is not clear what is the text for fixing responsibility on a corporation in this context. And it is not clear whether constructive knowledge is sufficient.

Nor is it clear in what circumstances a person will be held to have “permitted” a substance to be on, in or under the land. Does a person permit a substance to be on land if they haven't the resources that would be needed to remove it?

If no Class A appropriate person has been found after reasonable enquiry, then the owner or occupier for the time being of the contaminated land in question is an appropriate person: a Class B appropriate person.

Again, there are difficulties of interpretation. In particular, it is not clear when it can be said that no Class A person has been founded: would the identification of a Class A biological person who is dead or a company that no longer exists suffice as finding such a person? Given that the intention of imposing liability on a Class B person appears to be to ensure that somebody will be an appropriate person in respect of the site, it seems the better view is that a Class B person will be fixed with liability if, e.g. a company responsible for the pollutants has been dissolved.

In R. (on the application of National Grid Gas Plc (formerly Transco Plc)) v Environment Agency [2007] UKHL 30; [2007] 1 W.L.R. 1780, the Environment Agency decided that Transco was an appropriate person. The claimant was the company to which the British Gas Corporation transferred its property, rights and liabilities on privatization. A public gasworks site had been operated by the British Gas Corporation from the 19th century until the 1950s. British Gas' statutory successor was to take on only the liabilities of its predecessor “immediately before” the transfer date which was in 1986. As liability under the Pt 2A regime was not created until many years after the transfer date, the liability did not exist at the time and could not be passed on.

Owner is defined as “a person (other than a mortgagee not in possession) who, whether in his own right or as a trustee for any other person, is entitled to receive the rack rent of the land, or, where the land is not let at a rack rent, would be so entitled if it were so let” (EPA s.78A(9)).

Occupier is not defined and the Circular doesn't go beyond saying that it is to be understood in terms of its ordinary meaning and would normally mean the person in occupation.

Where two or more persons have contaminated the same land with the same or different substances, a five-stage process is used to determine liability. This process works by excluding particular appropriate persons from liability. That is, all appropriate persons are liable, unless they fall into an excluded category.

Chapter D of Annex 3 sets out a series of six tests for excluding members of a Class A liability group and rules for apportioning liability where two or more members remain after the application of those tests. Chapter D also sets out tests for excluding certain members of a Class B liability group and further rules apportioning liability where more than one person remains liable.

The Class A exclusion tests are as follows:

  • “Excluded Activities” intended to exclude a range of normal commercial activities, e.g. lending money, letting property, depositing waste in an authorised landfill.
  • Making payment to another liable party to remediate land, where that payment is sufficient to cover all the costs of making the land no longer contaminated.
  • A liable seller in an arm's length transaction if the buyer received information, before he became contractually bound, that would reasonably have allowed him to be aware both of the presence of a relevant substance and the broad measure of that substance.
  • A person who has deposited a substance which does not by itself render the land “contaminated”, but which reacts with a second substance deposited by a second person in a manner that makes the land contaminated.
  • Concerns liability for land that has become contaminated by substances that another liable person has caused or knowingly permitted to escape from the neighbouring land.
  • Addresses the situation where a substance has been present on land for some time, but a significant pollutant linkage making the land contaminated only exists because a later person has subsequently introduced a pathway or receptor.

The Class B exclusion test is that a tenant or licensee who either has no interest in the land that has any marketable value or pay a rent equivalent to a rack rent and holds no other beneficial interest in the land will be excluded in favour of the freeholder and any superior leaseholder. Where two or more Class B persons are jointly liable, liability will be apportioned in proportion to the capital values of their respective interests.

If two or more people are all within a single liability group that is liable for remediation costs, Chapter D of the Circular sets out the approach that should be taken to apportioning liability between them. The broad aim is to reflect the relative responsibility for creating or continuing the problem the contamination has given rise to.

Private Agreements: A person who caused or knowingly permitted substances to be in, on or under any land shall also be taken to have caused or knowingly permitted those substances to be in, on or under any land to which they appear to have escaped: EPA s.78K. The innocent party in these circumstances – the person on to whose land they have escaped – shall not be liable to be served with a remediation notice.

Private Agreements – Non-compliance: Where a remediation notice is not complied with, the authority may do the work itself. It may then recover its costs (with interest) from the relevant appropriate person and may secure its costs by a charge on the land: s.78N(3)(c). Section 78P governs the recovery of and security for the cost of remediation.

The authority has discretion to undertake the work without recovering its costs in full (or at all) if recovery of its costs would cause a liable party to suffer “hardship”. Hardship is not defined in the legislation. The Circular gives it its ordinary meaning of “hardness of fate or circumstance, severe suffering or privation”. The Circular suggests that, in the case of a company, a serious likelihood of its being forced into liquidation may, if it is in an area of high unemployment or where there would be little alternative employment, represent “hardship” to which the enforcing authority should have regard.

Non-compliance with a remediation notice is a criminal offence (EPA s.78M(1)) and can lead to substantial fines, although it is only a summary offence.

Private Agreements – Appeals: A person served with a remediation notice may appeal to the Secretary of State. The time limit for bringing an appeal is 21 days. Regulation 7 of the Regulations sets out over 20 potential grounds of appeal.

The Secretary of State may cause a hearing or a local inquiry to be held in relation to an appeal: reg.9 of the Regulations.

The Secretary of State can not only uphold a remediation notice but can also make it more onerous for the appellant