Powys County Council Contaminated Land ruling: the implications
There has been a lot of discussion across the industry and in the news following the recent contaminated land ruling by the Court of Appeal, which held that Powys County Council was not liable for pollution created at a landfill site by its predecessor. This ruling may have an impact on property owners/developers where the property could be affected by contamination from a waste site or landfill, and will be picked up on with interest by local authorities.
Overturning a High Court judgement, the ruling held that Powys County Council is not responsible for potential liabilities of its predecessor under contaminated land legislation introduced in 2001, after the council was established. Given that virtually none of today’s local authorities existed prior to the Local Government Act of 1972, following the ruling councils are unlikely to be found liable for any contamination which occurred prior to that date. Furthermore, many local authorities underwent additional reorganisation as a result of the Local Government Acts of 1985 and 1992, further reducing those authorities’ potential liabilities.
The contaminated land regime rules that under Part 2A EPA 1990, those who caused or knowingly permitted the contamination (Class A persons) must be targeted for remediation costs first. If no Class A persons can be found, then the innocent landowner or occupier could be liable as a Class B person.
At the heart of the case was whether Powys was seen to have taken over the “liabilities” of its statutory predecessor Brecknock council when it was created in 1996, and was therefore responsible for the management of landfill sites by Brecknock. The Court of Appeal held that Powys council did not take over the Class A causer liabilities of Brecknock since those liabilities were not created until 2001, five years later. The previous councils being no longer in existence meant they could not be “found” as Class A causers.
Like Powys initially did, a great many local authorities had assumed that responsibility for waste sites and tips operated by predecessor councils would naturally fall to the council in existence today. Groundsure data* shows that there are around 9,600 landfill/refuse tips across England and Wales that could have been the Local Authority’s responsibility which now may become ‘orphan’ sites.
This ruling could greatly increase the possibility of authorities chasing current owner-occupiers for Contaminated Land liabilities now that their own liability has been removed. Given the wholesale withdrawal of Contaminated Land investigation/remediation funding by central government, authorities may well be more likely to investigate sites where there is a chance of recovering costs from third parties, as they have little chance of funding remediation themselves.
Dan Montagnani, managing director, Groundsure, believes that this ruling emphasises the need for thorough historical land use investigation.
“This ruling underlines that no one in any land transaction can assume that liabilities will be held by another party, and highlights the crucial importance of doing full environmental due diligence on every transaction. Just because government capital funding has been withdrawn from the Contaminated Land sector, it does not mean the underlying issues associated with contaminated land have disappeared. Historical contamination is still an issue in every property transaction, and it is vital that purchasers ensure they have access to the most accurate information to help them understand these risks. This is where Groundsure can help.”
For more information about the portfolio of Groundsure reports that can help understand and mitigate against risk click here.
*Source (all GS Landfill sites and EA Historic Landfill sites where the Council is listed as the operator, deduplicated to remove multiple records for a single site)