Weighing up Contaminated Land risks versus Flooding and Subsidence

As property lawyers will know, contaminated land can give rise to a range of liabilities and unexpected costs, whether they relate to human health, land, buildings, businesses, or the wider environment. The statute that has attracted most attention since it was brought into force over 20 years ago is Part IIA of the Environmental Protection Act 1990. This focuses on the most significantly contaminated sites that are not undergoing redevelopment and hence are not being remediated under the planning regime. 

Every 5 years or so our environmental regulators provide updates to show just how active (more accurately, inactive) they have been in carrying out their statutory duties under Part IIA. The numbers are underwhelming. 

The UK-wide position is as follows: 

• England – as of 2016, 493 sites had been determined since 2000 as ‘Part IIA contaminated land’. 433 of these sites have been remediated. 159 sites had been served with a Part IIA statutory notice (including remediation statements). English councils had spent approximately £32m of public money on inspections of sites potentially falling within the definition of Part IIA contaminated and a further £52m on remediation.
• Wales – as at 2016, 175 sites were reported by 11 Welsh local authorities as having been determined as Part IIA contaminated land. As of 2016, approximately £4m had been spent on inspections and £6 million on remediation.
• Scotland – as of 2009, 13 sites had been determined as Part IIA contaminated land, but none had been remediated. During this period approximately £60 million of public funding was made available to local authorities, but much of this was not spent.
• Northern Ireland – Part IIA has not yet been brought into force here. A convincing case has been put¹ that public money could be better spent by designing a cost-effective and NI-centric contaminated land solution ‘rather than attempting to cut and paste other jurisdictions’ failed legislation into a NI context.’ 

Property lawyers may be surprised at just how low the numbers are – very few UK properties have ever been served with a Part IIA statutory notice. It has been persuasively argued that Part IIA is an ‘ineffective and inefficient regime’ (e.g., due to cuts to public funding to pay for site inspections) has failed to deliver the across-the-board remediation of contaminated sites and that it is unfit for purpose². 

This is not to say that the risk of a client incurring liability for a contaminated land which it owns or used to own ought to be downplayed or ignored by legal advisors: 

• The Law Society’s Practice Note on Contaminated Land (formerly called the Warning Card) calls on ‘all solicitors involved in property transactions’ whether acting for a buyer, tenant and/or lender, to take appropriate steps to protect their clients where contamination is ‘an issue’ (though, notably, not explaining when it is an issue!). 
• A failure by a solicitor to follow the Practice Note – such as failing to suggest to the client that an independent site report from a commercial provider, such as Groundsure, is obtained – could very easily result in a professional negligence claim. 

There are other reasons why solicitors involved in property transactions will continue to be watchful when their clients are transacting land which may be contaminated:

• Many UK sites – estimated at 325,000  – have had former uses which may give rise to liability for remediating historic pollution and remedying harm to third parties under other environmental laws, such as private nuisance, s. 59 Environmental Protection Act 1990 (removal of waste unlawfully deposited on land e.g., by tenants who then become insolvent, exposing the property owner to pay for its removal). 
• Legal and technical expert fees can loom large in cases involving brownfield sites because the relevant law is so incredibly complex. 

It is also worth remembering that environmental searches, such as those provided by Groundsure, do not just identify existing Part IIA sites, but also capture possible future Part IIA designated sites.  Perhaps more importantly, these reports also identify contamination issues that are not sufficiently serious  for the site to be designated as a Part IIA site, but that a buyer should be aware of as they may affect an extension or future redevelopment of the property . 

And while solicitors are addressing their  exposures under the Law Society’s Contaminated Land Practice Note, it is worth noting that the most effective environmental reports are those that cover other practice note elements like flood risk, coal and other mining types, as well as infrastructure and planning matters. 

It is these risks that present a far greater consideration for UK homeowners, commercial landowners, and lenders because they occur much more frequently and, in some cases, they can have even more devastating and costly impacts. My earlier blog  covered the extent of the potential impact to land and buildings from flooding, subsidence, and coastal erosion. 

As we shall see in future blogs, these are the major environmental risks and, due to climate change, they are increasing significantly in terms of frequency and magnitude. The same cannot really be said for historic contamination risks – generally speaking climate change has more of a marginal impact on contaminated sites³. 

Contaminated land has been in the limelight for the past 20 years or so during which time the Law Society’s Practice Note has fuelled the growth in the provision of low-cost contaminated land reports to solicitors involved in property transactions.

It is time for this risk to be seen for what it is – just one of many geo-environmental risks impacting a few of the UK’s land and buildings. The geo-environmental risks that are most sensitive to climate change – flooding, subsidence, coastal erosion – now merit far greater consideration from the legal profession than legacy exposures such as contaminated land. 

References

1. https://img1.wsimg.com/blobby/go/56807317-a0ee-4f4e-b3ae-0ae72186e383/downloads/Does%20NI%20need%20a%20Contaminated%20Land%20Regime.pdf?ver=1607352699455
2. Fogleman V. (2014). The Contaminated Land Regime: Time for a Regime that is Fit for Purpose (Parts 1 and 2). International Journal of Law in the Built Environment, Vol. 6 No1/2, pages 43 to 68 and pages 129 to 151. https://www.researchgate.net/publication/263480577_The_contaminated_land_regime_Time_for_a_regime_that_is_fit_for_purpose_Part_2/link/56fd5b7e08aea6b77466e99d/download
3. This is not to say that climate change has no impact of land contamination risks. Increased flooding could mobilise previously dormant, buried contamination – e.g., an extreme weather event  / storm would remove a capping layer at a closed landfill site. Moreover, a warmer climate will, for example, increase groundwater temperatures which could, in turn, impact the direction in which the groundwater flows. This change could turn a site which is ‘safe’ into a potential liability if contaminants in groundwater start to flow in a different direction: e.g., towards rather than away from a private water supply.