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The cost of contamination

18 November 2009

A significant land contamination case was concluded recently, when the former owner and the developer of a site in Hertfordshire lost their appeal against an environmental remediation notice. The Secretary of State ruled that they must both start paying to clean up the site.

The Case

Crest Nicholson, the developer, bought the site of a former chemical works in 1983 from Redland Minerals. Both parties were aware of the presence of bromide on the site and Crest had carried out remedial work to the soil before development began. But the chemicals had leached into the ground, threatening the drinking water supply. In 2005 the site was designated as contaminated land and the Environment Agency served clean-up notices. Both Redland and Crest Nicholson appealed.

The notices were upheld on the basis that Crest Nicholson had caused the contamination to be on the site through their action and inaction during the time they owned the site. Although they had done some remedial work, it had not been completely successful since both bromide and bromate had been able to leach into the ground water supply.

Redland had tried to get rid of their liability by providing Crest Nicholson with information about the contamination (applying the so-called “sold with information exclusion test”).  However, the Secretary of State felt they had not provided a full enough picture of the extent of the pollution and consequently they must share the liability with Crest.

The cost of the clean-up is likely to run into millions and could rise much higher if the affected water supply companies try to recover their own losses from Crest Nicholson and Redland.

Comments

A Willans Partner comments: “The case underlines the risks inherent in acquiring land known to be contaminated. Potentially, the costs of cleaning up can be greater than the value of the land itself and may have to be picked up by future owners, like Crest.”

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Nigel Whittaker BA (Hons)
Partner
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