You can’t bury the evidence

We have reported earlier this year (March 2006) on a High Court case concerning a former landfill site on which contamination had been discovered 20 years after the developer sold the last plot.

The need for sellers of potentially contaminated land to deal with it properly has been reinforced by a decision in another case, as one of the partners in our commercial property team explains.

The case arose when a coal tar pit was found in a back garden of a housing estate in Yorkshire. The Environment Agency successfully sued National Grid Gas plc for the cost of environmental cleanup works. The site, a former gas works, had been redeveloped for housing in the 1960s.

The developer no longer existed, the company having been dissolved. National Grid Gas plc was therefore made liable. Under the privatisation regime they were the ‘statutory successor’ to the gas board that had originally operated the gas works and were therefore assumed to be responsible.

The decision is important on several levels even though it is subject to appeal in the House of Lords. First, it shows that the environmental protection regime has teeth –potential polluters can be pursued for the cost of remedial work decades after contamination has occurred. Second, it is not enough to simply get an indemnity from a buyer of potentially contaminated land.

If a seller is aware that land could be contaminated, the safest option is to carry out a full environmental audit and site investigation. If any contamination is discovered, it can be dealt with there and then. The buyer’s indemnities should also be backed up by insurance.

In short, it is no longer safe to assume that the problem has gone away once the land has been sold.

As always, if you need commercial and pragmatic legal advice, we’re here to help so please get in touch.

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