Ruling on Council Over Contaminated Land Becomes Game-changer for Property Owners and Developers

Powys County Council has been in the spotlight recently as a court ruling found them not responsible for land contaminated at a landfill by a predecessor.

The controversial decision is a gamechanger for property owners and developers in situations where the property could be affected by contamination from a previous waste site or landfill.

The decision which overturned a high court judgement ruled that Powys County Council is, under the contaminated land legislation, not responsible for potential liabilities of its predecessors.

Prior to the Local Government Act of 1972, the Local Authorities which are established now didn’t exist.  Because of this councils are unlikely to be found liable for any contamination which occurred prior to that date.

In addition, many local authorities underwent additional re-organisations as a result of the Local Government Acts of 1985 and 1992 – further reducing the 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.’ – Groundsure Article

The case arose to settle the query of whether Powys was seen to have taken over the ‘liabilities’ of its statutory predecessor Brecknock council when it was created back in 1996.

It was ruled that Powys council did not take over the Class A causer liabilities of Brecknock as those liabilities were not created until 2001, five years later.  With the previous councils no longer being in existence the previous owner could not be found as Class A causers.

As 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. Data from leading specialists Groundsure shows that there are around 9,600 landfills/refuse tips across England and Wales that could have been the Local Authority’s responsibility which now may become ‘orphan’ sites.

Now that Powys Council’s liability has been removed the ruling has the potential to possibility increase the number of authorities who may look into chasing current owner/occupiers for Contaminated Land investigation.

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.”