Contaminated land—agreement on liabilities

The following Environment practice note provides comprehensive and up to date legal information covering:

  • Contaminated land—agreement on liabilities
  • What is an agreement on liabilities?
  • Effect of the agreement
  • Exclusion, apportionment and attribution rules
  • Hardship provisions
  • Challenges to the agreement
  • When must a copy be provided?
  • Drafting issues
  • Form of the agreement
  • Parent company guarantee
  • More...

Contaminated land—agreement on liabilities

What is an agreement on liabilities?

Parties to a transaction may decide to address the allocation of known or potential remediation costs under the Environmental Protection Act 1990, Pt IIA (EPA 1990) as an express part of a deal, eg when transferring land.

An agreement on liabilities exists where:

  1. two or more persons are 'appropriate persons' responsible for all or part of the costs of a remediation action

  2. they agree, or have agreed, the basis on which they wish to divide that responsibility

  3. a copy of the agreement is provided to the enforcing authority, and

  4. none of the parties informs the enforcing authority that it challenges the application of the agreement

An 'appropriate person' is the:

  1. person(s) who caused or knowingly permitted the contaminating substances to be in, on or under the land in question (Class A), or

  2. owner or occupier of the contaminated land, but only where a Class A person cannot be found (Class B)

For more information, see Practice Note: Contaminated land—identifying Class A and B appropriate persons.

Effect of the agreement

The statutory guidance generally requires the enforcing authority to give effect to such agreements between the parties.

Exclusion, apportionment and attribution rules

For this reason, the rules on exclusion, apportionment or attribution should not be applied between the parties to the agreement.

However, those rules should be applied to determine any exclusions, apportionments or attributions

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