Contaminated land—due diligence in transactions
Contaminated land—due diligence in transactions

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

  • Contaminated land—due diligence in transactions
  • Due diligence in contaminated land transactions
  • Former chemical site in the spotlight
  • Dispute over clean up costs
  • Known contamination
  • Fraudulent misrepresentation?
  • Court's decision
  • Tips for buyers and developers of contaminated sites

Due diligence in contaminated land transactions

Lambson Fine Chemicals Ltd v Merlion Capital Housing Ltd [2008] All ER (D) 116 (Feb) highlights the importance of technical and legal due diligence in brownfield development projects.

Former chemical site in the spotlight

The 40 acre site in Castleford had been used for the manufacture of chemicals since the 1860s. In the late 1940s it was owned by Laporte and used for the manufacture of sulphuric acid.

Lambson Fine Chemicals operated at the site for 30 years of chemicals manufacturing processes and in 2004 Lambson sold the property to Merlion Capital Housing for £12.25m for proposed commercial and residential development.

Lambson leased the property back for a year to demolish the factory and Merlion held a retention of £500,000 to deal with the costs of clean up arising from the demolition works. Most of the retention was repaid to Lambson, however £150,000 remained outstanding.

Dispute over clean up costs

Following the purchase, Merlion discovered 14,000 tonnes of soil in the centre of the site that contained ‘Blue Billy’, a waste product that contains high concentrations of cyanide. Low levels of exposure to cyanide over a long period can lead to poisoning, paralysis, miscarriages and liver damage.

When Lambson completed