R&I spotlight on environmental law
Produced in partnership with Simon Thomas and Emma Collins of Addleshaw Goddard
R&I spotlight on environmental law

The following Restructuring & Insolvency guidance note Produced in partnership with Simon Thomas and Emma Collins of Addleshaw Goddard provides comprehensive and up to date legal information covering:

  • R&I spotlight on environmental law
  • What are the main laws and regulations governing this area?
  • Can you give any examples of the type of insolvency situations where environmental issues may arise?
  • Why is this area relevant to IPs and their staff?
  • What are the considerations prior to an appointment of an IP?
  • What is the risk of personal liability for an IP?
  • How can an IP discover what environmental permits are held by the company and whether there have been any previous breaches?
  • How long does it take to transfer environmental permits to a purchaser of the business?
  • What steps can an IP take to protect themselves from liability?
  • In what circumstances can an environmental permit be disclaimed as onerous property?
  • more

What are the main laws and regulations governing this area?

There are three main sources of environmental law that an insolvency practitioner (IP) should be aware of and which may result in personal liability for the IP. These are:

  1. contaminated land legislation (the Contaminated Land Regime)

  2. other regulatory regimes (expanded below), and

  3. third party civil claims

Contaminated Land Regime

Local authorities have a duty under the Part 2A of Environmental Protection Act 1990 (EPA 1990) to:

  1. investigate their areas for the presence of contamination

  2. identify contaminated land, and

  3. require clean-up where appropriate

If the authority identifies contaminated land, liability for cleaning up the contamination rests initially with Class A persons. This can be:

  1. the original or subsequent polluter—Class A ‘causers’, or

  2. any persons who knowingly permit contamination—Class A ‘knowing permitters’ (ie someone who is aware of contamination and who is in a position to do something about it but fails to do so—for example, if an IP is aware that oil drums stored on a property are leaking into the ground and fails to take steps to address the problem)

If no Class A persons can be found, the Class B owner or occupier would be liable.

IPs have statutory protection from liability under the Contaminated Land Regime unless the remediation is referable to an ‘unreasonable act or omission by the IP personally’.