Environmental issues

Introduction

Environmental liabilities can contribute to the insolvency of a business, and must be fully considered and managed by insolvency practitioners (IPs) and/or the buyer(s) of an insolvent business or its assets.

Environmental liabilities include:

1. •

   liability arising from acts and omissions breaching a permit or conditions of a permit

2. •

   liability arising from the presence or escape of pollutants

When a company becomes insolvent, its environmental liabilities continue until it is dissolved. An insolvent company can still be prosecuted for its criminal liabilities (although the administrator's consent or court permission is required where the administration moratorium applies) (see Re Rhondda Waste Disposal.

When an IP can become personally liable for breaches of environmental law

An IP will be concerned to ensure that he does not become personally liable for breaches of environmental law during his period as officeholder. This overview sets out the three main sources of potential personal liability under environmental law of which IPs should be aware. These are:

1. •

   contaminated land legislation (contaminated land regime)

2. •

   other regulatory regimes

3. •

   neighbour claims