Commercial analysis: In Bajaj Healthcare Ltd v Fine Organics Ltd, the court held that the contaminated chemical substance in question was supplied in breach of the implied terms of satisfactory quality and fitness for purpose. A product which satisfies the agreed specification may nevertheless not be of satisfactory quality if it contains a foreign object. Written by Kristina Lukacova, barrister, at New Square Chambers.

Any land in such a condition that significant harm is being caused or there is a significant possibility of such harm being caused.

What is an agreement on liabilities? Parties to a transaction may decide to address the allocation of known or potential remediation costs under Pt IIA of the Environmental Protection Act 1990 (EPA 1990) as an express part of a deal, eg when transferring land. An agreement on liabilities exists where: • two or more persons are ‘appropriate persons’ responsible for all or part of the costs of a remediation action • they agree, or have agreed, the basis on which they wish to divide that responsibility • a copy of the agreement is provided to the enforcing authority, and • none of the parties informs the enforcing authority that it challenges the application of the agreement An 'appropriate person' is the: • person(s) who caused or knowingly permitted the contaminating substances to be in, on or under the land in question (Class A), or • 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

Determining liability Enforcing authorities should follow the five step procedure set out in the statutory guidance for determining liability under section 78F of the Environmental Protection Act 1990 (EPA 1990). Not all stages of the procedure will be relevant in all cases. See Practice Note: Contaminated land—process for determining liability. Step five in the procedure requires the enforcing authority to apportion liability between the remaining members of each liability group. For any liability group which has only a single remaining member, that person bears all of the costs falling to that liability group. For any liability group which has two or more remaining members, the enforcing authority should apply the guidance on apportionment. Different considerations apply to Class A liability groups and Class B liability groups. Class A persons General principles When apportioning liability between the members of a single Class A liability group, the enforcing authority must determine the proportion of costs to be borne by each member of the group taking account of the relative degree of responsibility of each member for creating or

Determining liability Enforcing authorities should follow the five step procedure set out in the statutory guidance for determining liability under section 78F of the Environmental Protection Act 1990 (EPA 1990). Not all stages of the procedure will be relevant in all cases. See Practice Note: Contaminated land—process for determining liability. Step three in the procedure requires the enforcing authority to attribute responsibility for shared actions between liability groups. It does not apply where there is: • only one significant contaminant linkage (SCL), since that liability group bears the full cost of carrying out any remediation action • an orphan linkage, since the enforcing authority has the power to carry out the remediation action itself at its own cost • a single-linkage action, since that liability group bears the full cost of carrying out any remediation action 'Attribution' applies where one remediation action is a 'shared action', referable to two or more SCLs. This can occur either where: • both

What are Category 4 Screening Levels? Category 4 Screening Levels (C4SL) provide technical guidance for environmental consultants and regulators when assessing land affected by contamination. By testing the levels of contamination in soil against the C4SL values, an initial assessment of the risks to human health can be made. C4SL plays a key role in the contaminated land regime. If contamination levels in soil are found to be below the C4SL values, the regulators can dismiss the site as clearly not contaminated land. The screening levels can also be referred to in environmental reports submitted by developers in planning applications. Role of C4SL in the contaminated land regime Local authorities have a statutory duty under Part IIA of the Environmental Protection Act 1990 to identify and secure remediation of contaminated land in their areas. See Practice Note: Contaminated land—local authority duty to inspect land. Sites should be determined as ‘contaminated land’ if they meet the statutory definition, ie where: • significant harm is being caused or there is a significant possibility of such harm being caused,

Determining liability Enforcing authorities should follow the five step procedure set out in the statutory guidance for determining liability under section 78F of the Environmental Protection Act 1990 (EPA 1990). Not all stages of the procedure will be relevant in all cases. See Practice Note: Contaminated land—process for determining liability. Step two in the procedure only applies where there is more than one significant contaminant linkage (SCL) at the site. It requires the enforcing authority to determine what remediation actions relate to which SCLs. For more information, see: Contaminated land—risk assessment—What is a contaminant linkage?. A ‘remediation action’ is any individual

What is contaminated land? 'Contaminated land' is a specific legal term defined in the Environmental Protection Act 1990, Pt IIA (EPA 1990). The contaminated land regime imposes strict and retrospective liability. It requires local authorities (LAs) to identify contaminated land in their areas and allocate liability for historically contaminated land. 'Land contamination' is a general term used to describe any land that may be contaminated in some way, but not necessarily at levels that attract contaminated land liability. LAs must act in accordance with the statutory guidance issued by Defra or the Welsh Government when determining whether land is contaminated. Revised statutory guidance came into force in April 2012. The starting point for considering land affected by contamination is that it is not ‘contaminated land’ unless there is reason to consider otherwise. LAs should only determine land to be contaminated: • in a minority of cases • after a risk assessment has been undertaken • where there are unacceptable risks, and • where there is no appropriate alternative solution for dealing with the contamination For

Who makes the determination? Local authorities (LAs) have sole responsibility for determining whether land is contaminated land under Part IIA of the Environmental Protection Act 1990 (EPA 1990). They cannot delegate this responsibility, other than in accordance with their statutory powers under the section 101 of the Local Government Act 1972. LAs may rely on information or advice from the Environment Agency (EA), Natural Resources Wales (NRW) or a suitably qualified expert when considering whether to determine land. However, the ultimate decision must be made by the LA. In practice, the determination is likely to be made by an officer acting under delegated authority or by committee resolution. Whoever the decision maker is, they must ask themselves whether the land is, or is not, contaminated land. At this stage, it is not relevant to consider whether it is appropriate to serve a remediation notice. That question follows the determination. For example, in Shelley, a LA committee asked itself the wrong question when determining whether a statutory nuisance existed. It considered whether it was appropriate to serve an abatement

Due diligence in contaminated land transactions Lambson Fine Chemicals Ltd v Merlion Capital Housing Ltd 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

Consequences of non-compliance If a requirement in a remediation notice has not been carried out, the enforcing authority will need to consider whether to: • prosecute • commence civil proceedings • carry out the remediation work itself Prosecution for non-compliance Offence It is an offence to fail to comply with any of the requirements of a remediation notice without reasonable excuse. This means a person may be prosecuted even where there has been partial compliance with a notice. The question of whether a person has a reasonable excuse for non-compliance is a matter of fact to be decided on the particular circumstances of the case. Before bringing a prosecution, the enforcing authority should inform the appropriate person that it is considering taking this form

This Practice Note outlines the contaminated land enforcing authorities in England and Wales under Part IIA of the Environmental Protection Act 1990 (EPA 1990). Who is the enforcing authority? The enforcing authority for contaminated land under the Environmental Protection Act 1990 (EPA 1990), Pt IIA is: • in relation to a special site, the Environment Agency (EA) in England and Natural Resource Wales (NRW) in Wales • in relation to contaminated land other than a special site, the local authority (LA) in whose area the land is situated or affected The enforcing authorities must act in accordance with statutory guidance issued by the Secretary of State/Welsh Ministers. LAs must also have regard to any site-specific guidance issued by the EA/NRW.