Law Lords make landmark ruling in contaminated land case

In a landmark judgment involving contaminated land five Law Lords have ruled that National Grid Gas (NGG) is not liable to pay for clean-up costs because of pollution caused by its statutory predecessors.

The now privatised energy giant went to the Lords following the decision by a High Court judge that the company was liable to meet clean-up costs associated with a former gas works site which had been redeveloped for housing in Bawtry near Doncaster.

This followed a case brought by the Environment Agency who argued in court that NGG should pay for the clean-up. It argued that although NGG had not itself caused the contamination it had taken over responsibility from the former gas companies which had.

Mr. Justice Forbes had concluded that the NGG should pick up the £700,000 bill for the clean-up costs because it was the "appropriate person" under the Environmental Protection Act 1990. The judge argued that the company should "step into the shoes" of its predecessors having acquired all of their assets, rights and liabilities.

But the Law Lords have disagreed. Lord Scott said the term "appropriate person" referred to the person who had "caused or knowingly permitted" the contamination, in this case coal tars left after town gas production between 1915 and 1948. He argued that it did not cover a successor to the business of that person.

"This is, in my opinion, a quite impossible construction to place on the uncomplicated and understandable statutory language," ruled the Law lord. Fellow law lords Hoffman, Neuberger, Walker and Mance agreed.

Had they upheld the High Court judgment the energy company would have become liable for clean-up costs at hundreds of sites which could have meant a bill running into hundreds of millions of pounds.

Read the Law Lords judgment here.

View the Environmental Protection Act 1990 here.

Roger Milne

5 July 2007