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The House of Lords on Wednesday 27 June 2007 handed down its
judgment in the Bawtry case.[i]
The judgment, which has wide ranging implications for the
operation of the contaminated land regime (the Environmental
Protection Act 1990 Part 2 A), held that National Gas Grid PLC
(NGG) should not have liability for the contamination caused by
their predecessor gas undertakers.
The House of Lords pointed out that NGG did not cause, or
knowingly permit, any substances to be in, on, or under, the land.
That was done by the East Midlands Gas Board or its predecessor gas
undertakers many years before NGG came into existence. The court
went on to say that NGG was not the polluter, and had never been in
the business of producing coal gas as its business is, and always
has been, the transportation of natural gas. NGG had never been the
owner of any part of the site, it having been sold to developers in
1965, before the privatisation of the gas industry and before
liabilities for contaminated land were created by the Environmental
Protection Act 1990.
Andrew Wiseman[ii], head of the Environment team at law firm
Blake Lapthorn Tarlo Lyons, commented: "The House of Lords looked
at the very specific wording of the Gas Act 1986 where the
government privatised the gas industry. That Act talks about taking
over the assets and liabilities as they stood immediately before
the transfer date. As the House of Lords pointed out, the Bawtry
site formed no part of the assets transferred to British Gas Plc;
the site had been sold for housing over 20 years earlier and the
liabilities created by the contaminated land regime did not exist
when British Gas was floated.”
“Had the predecessors to British Gas still been in existence,
there is no question they would have had liability. Similarly, had
the developers still been in existence they would have had
liability. The precise wording of the privatisation, coupled with
the wording of the contaminated land regime, means that liability
did not pass to NGG. This case does not bring an end to the
contaminated land regime, but it does mean that very careful
consideration needs to be given when trying to pass historic
liability onto companies that have been either formed by mergers
and acquisitions or that have taken over other companies.
Regulators need to tread carefully and those who thought they might
have liability may find themselves off the hook.”
Andrew adds: “There are many housing estates around the country
built over former gas works where remediation was carried out to a
standard that may no longer be appropriate. This case will almost
certainly mean that NGG does not have liability, and in that case,
liability could well fall on the current owners and occupiers or
the public purse. Developers, local authorities and all those
involved with the contaminated land regime will need to give
careful consideration as to how to manage these issues.”
Contact: for further details, please contact Andrew Wiseman on
01489 555016 or 07748 980971.
[i] (R (on the application of National Grid Gas Plc formerly
Transco Plc)
-v- Environment Agency. The case was heard on 21st May 2007 and
judgment was handed down on Wednesday 27 June 2007- Reference
[2007] UKHL 30.
[ii] Andrew Wiseman has recently joined Blake Lapthorn Tarlo
Lyons as head of the Environment team. He specialises in
contaminated land and has acted for numerous local authorities when
they have been enforcing the contaminated land regime. He is
immediate past chairman of the UK Environmental Law
Association.
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