Increased risks for agricultural landowners following Powys landfill judgment

The Court of Appeal recently ruled that a local authority is not liable for pollution caused by its statutory predecessor landfill operators. This important judgment increases the liability risks for landowners living on or close to former landfill sites where they expected the local authority to be responsible.

The Court of Appeal in Powys County Council v Price has ruled that a local authority is not liable for pollution caused by its statutory predecessor landfill operators. This important judgment increases the liability risks for landowners living on or close to former landfill sites where they expected the local authority to be responsible.

Mills & Reeve and WYG consider the legal and technical issues for agricultural landowners.

Landowner grants licence to local authority to tip refuse

From the 1960s until 1993, Builth Wells Urban District Council and then the Borough of Brecknock operated a domestic and commercial landfill on part of a farm at Powys in Wales.

The farm owners entered into tipping licences with Brecknock allowing the council to tip refuse on the site. Under the licence Brecknock was responsible for restoration works to bring the site back into agricultural use.

After local government re-organisations, Builth council and then Brecknock council were abolished and in April 1996 Powys County Council came into existence. Under the Local Government Re-organisation (Wales) (Property etc) Order 1996, Powys took over the “liabilities” of Brecknock.

Powys council initially assumed that it had become legally responsible for the council landfill and undertook monitoring that revealed pollution of two local rivers.

The contaminated land officer at Powys then stopped the environmental works and terminated the tipping licences on the basis of R (National Grid Gas Grid (formerly Transco plc)) v Environment Agency decision where the House of Lords decided that National Grid was not liable for contamination caused by its statutory predecessors.

The High Court had ruled that Powys had taken over environmental liabilities for the landfill contamination.

The decision appealed

The Court of Appeal had to decide whether “liabilities” transferred to Powys in 1996 by the Local Government Re-Organisation Order included liabilities under the Part 2A contaminated land regime.

Under Part 2A of the Environmental Protection Act 190, Class A “causers” must be targeted first for remediation costs as the original polluter. In the event that no Class A person can be found, the landowner is liable as Class B owner.

The Court of Appeal held that Powys council did not take over the Class A causer liabilities of Brecknock in 1996 since the “liabilities” were not created until Part 2A came into force in Wales in September 2001.

Since the predecessor bodies had been abolished by statute, they could not be found as “appropriate persons”. The “liabilities” of the predecessor had not been transferred to Powys council and the innocent landowner was liable.

Landfilling in rural areas

Agricultural waste was excluded from the regulations that controlled the management of household, commercial and industrial waste until 2005 in Scotland and 2006 in the remainder of the UK. Agricultural wastes include slurries and manure (where not used as a fertiliser) discarded pesticide containers, plastics, bags and sheets, tyres, batteries, clinical waste, old machinery, oil, packaging waste, syringes and needles, unused animal medicines, asbestos cement roof sheeting and waste oils. Additionally, rural sites historically would frequently also take domestic waste.

In a survey by CIWM in 2003 there were 201,926 agricultural holdings within the UK. The Department for Environment, Food and Rural Affairs (DEFRA) acknowledges that in the past, many farmers relied on burying waste on their farms or sending waste to landfill, however because of the impact this has had on the environment and human health, laws have been introduced to prevent waste being buried on farms and to reduce the amount of waste being sent to landfill.

Landfill risks broadly include: 

  • The production of landfill gas: predominantly carbon dioxide and methane which is an asphyxiant and explosive at significant concentrations and has the potential to migrate laterally over substantial distances. The peak generation for landfill gas can often be 40-50 years after closure. 
  • The production of leachate: the liquid effluent produced as the waste decomposes and associated groundwater and surface water contamination. 
  • Settlement: the collapse of the landfill structure as the material decomposes, potential surface exposure of the waste mass and subsequent issues with drainage, rainwater ingress and creation of pathways.

Modern landfills are carefully engineered and include clay lined cells with membranes, active monitored gas and leachate collection systems. The structure is designed to fit into its landscape, with consideration of drainage, geology, hydrogeology, surface waters, wildlife habitats, livestock, built structures, residents and the final proposed land use after closure. A landfill post-closure management plan should anticipate no less than 30 years, and up to 100 years, of contamination generation.

The implication of a landfill in a rural setting is that it is typically isolated as a source in an environmentally sensitive area. This increases the liability because in the event of remediation, where costs can be substantial, material removal is limited by high landfill taxes. In addition, financial concerns cannot usually be offset by a subsequent development as would often be the case in an urban situation.

The long-term impact of a landfill can easily be overlooked for many years. Where risks have not been assessed the potential liability and potential for impact on the surrounding environmental setting is unknown. Addressing these concerns can quantify risks and costs, turning the perceived risk into a situation which can be addressed. While remedial action to address environmental liability can be substantial, it’s not always the case, and costs can be minimised with early consultation, involvement of the relevant parties, and mitigating against future risks.

What are the implications?

  1. There is a common misconception that contaminated land liabilities are based solely on the “polluter pays” principle – in Powys, the successor council was NOT responsible for contamination resulting from the council tip, even though its statutory predecessors operated the landfill, tipped the waste and were the responsible party. The liability of many landowners may now be significantly increased on this basis, as Part IIA cannot be enforced retrospectively to create a liability. 
  2. Agricultural landowners face potential clean up liabilities under Part 2A if pollution from landfills result in the site being designated as “contaminated land”. The liability risks are now increased if the local authorities operating the landfills were created by statute after 2000 in England or 2001 in Wales – ie no original polluters can be found or they no longer exist, so the Class B owner is responsible for clean up costs. Liabilities are highest in areas where the costs cannot be offset by a subsequent development. 
  3. It was not uncommon for agricultural landowners to enter tenancy agreements or licences with local authorities to permit landfilling operations. Although the Powys case focuses on Part 2A liability, in paragraph 52 of the judgment the Judge seems to indicate that the tipping licence might have imposed a contingent contractual liability that could have benefited the owners of the land. This stresses the importance of owners making sure that leases and tenancy agreements have “water-tight” liability clauses.

Keith Davidson consultant at Mills & Reeve and Hazel Gillings, Associate at WYG

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