Contaminated Land Inspection Strategy 2024 to 2029

Contaminated Land Remediation - Cost Recovery Policy

It is the aim of this policy to demonstrate the considerations and procedure that will be undertaken by Stockton-on-Tees Borough Council (hereafter 'the Authority') when pursuing the recovery of its costs expended in contaminated land remediation. This policy forms an addendum to the Council's Adopted Contaminated Land Strategy. It is an objective of this document to promote transparency, fairness, and consistency within the process of remediation cost recovery under Part IIA of the Environmental Protection Act 1990 and in compliance with the statutory guidance.

The policy specifies circumstances where the Authority would be prepared to consider waiving or reducing the recovery of remediation costs having given due regard to hardship and other relevant factors. The policy will be made available as appropriate in the pursuance of duties under the above Act.

Cost Recovery Principles

Costs incurred for remediation work carried out by Stockton-on-Tees Borough Council on contaminated land, as determined under Part IIA of the Environmental Protection Act 1990, can be charged to the relevant 'Appropriate person or persons', subject to certain conditions.

Stockton-on-Tees Borough Council will recover costs following the 'Polluter Pays' principle by virtue of which all reasonable costs of remediation are to be borne by the polluter where possible.

The Cost Recovery Policy is limited only to Stockton-on-Tees Borough Councils "reasonable costs". This includes any costs incurred by the Environment Health Unit or other Units of the authority in managing or carrying out remediation of any land determined as contaminated. However, the Council will always seek to do such work economically.

Section 78P of the Environmental Protection Act provides that:

(1) where, by virtue of section 78N(3)(a), (c), (e) or (f) the enforcing authority does any particular thing by way of remediation, it shall be entitled, subject to sections 78J(7) and 78K(6) to recover the reasonable cost incurred in doing it from the appropriate person or, if there are two or more appropriate persons in relation to the thing in question, from those persons in proportions determined pursuant to section 78F(7)..."

(2) in deciding whether to recover the cost, and if so, how much of the cost, which it is entitled to recover under subsection (1) above, the enforcing authority shall have regard:

(a) to any hardship which the recovery may cause to the person from whom the cost is recoverable

(b) to any guidance issued by the Secretary of State for the purposes of this subsection

Stockton-on-Tees Borough Council will aim to recover remediation costs in a manner that is both fair and equitable.

Cost Recovery Procedure

Stockton-on-Tees Borough Council will:

• identify the appropriate person or persons in respect to the designated contaminated land, as defined under the tests detailed in Section 78F under Part IIA of the Environmental Protection Act 1990
• determine whether any of the exemptions from liability under sections 78J, 78K or 78X (3) apply and then carry out the processes of attribution, exclusion, and apportionment of liability
• establish the reasonable costs incurred in carrying out the remediation action
• apportion these costs between any identified Appropriate Persons for the remediation actions carried out

Stockton-on-Tees Borough Council will itself be responsible for any fraction of the costs that are apportioned to itself as an Appropriate Person, or which relate to Orphan linkages from the process of attribution. The Council will consider whether the apportioned share of costs for the remediation actions would cause hardship on the relevant appropriate person or persons.

Where recovering costs from a Class A appropriate person who also owns all or part of the contaminated land, the Council may recover its costs by serving a charging notice on the land. A charging notice cannot be used in other circumstances. If the appropriate person does not repay the amount that the Authority is seeking to recover, then Stockton-on-Tees Borough Council will consider pursuing a remedy in the County Court or the High Court as appropriate.

Hardship and the Waiving of Costs

Commercial enterprises and small and medium sized enterprises

The same approach will be adopted to all types of commercial or industrial enterprises, which are identified as appropriate persons. This will apply to public corporations, limited companies, partnerships, or an individual operating as a sole trader.

The Authority may choose to take account of such adopted policies relating to economic development of the Borough when determining cost recovery decisions.

Small and medium sized enterprises are defined as an independent enterprise with fewer than 250 employees, and either an annual turnover not exceeding £40 million or an annual balance sheet total not exceeding £27 million.

The Authority will consider:

• whether recovery of the full costs of remediation would mean that the enterprise is likely to become insolvent and thus cease to exist; and if so, the cost to the local economy of such a closure
• the Authority will consider whether the full recovery of remediation costs would cause any small or medium sized enterprise that is the appropriate person, to become insolvent and thus cease to exist. The Council will consider reducing the cost recovery to the extent required to avoid making the enterprise insolvent
• the Authority will not waive or reduce the recovery of costs where an enterprise has deliberately arranged matters to avoid responsibility for the costs of the remediation

Trusts

Where the appropriate persons identified include those acting as trustees, Stockton-on-Tees Borough Council will assume that such trustees will exercise all powers, which they have or may reasonably obtain to make funds available from the trust or from borrowing that may be made available for the trust for the purpose of paying for remediation.

The Authority would consider waiving or reducing costs to a level that is equal to the amount that can be made available from the trust where total remediation costs would exceed those funds available.

The Authority will not consider reducing the costs:

• where the trust was formed for the purpose of avoiding paying the remediation costs
• to the extent that trustees have personally benefited, or will personally benefit, from the trust

Charities

The Authority will consider reducing costs so as not to jeopardise the charities' ability to provide benefit or amenity, which is in the public interest. The extent of such a reduction would depend on the individual circumstances of the case and charity and the measure of public benefit afforded by the organisation.

This approach will also be applied to charitable trusts and charitable companies.

Social Housing Landlords

The Authority shall consider reducing or waiving costs if:

• the Appropriate Person is a body eligible for registration as a social housing landlord under section 2 of the Housing Act 1996
• its liability relates to land used for social housing
• full recovery would lead to financial difficulties for the Appropriate Person, such that the provision or upkeep of the social housing would be jeopardised

The extent of the waiver or reduction considered should be sufficient to avoid any such financial difficulties. If hardship would be endured by the appropriate person or persons then the Authority would explore options to reduce the possibility of such hardship being incurred. These options may include considering whether it could recover more of its costs by deferring recovery and securing them by a charge on the land in question under Section 78P. Such deferral may lead to payment from an appropriate person either in instalments or when the land is next sold.

The Authority may also consider whether cost recovery would be less likely to cause hardship if repayment was to be made in instalments over time. This may be particularly relevant where the Authority is able to secure its costs through a charging notice.

Specific considerations for Class A Persons

The Authority will not be willing to waive costs where it was while carrying on a business that the Class A person caused or knowingly permitted the presence of the significant pollutants. Reduction of costs will be considered where the person was not carrying on a business as he or she will be less likely to have earned profit from such an activity.

Where other potentially appropriate persons have not been found

The Authority will consider waiving or reducing its cost recovery from a Class A person who satisfactorily demonstrates that:

Another identified person who cannot now be found, also caused, or knowingly permitted the significant pollutant to be in, on or under the land in question; and

If that other person were to be found the Class A person seeking the waiver or reduction would either be excluded from liability by virtue of the Exclusion Tests set out in Part 5 Chapter D or the proportion of the costs would be significantly reduced by virtue of the guidance on apportionment in Part 6 Chapter D.

Specific considerations for Class B Persons

Costs in relation to land values

In some cases, the costs of remediation of a site may exceed the value of the land in relation to its current or proposed use.

In such cases the Authority will consider waiving or reducing its cost recovery from a Part B person where that person satisfactorily demonstrates that remediation costs do indeed exceed the lands value. In this context 'value' will be taken to mean the value that the remediated land would have on the open market at the time the cost recovery decision is made, disregarding any possible blight arising from the contamination.

The extent of the waiver or reduction in costs recovery should not exceed that which will ensure remediation is not greater than the value of the land in question.

Precautions taken before acquiring a freehold or a leasehold interest

The Authority will consider reducing costs recovery where a Class B person who is the owner of the land demonstrates to the satisfaction of the Authority that:

• he took such steps prior to acquiring the freehold, or accepting the grant of assignment of a leasehold, as would have been reasonable at that time to establish the presence of any pollutants
• when he acquired the land, or accepted the grant of assignment of the leasehold, he was nonetheless unaware of the presence of the significant pollutant now identified and could not reasonably have been expected to have been aware of their presence
• it would be fair and reasonable, considering the interests of national and local taxpayers, that he should not bear the whole cost of remediation

Owner occupiers of dwellings

Where a Class B person owns and occupies a dwelling on the contaminated land in question, the Authority will consider waiving or reducing its costs recovery where that person satisfies the Authority that, at the time the person purchased the dwelling, he did not know, and could not reasonably have been expected to know, that the land was adversely affected by the presence of a pollutant.

Any such reduction or waiver will only be granted to the extent necessary to ensure that the Class B person in question bear no more of the cost of remediation than it appears reasonable to impose, having regard to income, capital, and outgoings.

Where the appropriate person has inherited the dwelling or received it as a gift the above principles will be applied with respect to the time at which he received the property.

Where the contaminated land in question extends beyond the dwelling and its curtilage and is owned and occupied by the same appropriate person the above principles will be applied to the dwelling and its curtilage only.

Remediation under written agreement

In any case where the Authority has carried out remediation under the terms of a written agreement with the Appropriate Person or persons, any recovery of costs will be made under the terms of that agreement - the agreement is in effect a contract between the Council and the Appropriate Person or persons.

In a case of this kind, the normal cost recovery powers, in section 78P, do not apply, which means also that the limitations on recovery of costs relating to hardship and the Statutory Guidance also do not directly apply. The Appropriate Person in entering into an agreement with the Authority effectively waives their rights under the cost recovery policy and must abide by the terms specified by the written agreement.

Appropriate Persons seeking reduction or waiving of costs

In any case where an appropriate person is seeking a reduction or waiving of remediation costs the Authority will require:

• formal request made in writing to the Environmental Health Unit Manager
• the presentation of evidence in support of the above claim appertaining to one or more of the categories described above

The Authority will seek to obtain such information as is reasonable having regard to:

• how the information may be obtained
• the costs, for all parties, involved in obtaining the information
• the potential significance of the information for any decision

When the above circumstances are satisfied the Authority will give all due consideration to the request and provide the applicant with a decision in writing containing the reasoning behind how the decision was achieved.

In such cases a Charging Notice as specified by the Environment Act 1995 Section 78P would be served on the appropriate person. The Charging Notice shall:

• specify the amount of costs which the Authority is wishing to recover
• state the interest to be applied to the costs as determined by the Authority
• state the route of appeal available to the person concerned
• detail grounds for a charge on the premises concerned pursuant or otherwise to an appeal

Appeals against Charging Notices may be made to the County Court within the period of 21 days beginning with the date of service.

The Authority when seeking to enforce a charge under the above shall apply all powers and remedies, as appropriate, granted by the Law of Property Act 1925, and otherwise, as if it were a mortgagee by deed having powers of sale and lease, of accepting surrenders of leases and of appointing a receiver.