Secondsite wins ground-breaking waste deposit claim

Burges Salmon LLP advised Secondsite Property Holdings Limited in connection with a £624,000 settlement in respect of its losses arising from the unlawful deposit of waste upon its property by an ex-tenant. Working closely with the Environment Agency, Secondsite was advised to make a civil claim after associated criminal proceedings had a resulted in a fine for the Defendant of £17,000. Such a claim is unprecedented and could prompt a wave of cases involving environmental pollution says Burges Salmon which reports on the background to the settlement.

Secondsite was the freehold owner of land at Leeside, Tottenham (the site). Secondsite allowed Deery Construction Limited (DCL) to operate the site under a series of tenancy agreements from 1991 to 2000. When Secondsite terminated the tenancy it was estimated that DCL had left 400,000 tonnes of various types of waste on the site. DCL went into liquidation in March 2000 shortly after the termination of its tenancy agreement.
DCL had used the site for its concrete crushing and soil screening operations. It had a waste disposal licence for this activity issued under the Control of Pollution Act 1974 which became a waste management licence under the Environmental Protection Act 1990 (the Act) when that came into force. The licence permitted the storage of 15,000 tonnes of inert waste in certain areas of the site. The waste remaining at the site was not stored in those areas and contained all types of waste including asbestos, old tyres and oil drums.
Once it had regained possession of the site Secondsite wished to sell it for development and, in order to do so, had to remove the waste from the site at significant expense. It knew it had contractual remedies to recover these costs but only against its ex-tenant, DCL, which was now in liquidation.
The Environment Agency were also concerned about the breaches of the licence and issued a summons against Kevin Deery, the director of DCL, for six offences arising from breaches of the licence. Kevin Deery pleaded guilty to three offences in the Haringey Magistrates' Court on 18 March 2003 and was fined £17,000. In terms of fines for environmental offences this was significant and was reported by the Environment Agency in its annual Spotlight Report for that year.

The civil claim
Despite the above fine Secondsite was significantly out of pocket. The Environment Agency had agreed to claim its losses as compensation within the criminal proceedings but the Magistrates' Court had concluded that it was too complicated for it to deal with and refused to pass it to the Crown Court to deal with.
At this stage it appeared that Secondsite were left without a remedy to recover its losses. However, a sub-section of the Environmental Protection Act provides that:
"Where any damage is caused by waste which has been deposited in or on land, any person who deposited it, or knowingly caused or knowingly permitted it to be deposited in either case so as to commit an offence under Section 33(1)... is liable for the damage."
No other case has been decided on the meaning of this sub-section. Nevertheless the facts fitted the sub-section and Secondsite brought the case against Kevin Deery on that basis. On the first day of the trial (which was listed for six days) Kevin Deery agreed to pay the substantial damages of £624,000 to Secondsite.

Co-operation with Agency
The case could only be brought by the significant co-operation between the Environment Agency and Secondsite. The Environment Agency provided copies of all of the witness statements relied upon in the criminal proceedings and allowed their witnesses to give evidence in the civil trial against Kevin Deery. However, the case shows the disparity between the fines given by the courts for environmental offences compared to the extent of damage caused by those offences.
Toby Wymer ,who ran the criminal proceedings on behalf of the Environment Agency, said: "This settlement clearly shows that even after the Environment Agency has brought its criminal prosecution illegal operators could find themselves back in court for the damage they have caused. This case shows how illegal waste operators could face huge costs compensating landowners or other third parties who have had to pay for the clear up and deal with the blight illegal waste dumping can cause."
Michael Barlow, a specialist environmental litigator at Burges Salmon, who ran the civil proceedings on behalf of Secondsite, said: "The case shows that it is possible for individuals and companies to recover losses arising from the unlawful deposit of waste. Further there are similar provisions in other Acts which regulate activities which harm the environment. These sections are rarely, if ever, used. It is important that companies and company directors are aware that if they pollute the environment they could be facing significant claims against them and it is also important for those who are affected by those offences to know that there may be a remedy available to them."

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