Pressing for consistent environmental liability laws

Despite its long and rocky start, European Environment Commissioner, Ritt Bjerregaard, is committed to introducing a directive on environmental liability which will make the polluter pay for environmental damage. Pamela Castle, head of environmental law at Cameron McKenna, looks at the legal basis of the directive.

The European Environment Commissioner, Ritt Bjerregaard, tabled her Communication on ‘Community Action as regards Environmental Liability’ at a meeting of the European Commissioners on 29th January 1997 with a view to introducing a Directive on ‘Environmental Liability.’ Under such a Directive the polluter (that is, the entity which has caused the environmental damage) would be required to bear the cost of remedying the environmental damage it caused, in accordance with the ‘polluter pays principle,’ a concept introduced under the first EC Environmental Action Programme in 1973. As a follow up, the European Commission is to produce a White Paper on Environmental Liability probably in late Summer this year.

Environment Commissioner Bjerregaard: facing an uphill task

Deep opposition

There remains, however, deep opposition to the proposal from within the European Commission and from some Member States (including the UK), together with industry, financial institutions and the insurance industry. It was primarily as a result of this opposition that Jacques Santer, the then President of the European Union, aborted developments in 1995.

Arguments in favour of the proposed Directive, however, were resurrected again in April 1996 by Ms Bjerregaard following the completion of two studies which were organised by the European Commission: one a comparative analysis of the environmental legal liability systems throughout the European Union and a number of other countries (‘legal study’) which was carried out by the Author and her team at McKenna & Co (now Cameron McKenna) and the other an economic study by the environmental consultants ERM.


The legal study, which covered some 15 countries, demonstrated that throughout these countries the requirements on a polluter to compensate for environmental damage and reinstate arises under a variable mixture of civil, criminal and public law. The UK is probably somewhat unique in that environmental pollution incidents are covered by criminal law, subject to fines, custodial sentences (at least in theory) and compensation orders made at the discretion of the courts. It is by means of a compensation order that the court will require the defendant to reinstate the environment to the status quo ante and thus remedy any environmental damage caused. For example, the court has the power to order that a river depleted of fish stocks by a polluting incident is reinstated with new fish stocks at the cost of the polluter. That having been said, the major area of environmental liability in the majority of Member States of the European Union (which are relevant as far as the proposed Directive is concerned) is a mixture of civil and public law, rather than criminal law.

Traditionally, damage caused by one person to another, (that is to his person or his property), say for example by water or air pollution, is dealt with under civil or ‘neighbourhood’ law, with a remedy in damages, or in other words, financial compensation for the damage caused to the plaintiff by the polluter. This type of environmental liability is more or less the same throughout the European Union. The drawback as far as environmental protection is concerned is that the only person who can make a claim against the polluter is the person who has suffered personal damage, so that, in general, no claim may be made with regard to the ‘unowned environment’ and furthermore that the plaintiff having received the compensation by way of damages is at liberty to spend the money in any way he (she) chooses. There is no obligation on the plaintiff to spend the financial compensation to remedy the environmental damage in question.

Strict liability

For the most part, however, Member States rely on the state-appointed regulatory authorities to protect natural resources and the environment by delegating to them powers to require clean up orders, administrative fines etc. As Ms Bjerregaard states in her Communication, in recent years virtually all Member States have introduced, or are about to introduce, new laws on environmental liability. All the new regimes are based on strict liability, meaning that the persons which have caused damage are liable, regardless of fault or negligence on their part. However these new systems differ in many respects, such as who is liable, what defences are available and how the burden of proof is divided between the parties. In addition, Ms Bjerregaard states that in her opinion, the majority of Member State regimes do not adequately cover pure ecological damage involving “eco-systems, habitats, species of flora and fauna, aspects of water and soil etc.” (The UK Government has in fact incorporated most of these elements into the proposed regime for the remediation of contaminated land to be introduced by Section 57 of the Environment Act 1995 as a new Part IIA of the Environmental Protection Act 1990).

Furthermore the right of legal standing for environmental interest groups in connection with the restoration of environmental damage varies between Member States, although there is a growing tendency both in statute and case law for such legal standing to be applied more broadly. It would seem that empowerment of environmental interest groups or ‘access to justice’ is viewed favourably by Ms Bjerregaard as a powerful instrument to achieve reinstatement of the environment following damage.

Possible approaches

The 1997 Communication set out three possible approaches for consideration by the European Commission. They are:

introduction of an entirely new environmental liability regime incorporating all the aspects set out above with explicit provisions on liability for restoration of environmental damage; or

initial accession by the European Community to the so-called ‘Lugano Convention,’ that is the Convention of the Council of Europe on Civil Liability for Damage resulting from Activities Dangerous to the Environment (1993) followed by further development. Its key features which include application to specified ‘dangerous activities,’ no protection for the ‘unowned environment,’ the provision for access to environmental information, a defence that damage was ‘unforeseeable’ at the time and the application of joint and several liability are currently not quite in line with Ms Bjerregaard express intentions. There are problems introduced by this approach in that accession to the Lugano Convention could raise questions of external competence on which some Member States have expressed concern; or

a Directive on liability for environmental damage which would have the objective of filling certain ‘gaps’ at Member State level, in the areas of site clean-up and ecological damage but would not address the area of traditional types of damage such as personal injury and property damage. This approach would set clean-up standards (ranging from restoration to the original state to site-specific requirements based on ‘suitability for use’) and would avoid interference with traditional civil law rules.

Current proposals

It would appear that the European Commission is to propose the following, which will appear in the White Paper later this year. It is emphasised that these are broad issues of principle, and the Author cannot guarantee that some details will not change. They are:-

the first approach referred to above, namely a new framework directive, will be adopted and the Commission is no longer intending to use the ‘Lugano Convention’ model;

the Directive will be based on the polluter pays principle, the precautionary principle and the prevention-of-pollution-at-source principle;

there will be two principal areas of liability: liability in relation to so-called ‘dangerous activities’ (including the transport of dangerous substances) and liability in relation to activities harmful to natural resources such as those designated under the ‘wild birds’ directive and the ‘habitats’ directive. Liability under the first will be strict liability and liability under the second will be fault liability. One of the issues is whether once an operation is listed as a dangerous activity it becomes strictly liable for all damage caused by its operations or whether it will be limited to the dangerous activity part of its operation;

the liable party will be the operator who is in control of the dangerous activity;

where there is more than one polluter there would be ‘mitigated’ joint and several liability, which would appear to include some apportionment of liability between the operator and in some circumstances other liable parties;

a minimum standard to be set for clean-up throughout the European Union;

the burden of proof to be on the polluter to prove they had not caused the damage in question;

offences to include force majeure, third party intervention and contribution by the plaintiff;

regulatory compliance or the ‘state of the art’ defence not to be included;

an increase in the rights of citizens to bring actions against the polluters directly if the public authorities fail to act, but this is an area that may need to be developed gradually.

As Member States move significantly to new environmental remediation regimes tailored to address specific local issues (in accordance with the Subsidiarity Principle) combined with strong opposition from some commercial and political interests, it would seem, at least on current information, that Ms Bjerregaard faces an uphill task in introducing a European Community-wide system for environmental liability for remedying environmental damage.

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