Study of Civil Liability Systems for Remedying Environmental Damage FINAL REPORT. (as at 31st December 1995)

Transcription

1 Study of Civil Liability Systems for Remedying Damage FINAL REPORT (as at 31st December 1995) This report was originally prepared by McKenna & Co McKenna & Co is now known as CMS Cameron McKenna For further information please contact: Paul F Sheridan Head of Environment Law Group CMS Cameron McKenna Mitre House 160 Aldersgate Street London EC1A 4DD T +44(0) F +44(0)

2 Contacts List - Environment Law Group Contact Tel No. Address Paul Sheridan (Partner) Paul.Sheridan@cmck.com Daniel Chappell (Senior Solicitor) Daniel.Chappell@cmck.com David Short (Assistant Solicitor) David.Short@cmck.com Tom Bainbridge (Assistant Solicitor) Tom.Bainbridge@cmck.com Jenny McKenzie (Assistant Solicitor) Jenny.McKenzie@cmck.com Mark Rutter (Environment Information Advisor) Mark.Rutter@cmck.com Helen Harrison (Environment Information Advisor) Helen.Harrison@cmck.com

3 Contract B4-3040/94/000665/MAR/H1 Study of Civil Liability Systems for Remedying Damage TABLE OF ISSUES (as at 31st December 1995) to be read in conjunction with Final Report (Supersedes all other versions) Mitre House 160 Aldersgate Street London EC1A 4DD Tel No: Fax No: Contact: Pamela Castle, Partner, Head of Environment Law June 1996

4 STUDY 1

5 1. National Constitutions Refer to Study Report. Refer to Study Report. Refer to Study Report. Refer to Study Report. Refer to Study Report. Refer to Study Report. Refer to Study Report. Refer to Study Report. Refer to Study Report. Refer to Study Report. 2. The Legal Basis of Civil Liability state common (tort) law which is a mixture of strict and fault based principles. CERCLA is essentially administrative but individuals may re-claim clean-up costs under it. personal injury, property damage, pure economic loss, emotional distress etc.. ecological damage per se is not available in civil law. mainly fault based system of case law. Reversal of burden of proof and strict liability in a few circumstances. No strict liability for clean up costs. Damage Act 225/1994 introduces strict liability for environmental damage caused by listed major and hazardous plants. This Act only came into force in 1995 but should now be primary basis for compensation. personal injury, property damage and some economic loss. ecological damage per se is not available in civil law. largely superseded although remains under Water Act 264/1961 for damage caused by lawful pollution of surface waters. Neighbour Relations Act 26/1920 also applies to the environment under certain circumstances. Damage Compensation Act 737/1994 introduced a system of strict liability for environmental damage under which restoration costs may be claimed. These may include an ecological damage element. The most significant basis for environmental damage compensation is, at present, the Water Act 264/1961. personal injury, property damage and non-minor economic loss. ecological damage per se is not available (apart from restoration costs which may be claimed by individuals or the authorities) in civil law. French Civil Code. Fault liability under Articles 1382, 1383 and 1384 line 2. Non-fault (strict) liability under Articles 1384 to 1386 for objects in ones custody. Strict liability under Article 544 for neighbourhood disturbance. Article 544 most used for civil damage claims. personal injury, property damage and economic loss. ecological damage per se is not available in civil law. fault liability under paragraph 823BGB for damage caused negligently. Also liability under paragraph 906 BGB for substantial impairment caused by use of neighbouring property. Strict liability under paragraph 22 WHG and possible strict liability under paragraph 14 BImSchG. Primary basis is the Umwelthaftungesetz (UmweltHG) introducing strict liability for environmental damage. Little used in practice. personal injury, property damage, and economic loss. ecological damage per se is not available in civil law. fault liability under Article 2043 of the Civil Code. Stricter liability under Articles 2050 and 2051 of the Civil Code for dangerous activities or objects kept in ones custody. personal injury, property damage and economic loss. ecological damage per se is not available in civil law. fault liability under the Civil Code. Modified strict liability for certain activities including commercial users of hazardous substances, and operators of landfills. Primary basis for civil damages is the Civil Code. personal injury, property damage and economic loss. ecological damage per se is generally not available in civil law. Civil Code of Fault liability under Articles 1902 and More specific provisions include Article 1907 liability for damage caused by defective buildings and Article 1908 liability for damage caused by explosion of machinery. Article 590 introduces a rule on neighbourhood relations. personal injury, property damage and economic loss. ecological damage per se is not available in civil law. Civil Liability Act SFS 1972:207 and case law (common law). Liability is fault based. Also neighbourhood rules of code of land laws 1971:1209. Primary basis is Civil Liability Act SFS 1986:225. Liability is mainly strict although fault liability arises in narrow circumstances. personal injury, property damage and economic loss. ecological damage per se is not available in civil law. arises under common law (case law). The three main heads of liability are negligence, nuisance and the rule in Rylands - v- Fletcher. Liability in negligence and nuisance is fault based. Under the rule in Rylands -v- Fletcher liability is strict. Statutory civil liability is rare, although it exists under Section 73 of the Protection Act personal injury, property damage and economic loss. ecological damage per se is not available in civil law. The same civil liability rules apply in Northern Ireland. In Scotland fault based nuisance is the most important form of civil liability. Strict liability under the rule in Rylands -v- Fletcher does not apply although there may be strict liability in certain narrow circumstances. Through reversal of the burden of proof however differences from England and Wales are in practice minor.

6 3. The Overlap of Civil Liability with or Relative Position to Administrative and Criminal Liability A wide variety of statutes impose concurrent criminal/administrative liability. Certain powers reserved to Government (for example, clean-up orders or natural resource damages); otherwise Government and plaintiffs have a choice. No overlap; choice for regulatory authorities or police to bring action under administrative or criminal provisions respectively. Administrative orders and injunctions used. Civil liability may exist alongside administrative and criminal liability, although there may be overlap between different regimes of civil liability. Distinction between administrative and civil matters depends on the character of the claim. The distinction is not always clear. Civil claims can be brought as part of criminal proceedings. Civil liability does not flow from administrative liability. Remediation results mainly from administrative orders rather than civil law. Civil claims can be brought as part of criminal proceedings. Criminal proceedings are brought by the public prosecutor who has broader powers than individuals, for example in evidence gathering. A civil action will be stayed until the conclusion of a criminal action on the same case. The civil court will be bound by the findings of the criminal court. The administrative courts have competence in relation to all noncriminal environmental matters involving public authorities except damage to private property of public authorities which is a civil matter. Administrative authorities have powers to order clean-up or to clean-up and recover the cost. Civil liability is prevented by compliance with a licence. Under the UmweltHG civil liability exists even if a licence has been complied with. Plaintiffs can choose between old and new law. Certain criminal provisions require breach of administrative duties for liability to be imposed. Breach of administrative duties will also give rise to civil liability. Civil, criminal and administrative courts are separate and not bound by each other's decisions. A judgment will however be persuasive evidence. Under some legislation, the state may claim damages for breach of environmental regulations. A state may join criminal or administrative proceedings as "constituzione di parte civile". Criminal sanctions exist under administrative statutes although the courts alone may impose the sanctions. damages must be claimed through the civil courts. Decisions of the administrative/criminal courts will be a strong indication of proof. Often both civil and administrative remedies are open to the authorities who can generally choose which to use. Administrative authorities may impose fines by administrative order. These are not criminal penalties. Criminal offences arise both under the criminal code and environmental statutes. Administrative authorities determine clean-up requirements. Civil liability is normally independent of administrative rules and therefore may exist notwithstanding administrative sanctions. Administrative and civil liability therefore may arise from the same incident as may criminal and civil liability. Administrative and criminal liability cannot be imposed alongside each other. Administrative bodies may require reparation of damage but cannot act on behalf of individuals. Civil liability may be imposed along with criminal sanctions. A criminal court may be competent to decide on civil liability arising from the crime in question. A new Criminal Code was enacted in November It contains certain new environmental offences and comes into force in May Criminal and administrative systems act alongside the civil system. Breach of the penal code and sometimes of the administrative system allows action under the civil liability regime. Administrative bodies may not bring criminal prosecutions. They must refer the matter to the public prosecutor. Breaches of the administrative laws give rise to criminal liability. It is more common for environmental liability to be enforced by criminal proceedings brought by the administrative authorities. Private individuals may also bring criminal proceedings but more usually will make a complaint to the administrative authorities to require a "nuisance to be abated" or may make a complaint to the court. The Environment Act 1995 will give stronger powers to the administrative authorities to clean-up contamination. Where an individual requires compensation in damages a civil claim must be made against the polluter and a successful criminal prosecution may be brought in evidence. 4. Proposals for Change Proposals are under discussion to reform CERCLA, state clean-up standards and state tort law. The proposals in relation to CERCLA stem from the high cost of the Superfund system and the possibility of an alternative system. Political opposition to reform exists and to change the system may penalise those companies which have spent large Most statutes on environmental liability are relatively recent. Therefore no major changes are expected. The Committee on Soil Contamination set up in 1994 is due to report in early 1996 and may have proposals concerning historic and current contamination. Due to the recent substantial change in the civil liability system there are no major proposals for change. A committee has recommended further implementation of the Lugano Convention beyond that already implemented in the Damage Compensation Act 737/1994. A draft Bill harmonising different criminal offences and sanctions relevant to the environment is under discussion. There are no other significant proposals for change. There are no plans for general change of the UmweltHG although there is discussion on liability caused by waste. A new law on recycling of waste from 1994 is due to come into force in October There is a suggestion that all environmental laws should be codified into one environmental code. There are no major proposals for change. A working group in the Ministry of Justice is working on implementation of the Lugano Convention. A large amount of environmental legislation has been implemented in the last few years. There is a proposal for compulsory insurance for liability for damage caused through transport of hazardous substances by road. A proposal exists for a law on packaging. It is unclear when it will be enacted. No major changes are proposed, however codification of environmental laws is being considered. The Environment Act 1995, due to come into force in 1996 consolidates the functions of a number of regulatory authorities into one environmental agency and introduces a new contaminated land regime. A separate environmental division of the high court has been proposed by the

7 amounts to comply to date. For these reasons considerations for reform of Superfund in 1994 involved improving the existing system. No reforms however materialised. A wide range of proposals exist for reform of state tort law. Most of these go far beyond environmental damage cases but may be of great significance for civil liability in relation to contaminated sites. A draft law has been presented by the Federal Ministry of the Environment concerning protection of the ground. This law will relate to redevelopment of polluted land. Labour Party (the largest political opposition party). A review of the current rules and procedures of the civil courts in England and Wales has been made by the Lord Chancellor. The interim report was published in June The aim is to improve access to justice, reduce costs of litigation and modernise and simplify terminology and procedure. 5. Fault Liability Fault liability arises generally from the tort of negligence and nuisance. However in some states public nuisance with fault based components is used by the state attorney general's office. Most states apply the objective test of the "reasonable operator". This takes into account the state of the art and industry practice. The pleas that the plaintiff was contributorily negligent or knowingly assumed the risk have been largely abolished. All standard defences apply Fault liability arises from case law and still applies due to the limits of the Damage Compensation Act and the confusion over the scope of administrative rules. Regulatory authorities therefore sometimes use negligence instead of administrative law. The plea that the damage was not a direct or foreseeable consequence of the act plays a minor role today. The time when the relevant acts took place and the level of danger posed is relevant. A defence based on reasonable precautions is little used. All standard defences apply. Fault liability still applies under the Tort Act 412/1974 and a few other specific acts. The Tort Act 412/1974 has been largely superseded by the Damage Compensation Act 737/1994. An objective test of foreseeability applies based on the knowledge of other operators in similar activities. All standard defences apply. There are few fault liability cases before the civil courts as most environmental damage claims come before the criminal courts. Criminal breaches of environmental law give rise to civil liability. The required foreseeability appears to be that of a person specialised in potentially polluting activities. All standard defences apply. External cause is a potential defence but mainly applies to strict liability. Fault liability only arises under paragraph 823BGB in negligence. Foreseeability of a reasonable operator is normally sufficient. The standard of a highly skilled person only applies where the activity usually requires such qualification. Development risks are not normally considered foreseeable. All standard defences apply. Fault liability arises under the Civil Code and certain regulations and administrative orders. The standard of foreseeability of a reasonable person is normally applied. Where technical knowledge is required the standard of a reasonably skilled operator applies. Non-compliance with legal provisions can imply fault and the defence of reasonable precautions will not then exclude liability. Most standard defences apply. In relation to hazardous substances all measures capable of avoiding damage must be shown. Fault liability arises from tort under the Civil Code. Fault liability may also apply for the costs of a technical investigation and clean up costs under the Soil Protection Act An objective standard of foreseeability of the average operator is applied. Specialist and worldwide knowledge is required of large companies. In relation to soil protection liability requires knowledge of dangers of substances, and state of the art technology. Foreseeability is deemed not to exist prior to 1 January All standard defences apply. Fault liability arises from rules on negligence in the Civil Code although in practice pseudo-strict liability is imposed. Foreseeability must take into account circumstances of the actual persons and type of activity involved. In practice the standard of a highly skilled person applies in environmental cases. Reasonable precautions should in theory be a sufficient defence. In some cases the mere existence of damage is held to be proof of negligence. Fault liability arises under the general Civil Liability Damage Act Fault liability only applies under the Civil Liability Act 1986 where damage is "common locally" or "occurring generally". The level of foreseeability required depends on the level of risk. The court will consider national and international standards of care. All standard defences apply. Fault liability arises in the torts of negligence and nuisance. Negligence requires breach of duty of care. Nuisance requires unreasonable interference with use of land. In addition the plaintiff must show that the damage was reasonably foreseeable consequence of the breach or nuisance. Fault liability also arises under certain specific statutory provisions. The foreseeability of a reasonable operator taking into account the circumstances of the particular defendant is applied. This is part objective and part subjective. All standard defences apply. 6. Strict Liability Most major environmental statutes impose strict liability (for The Supreme Court has applied strict liability in relation to personal Strict liability arises under the Damage Compensation Strict liability arises under Article 1384 (for objects in ones custody) Strict liability arises under the UmweltHG and the WHG. Civil liability is generally fault based although under Article Strict liability arises under provisions of the Civil Code and Strict liability has mainly developed through caselaw. Otherwise it is Strict liability is the norm under the Civil In common law strict liability arises under the rule Rylands -v- Fletcher.

8 example, RCRA). State Superfund statutes also impose strict liability. The courts have interpreted CERCLA as imposing strict liability. Strict liability is applied under state tort law in relation to abnormally dangerous activities or nuisance. Nuisance and trespass are also frequently applied in terms of strict liability. Strict liability for sales of defective products, or misrepresentation in sales, has been applied in the environmental context. CERCLA does not apply to certain hazardous substances such as petroleum, nuclear material, agricultural pesticides etc.. These are generally covered by specific statutes. CERCLA sets out several affirmative defences, and some courts have also allowed equitable defences. Some further defences are set out in the Superfund reauthorisation bill which has not yet been passed. injury through asbestos and other hazardous activities. The Damage Compensation Act 225/1994 applies strict liability but is limited in its coverage. The Supreme Court has recognised strict liability in cases including damage from electricity cables and water, gas, oil and heat pipelines. In cases concerning clean-up costs caused by contamination of land or some watercourses the courts have rejected strict liability. A number of specific acts such as the Drinking Water Supply Act 337/1985 impose strict liability. Five major defences to strict liability exist under statute and common law. Compliance with a permit will not preclude liability. Act 737/1994. This should now supersede other legislation. The Supreme Court has imposed strict liability under Tort Act 412/1974 in relation to hazardous activities. The Neighbour Relations Act 26/1920 has provided for strict liability for certain types of nuisance suffered by neighbours. The Damage Compensation Act 737/1994 does not generally apply where there is special legislation. No defences are set out under the Damage Compensation Act 737/1994. A force majeure defence may be available. Legislation on nuclear and oil pollution liability lists the defences set out in the relevant conventions. It is unclear whether compliance with an authorisation will avoid strict liability. It is unlikely to be an automatic defence. and Article 544 (neighbourhood disturbance) of the French Civil Code. Liability in administrative law is also strict. Strict liability also arises under special legislation covering nuclear, oil and aircraft related damage. Specific legislation sets out available defences. Under general principles force majeure is a defence to strict liability. Compliance with an authorisation is not a defence to civil liability. Special legislation for nuclear damage imposes strict liability. Under UmweltHG compliance with an authorisation is not a defence. Under paragraph 22 WHG there is no liability if the requirements of an authorisation are being met; this is now of little practical importance. Under UmweltHG liability for a development risk exists. Act of God is a defence to strict liability. Where damage is insignificant or reasonable according to local custom liability under UmweltHG will not arise. Administrative strict liability is not subject to this limitation and 2057 of the Civil Code, there is somewhat stricter liability for dangerous activities and things in ones custody. Strict liability is also imposed under specific legislation covering inter alia nuclear damage and oil pollution damage. Defences to strict liability are mainly limited to Act of God. Compliance with an order and honest mistake will not necessarily avoid liability. environmental legislation. Special legislation imposing strict liability applies inter alia to oil pollution damage and nuclear accidents. A plaintiff can normally choose between claiming under special legislation or in tort. The available defences depend on the relevant legislation or provisions although force majeure normally applies. limited to operations or sectors with specific rules. The courts have interpreted Article 1908 of the Civil Code to impose strict liability. In addition the courts have developed strict liability in certain cases of environmental damage. Strict liability arises under specific legislation such as nuclear energy. Available defences include force majeure and consent of the victim. Compliance with an authorisation will not be a defence. Reasonable precautions may be a defence in relation to risk theory or under the principle that a person deriving benefit from an activity must also pay for the resulting damage. Liability Act 1986 which applies to most types of environmental damage. Case law has also developed strict liability in relation to high risk operations. Specific legislation regulates the nuclear industry and oil pollution damage. No specific defences exist under the Civil Liability Act A third party contributor to damage will be liable for his part. Although fault need not be shown reasonable foreseeability of damage is required. Recent case law may make this rule of great importance in the environmental sphere. Offences under administrative provisions and administrative liability for clean-up are usually strict. A number of special statutes covering nuclear, marine and gas related damage impose strict liability to compensate. A variety of defences are available under the rule in Rylands -v- Fletcher although compliance with regulations is not an automatic defence. Compliance with a permit will frequently be a defence to criminal liability. Reasonable precautions or due diligence are possible defences. Administrative liability for clean-up in some cases allows a defence of "best practicable means". 7. The Convention on Civil Liability for Damage Resulting from Activities Dangerous to The Environment 1993 (The "Lugano Convention") Not applicable. Denmark is not a signatory. Convention was considered but rejected. Finland is a signatory. Preparing for ratification. France is not a signatory. No plans to sign or ratify. Germany is not a signatory. No plans to sign or ratify. Italy is a signatory. Ministry of Justice is working on ratification. The Netherlands is a signatory. Implementing legislation is under preparation. Spain is not a signatory. No plans to sign or ratify. Sweden is not a signatory. Signing is expected soon. UK is not a signatory. No plans to sign or ratify. 8. Liable Persons (Under Civil, Administrative and Criminal Systems) anyone who causes the anyone who causes under the anyone who causes under paragraph 823BGB anyone who negligently anyone who commits a anyone who causes the under the anyone who fulfils the

9 damage or injury can be liable. under CERCLA, owners, operators, arrangers, generators and transporters can be liable. environmental damage can be liable. Owners of land and producers of waste have been held liable. under the Protection Act 358/1991 the "responsible party" is liable. Under other legislation the current owner is liable. An innocent purchaser may avoid liability. Damage Compensation Act 737/1994 the operator is liable along with persons comparable with the operator. A transferee may be liable where a polluting activity has been transferred. operators of industrial processes are normally liable. Some legislation lists the type of plants covered. Others refer to different types of activity, such as producing or treating waste. damage may be liable. In nuisance the owner is normally liable. There is a presumption of liability on the party using or holding an object under Article 1384 Line 1. a variety of persons may be liable under administrative laws. Particularly exposed to liability are operators and to a lesser extent the "détenteur" under law 76/663. Under law 75/633 on waste, the producer of waste or the "détenteur" of waste may be liable. In relation to mining and quarrying the last operator is presumed to be liable unless he can show his predecessor to have caused the damage. the tortfeasor (Täter) is liable. Under paragraphs 906 and 1004 BGB, the liable person is the interferer (Störer). Interferer is sub-divided between the operator (Handlungsstörer) and the owner (Zustandsstörer). Under the UmweltHG the proprietor (Inhaber) is liable. The proprietor is also liable under the WHG. liable persons in administrative law will be the owner or occupier or both. or unlawfully causes damage to the environment can be liable. An owner, user or occupier at the time of historic pollution can be liable. Article 18 of Law 349/1986 gives a broad definition of the liable person. In practice this will include: owners, occupiers and carriers; companies and their representatives; those carrying out certain specific activities. An innocent purchaser must report to the vendor any contamination within eight days of discovery or incur liability. tort can be liable in civil law. Normally this will be the polluter who may also be the owner or occupier. Where specific legislation applies imposing strict liability the liable person is identified in the legislation. for pollution of soil caused after 1 January 1975 the polluter is generally liable. Under the Soil Protection Act 1994 an innocent purchaser will not be liable. The Soil Protection Act 1994 establishes a hierarchy of responsibility from major polluters through minor polluters to major owners to minor owners. damage can be liable. It is arguable that an owner may be liable for damage caused by his polluted property even where he did not cause the pollution. Under Article 1908 of the Civil Code an owner of goods can be liable for the damage the goods cause. the liable person will depend on the specific ruling. Law 21/1992 on Industry imposes liability on: owners, managers or officers; persons involved in the installation, reparation, maintenance or use of industry where the contravention directly results from that activity; and producers, sellers or importers of products, devices, etc.. Civil Liability Act 1986 the landowner, leaseholder or anyone who uses property in the course of business can be liable. A landowner who merely receives rent will not be liable for pollution by a tenant. For historic pollution the polluter will be liable. However, an owner may have secondary liability. under the Protection Act 1969 "someone who performs or intends to perform a polluting activity" is the liable person. Operators are primarily liable. However, landowners have been held to carry out activities. There is evidence that the Licensing Board will seek "deep pockets". requirements of the common law may be liable. This will be anyone who causes nuisance or damage culpably. a hierarchy applies in certain circumstances under administrative law. These provisions intend to impose primary liability on the polluter and secondary liability on owners or occupiers. persons causing environmental damage or breaching administrative regulations can be liable. operators of processes are normally the liable persons. Directors and managers can be criminally liable. under the new environmental offences of the Criminal Code persons who carry out a variety of activities such as disposing of substances, transporting substances or transporting waste can be liable. the scope of persons who may be criminally liable is not limited. Most provisions apply to anyone who has committed a certain act. The law on listed sites imposes criminal liability on the operator. under the provisions of the criminal code the operator or whoever causes the pollution will normally be liable. criminal sanctions are aimed at the polluter or person breaching an administrative order or licence. Owners may have secondary liability where they have knowledge and do not act to avoid the damage. most criminal provisions are expressed very widely towards anyone causing pollution. Other provisions impose liability on, amongst others, the operator or transporter. criminal liability under the Criminal Code is expressed very widely but will tend to attach to operators or those handling hazardous materials. Within legal entities the person who is de facto responsible for the act is persons liable in criminal law are usually the operator or persons associated with the operator (directors or managers) offences for breach of licences or operating without a licence will apply to operators or polluters. Criminal liability is also imposed on those who "cause or knowingly permit".

10 normally liable. 9. "Channelled" Liability (Directors, Managers, Lenders, Parent Companies) Directors and managers may be liable. Lenders and parents may be liable. This is due to broad interpretation of the CERCLA statute. Liability of directors or managers is theoretically possible. The term "operator" under the Damage Compensation Act 737/1994 has not yet been interpreted but may include liability for directors and managers. Directors and managers can be prosecuted in criminal law. A parent company may be held liable as a person comparable with an operator. A lender can possible be liable under certain circumstances. In civil law the legal representative of a company may be liable. No examples exist. Board members and shareholders cannot be liable. In criminal law company principals or chief executives may be liable. Directors have not yet been convicted personally. No practice exists. Lender liability is not a possibility. Company employees and therefore directors or managers may incur liability subject to certain conditions. A parent company will only be liable in exceptional circumstances. This liability cannot extend to liability for environmental damage. Directors or managers may be liable if directly involved in the polluting event. This is less likely in larger companies. They may however have liability to the company. Criminal liability for directors and managers is more common. Parent companies and lenders are not potentially liable. Directors and managers may be liable if directly involved in the polluting event. This therefore is more likely with smaller companies. Lender liability may arise through foreclosure of a mortgage. Companies have been held liable where the relationship to the subsidiary is very close. Directors and managers may in principle be liable. They may also be liable to the company. Lender liability is unlikely but in principle is possible. Parent company liability is theoretically possible but no practice exists. Directors and managers have been held criminally liable. Lenders are unlikely to be liable as they do not usually go into possession when selling property. Liability through control of the board of a company is theoretically possible. A parent company may be liable but only if the subsidiary is its tenant. Liability of directors or managers in administrative or civil law is unclear. In criminal law many statutes contain a standard clause imposing liability on directors or managers etc.. Lenders may be liable through appointment of a receiver or through actual control of a company. Liability may be civil or criminal. Liability will depend on definition of terms in environmental statutes. Parent companies in actual control or which provide a cross indemnity may incur liability. 10. Allocation of Liability between Several Defendants Liability under CERCLA is generally joint and several, although it is rare for one polluter to carry the whole liability. If one party carries out clean-up it may usually recover a significant proportion. In common law, liability is joint and several. Under statute it is in theory joint and several but in practice can be proportionate. In administrative law liability is proportionate. Under the Damage Compensation Act 737/1994 liability is joint and several. Joint and several liability applies in both civil and administrative law. In civil and administrative law liability is joint and several. In civil and administrative law liability is joint and several. Liability under Law 349 of 1986 is proportionate. Generally liability is proportionate. Under the Civil Code however joint and several liability arises where two or more defendants are liable for the same damage. In civil law the general rule is that proportionate liability applies but joint and several liability is sometimes applied. Under the Protection Act 1969 liability is joint and several. Under the Civil Liability Act 1986 both joint and several or proportionate liability may arise. Civil liability is joint and several. Under administrative law liability is both joint and several and proportionate. 11. The Definition of Relevant Terms, for example "Environment" "Damage" " Damage" The majority of US environmental statutes define key terms which are then judicially interpreted. Definitions are not traditionally included. Under the Protection Act 358/1991 "damage" is given its normal definition. The Act is stated to apply only to damage caused by pollution. The term "environmental damage" is defined in the Damage Compensation Act 737/1994. "Environment" was considered impossible to define. "Damage" which may be compensated is also set out. Definitions arise mainly from case law. The term "environment" is not defined but the laws set out interests to be protected which form part of the environment. Case law and statutes include definitions. Particularly important is the term "environmental effect" (Umwelteinwirkung). There are no general definitions of environmental terms. Law 439/1986 contains a concept of "environment". Terms are defined in the Civil Code, case law and legislation. Damage is defined in the Civil Code. The Soil Protection Act 1994 defines "soil" and "soil pollution". The Air Pollution Act 1970 defines "polluting substances". Legislation does not clearly define terms and case law only provides broad concepts. The Civil Code contains a general concept of "damage". A possible definition of "environment" could be derived from criminal law (Article 347 of the Criminal Code) and administrative law (Article 6 of Royal Definitions are derived from the Protection Act "Environment" and "polluting activities" are not actually defined in the Act but have been defined in relation to the Act. Definitions of terms appear in statute and case law. The Protection Act 1990 contains definitions of "harm", "environment", "environmental damage" and "pollution". Section 78A of the Protection Act defines "contaminated land". "Pollution" has been

11 Decree 1131/1988). given a very wide definition in case law. 12. Where The Defendant is Insolvent or has Disappeared The Protection Agency may under CERCLA pay all or part of clean-up costs from the Superfund. It is, however, rare that the Government will not be able to sue a party with some connection to the site. Under The Protection Act 1969 Sections 69 and 70 the regulatory authority is responsible if no liable party is available. The Committee on Soil Contamination is considering the possibility of a damages fund. If no operator can be found, the state or municipalities must bear the cost of clean-up. A solution to this problem based on a fund and compulsory insurance system is the subject for a proposal for legislation. Criminal proceedings may be lodged against an unknown person. The public prosecutor will decide whether to proceed or not. If no-one is traced the matter is dismissed and filed. Where the defendant is insolvent damages cannot be recovered. No fund as yet exists. The authorities may be compelled to clean-up in the circumstances. A noise compensation fund does however exist in relation to airport noise. If no liable party can be found, the administrative authorities must bear the costs of clean-up but do not pay damages. A number of funds for the remediation of contaminated land exist in the different states of Germany. Some claims may be enforced against the successor of the polluter. No compensation to finance clean-up of environmental damage where the polluter is insolvent exists. A claim against an insolvent party must be filed with the receiver and may be pursued through the civil courts. A plaintiff may also try to find other potential defendants such as directors or managers. A judgment in the absence of the defendant is only useful if assets remain. An Air Pollution Fund exists for damage caused by air pollution. A voluntary fund, the Petrol Station Fund, created by oil companies exists for cleaning up former petrol stations. A victim may obtain damages from future wealth of a presently insolvent defendant. The state is not obliged to fund any clean-up but may repair the damage itself and bear the cost. Under the Administrative National Plan on Recovery of Contaminated Sites 1995 the authorities will in principle in future fund clean-up and seek to recover the costs. An Environment Protection Act 1969 claim has often been held as a priority claim in a bankrupt estate. This is not so for an Civil Liability Act 1986 claim, however, the environmental civil liability fund may provide compensation. Where the liable party is insolvent or has disappeared a plaintiff will recover no loss. No fund for compensation exists at present. A proposal exists for a landfill tax with a trust fund to remedy environmental damage. 13. Case Law and General Issues (Including Transboundary Pollution). See main report for examples of important cases. Although CERCLA is highly expensive and considered to be flawed, there is some reluctance to fundamentally reform it. CERCLA has led to increased compliance by industry and internalisation of environmental management. It therefore has a deterrent effect. Also tort claims are highly expensive. Defendants will settle smaller claims but plaintiffs are deterred by potential costs. The level of effectiveness of environmental law enforcement is disputed. The Protection Agency takes an optimistic view. Public officers in the municipalities appear confused as to the application of certain provisions due to dispute within the Committee on Contamination of Soil. Generally companies can be said to comply with environmental law and administrative orders and recommendations. The Damage Compensation Act 737/1994 only recently entered into force. No indication of its effectiveness is yet available. The Act is aimed at improving environmental law enforcement. To date, environmental liability has not been highly effective. Pollution problems remain unresolved often due to financial reasons. Most sites in the Inventory of Contamination Sites remain to be cleaned up. So far civil environmental liability has been unimportant. Administrative law is much more effective. Emissions from commercial plants have greatly reduced in recent years. Criminal courts, in particular, are beginning to take a strict attitude. organisations play an important role. Effective enforcement varies depending on the local situation and flexibility of environmental authorities. Under the Soil Protection Act 1994 the emphasis has shifted from state clean-up followed by civil claims to enforcement through administrative measures or clean-up orders. Enforcement of environmental law does not appear to be lacking. Enforcement of environmental law is steadily improving with increased public and political awareness. Criminal prosecutions are becoming more common. The more industrial regions have more developed and active regulatory systems. Regulatory authorities tend to take a co-operative approach, with industry. The Protection Act 1969 is of much greater importance than the Civil Liability Act The 1992 National Protection Agency Report showed that a large proportion of licensed plants had not established control programmes and more than half the number of plants not requiring licences had not made the requisite notifications. Criminal prosecutions are only brought in a relatively small number of cases. Enforcement through regulatory authorities is much more significant than civil liability. Regulatory bodies such as the National Rivers Authority (NRA) tend to prosecute only in serious cases. Prosecutions and cautions are only issued in relation to a small proportion of pollution incidents. Fines imposed by the courts appear to be at the lower end of the range possible and relate more to the type of incident than the defendant's resources. Clean-up costs are often recovered through criminal prosecutions. There are indications that the Environment

12 Agency will move from a strict prosecution policy towards a more cooperative approach with industry aimed at prevention. 14. The Relationship between Damages, Remediation/Restorati on Costs, Remediation/ Restoration Standards and Ecological Quality Objectives under tort law, damages for injuries to persons and private property are recoverable. Punitive damages are also available in most states. Under CERCLA "natural resource damages" are recoverable by government trustees. These cover damage to groundwater, air, geological and biological resources. Clean-up costs need not be incurred for these damages to be collected. tort plaintiffs need not generally clean-up to recover damages. n Costs: CERCLA only allows recovery of natural resource damages and clean-up costs which consist of removal costs in classical civil actions economic loss from damage to property is compensatable. Only the cost of remedying damage to public property can be claimed by administrative authorities not environmental damage itself. Punitive damages are not available. Private plaintiffs can claim clean-up costs to a level for whatever purposes they require. plaintiffs who are private persons have no duty to remediate. Public authorities must remediate damage with compensation. n Costs: generally necessary and reasonable costs of monitoring, prevention, clean-up and restoration of damage are taken into the Damage Compensation Act 737/1994 covers personal and property damage, pure economic loss, restoration and clean-up costs. Punitive damages are not available. a plaintiff has a duty to mitigate but there is no duty to use damages to clean-up. An administrative body can order clean-up irrespective of plaintiffs claim. Unreasonable damages will be reduced. n Costs: clean-up and restoration costs must be necessary and reasonable under Damage Compensation Act courts usually grant damages rather than require clean-up. The principle is that damage should be restored as much as possible to the situation prior to the damage. Accordingly, punitive damages are not available. Both damage to persons and property may be compensated. Interest groups may claim for damages to the unowned environment if the interests they protect are threatened. Damages are for the use of restoration. there is no duty on a plaintiff to use damages to clean-up. n Costs: all useful expenses for cleaning-up the site can be compensated. Where the state carries out clean-up, costs will be damages under UmweltHG and WHG or BGB cover any financial damage and consequential loss. Costs of remediation are also included. Damages, however, need not be used for remediation purposes. Punitive damages are not available. there is no duty on a plaintiff to use damages to clean-up. n Costs: if remediation costs are unreasonable in relation to the value of the land or objects destroyed, they will be limited to that damages include damage suffered and gain not realised due to environmental damage. identifiable damage affecting quality of life may be available. Damages would include remediation costs. If quantification is not possible equitable criteria will be used. Punitive damages are not available. there is no duty on a plaintiff to use damages to clean-up. n Costs: remediation costs are not capped. Judges assess remediation costs based on expert reports. damages may include clean-up costs, losses suffered and profits foregone. Costs of limiting and determining damage may be claimed. Loss of enjoyment is also theoretically compensable. Punitive damages are not available. there is no duty on a plaintiff to use damages to clean-up. Administrative authorities are in practice likely to require remediation. n Costs: clean-up costs include direct costs of clean-up, investigation costs, consultancy fees, compensation includes damages effectively suffered and gains not realised. Punitive damages are not available. Law 22/1988 on Costs sets criteria for consideration where damages are difficult to evaluate. a plaintiff has a duty to mitigate, but there is no duty to use damages to clean-up. n Costs: plaintiffs must mitigate damage. Authorities have the power to order clean-up. There is in theory no limit to clean- under Civil Liability Act 1986 damages include loss of property value, loss of profits and clean-up costs. Punitive damages are not available. Duty to Plaintiff to under the Civil Liability Act 1986 there is no duty to clean-up with damages received. Administrative authorities are likely to require clean-up. n Costs: under Environment Protection Act 1969 clean-up costs must be reasonable under the BATNEEC principle. damages cover all losses which were a reasonably foreseeable consequence of the breach. Punitive damages are not available. Clean-up costs are taken into account in damages. a plaintiff has a duty to mitigate, but there is no duty to use damages to clean-up. n Costs: in civil claims clean-up costs depend on the reasonable foreseeability of damage. The aim is to restore the position prior to the tort.

13 (short term clean-up and investigatory costs) and remedial costs (long term clean-up and remedial technology costs). account. The Committee on Soil Contamination is considering the issue of clean-up costs. 737/1994. This applies to measures actually undertaken. The restoration principle applies and restoration costs are set accordingly. kept to a minimum. A few attempts have been made in specific fields to evaluate cleanup costs. value. The principle is for complete restoration. The responsible person under UmweltHG is liable for personal damage and property up to a total of DM 320 million. No cap on cleanup costs exists. personnel costs etc.. Those applicable to clean-up by governmental authorities are listed. Accountants' and lawyers' costs are not included. up costs. In practice authorities order cleanup but provide no guidance. The general tendency is for compensation rather than restoration. There is no maximum limit. Reasonableness of clean-up costs will depend upon the benefit to be derived, with only necessary measures taken. Under Environment Act 1995 the Environment Agency must take into account costs and benefits of any exercise of power. costs deemed to be inconsistent with the national contingency plan are not recoverable. Private plaintiffs must show that their clean-up costs are necessary. maximum limits were rejected prior to the Act on Damage 225/1994. Necessary and reasonable costs are taken into account. Only maxima relate to marine and nuclear damage. no explicit maximum limits exists. Clean-up costs must be necessary and reasonable. maximum limits on liability only in relation to oil pollution and nuclear liability. theoretical limit under UmweltHG for personal damage and damage to property of DM 160 million under both heads. Absolute maximum of DM 320. there is no maximum limit for liability. maximum limit of liability exist in relation to maritime accidents, transport of hazardous substances, oil pollution from ships and nuclear installations. No general maximum for clean-up costs exists. only maximum limit applies to nuclear damage. there are no maximum limits although clean-up costs must be reasonable according to the principle of BATNEEC. in civil liability no maximum limits to damages exists. Under the Protection Act 1990 the regulatory authority may recover reasonable cleanup costs. CERCLA encourages EPA to settle rapidly with parties who contributed a minor amount to contamination. So-called de minimis parties. no de minimis threshold for liability exists. Damage Compensation Act 737/1994 allows damages only if it is unreasonable to tolerate the disturbance. no de minimis threshold for liability exists. no de minimis threshold for liability exists. no de minimis threshold for liability exists. no de minimis threshold for liability exists. no general de minimis threshold exist in Spain. Law 13/1990 of Catalonia requires tolerance if emissions from a neighbouring site do not cause substantial interference. under Civil Liability Act 1986 and the pure economic loss of "some importance" is recoverable. no de minimis threshold for liability exist. n Standards: some states have numerical clean-up standards although no n Standards: under Protection Act 358/1991 restoration is to the n Standards: the principle is that the environment should be n Standards: no predefined levels of restoration are set. The circular of 3 December n Standards: no strict absolute cleanup standards exist although some standards n Standards: no absolute standards are set. Some general duties of conservation n Standards: the Soil Protection Act 1994 sets out the multifunctionality n Standards: standards relate to suitability to end use although practice is n Standards: no specific clean-up standards are set in the Civil n Standards: remediation standards are most common under planning legislation and