Contaminated Land Remediation and Redevelopment

Planning policy increasingly drives remediation, even of grossly contaminated sites. This is no bad thing. Contaminated land is remediated and restored to beneficial use, usually in an orderly fashion and to a standard which aligns with the redevelopment proposal and (therefore), critically, the development financial appraisal. In other words, it is remediation with a commercial purpose and, if the sums add up, a beneficial financial outcome (rather than a liability) for the developer.

However, for this to work, you have to get the remediation strategy just right. Developers and investors cannot afford to dilute development profit in excessive, unwarranted or unexpected ‘clean-up’ demands which can be enforced through the planning conditions. There is no such thing as a ‘cleaned-up site’: that is unrealistic, and unfair anyway to the developer, given the so-called ‘polluter pays’ principle. The ‘polluter’ is usually long gone.

It is common even for remediated sites to retain high levels of residual contamination. This is normal, and very often does not present an unacceptable risk. However, you have to ask – what is an “acceptable” risk? This will vary from company to company, from site to site. For developers, this will be about financial balance, whereas for investors and funders, it will usually have to be a very low risk or no risk at all. The risk ccasionally it can mask real liability. Developers (and even regulators such as the planning authorities) will tend to address the obvious risks such as human health risks from pollutant vapours getting into buildings. Of course, this is important and immediate, in the sense that it usually has to be addressed to secure practical completion. However, the potential for vertical and horizontal migration of residual contamination into sensitive deeper groundwater is often overlooked and is a common hidden liability trap. The high profile cases will get the press coverage and governmental intervention – see for example Sandridge-St. Albans case – but every contaminated site has such risk potential. The important action is to assess the risk in the particular case.

These kinds of risks can affect any real estate transaction, but Vincent Brown’s service in Contaminated Land Remediation and Redevelopment goes far beyond ‘real estate transaction support’ . There are some overlaps between the two, but the client objectives, the practicalities of delivery, the technical and contractual documentation, and the legal and inter-personal skills required, are all significantly different. For example, to deliver the optimum service in Contaminated Land Remediation and Redevelopment requires a combination of the following:

  • deep specialism in pollution, waste and contamination laws;
  • sound drafting skills in remediation, civil engineering, insurance and other specialist contracts (including for example in Design Liability);
  • day to day experience working with engineers, chemists and contractors; and
  • legal project management skills and experience.

Vincent Brown has these skills and experience, having been a practising lawyer in Contaminated Land Remediation and Redevelopment since 1997, but before that as a senior real estate lawyer in development work with two of Scotland’s largest law firms. Over the years, he has also developed the drafting skills of a construction and engineering contracts lawyer and a specialist insurance lawyer as applied to this sector.

Therefore, Vincent brings to this difficult area of legal practice a comprehensive package of critical specialist skills and experience:
• In-depth knowledge of pollution, waste and contamination law;
• ‘blank page’ drafting skills in bespoke contractual outcomes;
• working knowledge of the latest NEC, ICE, JCT, IChemE standard forms of contract;
• knowledge of how real estate transactions and property developments work;
• specialist pollution liability insurance contracts negotiation and drafting;
• legal project management and close interaction with contractors and engineers.

Full List of available specific service deliverables:

Managing historic contamination legacy liability:

  • Ensuring correct legal focus of site investigation instructions
  • Correct legal interpretation of site investigation data
  • Identification of priority issues – liability exposure irrespective of redevelopment
  • Identification of key legal exposures which will create redevelopment abnormal costs
  • Legal assessment of remediation options: risk v. cost v. legal exposure

Site acquisition related services:

  • Guidance on correct Heads of Terms (avoiding later arguments in main contract)
  • Commercially reasonable but protective specialist clauses in purchase contract
  • Sense-check of Vendor site data
  • Purchaser pre-acquisition site investigation and due diligence
  • Legal support on valuation issues and any price reduction strategy

Site Investigation related services:

  • Procuring the right consultants and fixing their remit
  • Securing contractual recourse and insurance for you and future investors
  • Drilling Contracts
  • Design responsibility
  • Clear legal interpretation of lengthy SI reports
  • Identification of the ‘real’ risk areas and priorities for remediation
  • Procuring necessary clarifications of SI conclusions
  • Assessing remediation strategies against legal obligations
  • Assessing remediation strategies against investment market demands

Funding related services:

  • Management of funder relationship as regards contamination risk
  • Drafting of correct and proportionate message to funders
  • Management of funder reporting
  • Negotiation of sensible lending agreement clauses related to contamination risk/remediation performance

Contamination and Planning Applications:

  • Management of risk assessment understanding of planning authority
  • Advice on terms of contamination/remediation planning conditions
  • Avoiding ‘blank cheque’ planning condition on remediation
  • Ensuring remediation planning obligations proportionate to risk
  • Avoiding expensive groundwater clean-up
  • Advising on implications of planning conditions

Environmental Impact Assessment – legal:

  • Early advice on applicability of EIA regime to the project
  • Legal review of EIA scoping and Environmental Statements
  • Avoiding later traps of challenge (NGOs, competitors)

Regulatory Permits for remediation and redevelopment:

  • Advice on permitting requirements across project
  • Advice on environmental permits aligned with remediation needs
  • Assistance in permit applications and negotiations with Environment Agencies
  • Management of overall project permits, variations, renewals
  • Assist/check remediation contractors’ permits fit remediation demands

Application of waste law and definitions:

  • Part of the ‘permits’ role
  • Excavated contaminated soils and groundwater = hazardous waste in law
  • Advice to maximise regulatory permission to treat on site and reinstate treated soils
  • Advice to minimise expensive offsite hazardous landfill or other disposal routes
  • Advice to client and contractor team on UK waste definition/recovery laws

Remediation/Construction Phase Contracts:

  • Professional team contracts: scope of services and warranties
  • Remediation tenders and contracts
  • Civil engineering earthworks contracts
  • Piling contracts – especially avoiding pollution pathway creation/indemnities
  • Design responsibility drafting
  • Concrete supply contracts
  • Warranties for investors and end users of development
  • Short-term Pollution Liability Insurance contracts (remediation/construction phases)

Monitoring and regulatory validation:

  • Guidance on pitfalls of inadequate monitoring
  • Advice on execution of sound monitoring and data recovery
  • Regular engagement with critical regulators to ensure early sign-off
  • Co-ordination of remediation works validation reports and regulator sign-off

Sales Data Room:

  • Provide client with correct template for data room
  • Avoid fatal error of not building data room from day 1 of remediation phase
  • Structure investor-friendly data room
  • Monitor upload and organisation of key data throughout remediation/construction phase

Sales Contracts specialist input:

  • Contracts of Sale to Investors
  • Contracts of Sale and Lease to long term users
  • Management of Data Room to ensure ‘clean break’ for developer from historic contamination liability

Guidance and specialist drafting can be provided to any one of the different ‘players’ in these contractual scenarios – sellers of contaminated land, purchasers, developers, funders and other investors, contractors, professional teams and end user-occupiers under long leases or FRI occupational leases.