Civil environmental claims: how to avoid the costly consequences

In the event that an environmental incident caused by your company causes another individual or company to suffer a loss, then your company may face a civil claim. This could be in addition to any criminal regulatory consequences.

A civil claim resulting from an environmental incident will usually arise under the common law of nuisance (interference with another’s use or enjoyment of land) or negligence (where a claimant suffers a loss as a result of a breach of a duty of care owed by your company to the claimant). Shareholders are also increasingly challenging the decisions of companies on environmental grounds and pursuing claims through the civil courts.

The primary purpose of the civil law regime is to compensate a person or a company for losses suffered as a result of the environmental incident and the usual remedy is an award in damages. The Court also has the discretion to grant interim or final injunctions where appropriate, to prohibit or force your company to take certain steps to try to deal with the consequences of the incident.

How to minimise the impact on your resources

Civil claims can be very expensive if they’re not dealt with properly, and can cause a significant drain on management time. If your company is facing a civil claim, bearing in mind these six points will help you minimise the impact on your resources:

  1. Notify your insurers and check whether your company has any appropriate cover in respect of your company’s legal costs, any adverse costs and any payment of damages
  2. Obtain legal representation as soon as possible. It is important to have specialist civil litigation representation on board as soon as you are notified of a potential claim to protect your position
  3. Be aware that any admissions in the criminal regulatory proceedings may impact your ability to properly defend a civil claim. If you know that a civil claim is likely to follow, ensure that your company’s legal representatives and insurers are fully aware of the situation so that they can appoint an appropriate team to deal with the incident
  4. Think about whether it would be useful to obtain expert evidence to assist your case. Whilst obtaining expert evidence can be an expensive initial outlay, it can be used to help assess the strength of the claim against your company
  5. Consider an appropriate strategy to settle a credible claim as soon as possible. If your company accepts that the environmental incident has given rise to a civil claim for which it is liable, the sooner a claim is settled, the less your company or its insurers are likely to have to pay to the claimant. Consider arranging a round table meeting or mediation in the early stages of a claim before court proceedings are issued and a vast amount of legal costs are incurred
  6. Retain all documentation relating to the incident including electronic documents as they will need to be disclosed in any civil proceedings.

In addition to civil sanctions being pursued via a civil claim, the Regulatory Enforcement Sanctions Act 2008 (“RESA”) also gives environmental regulators the power to impose civil sanctions as an alternative to prosecuting in respect of breaches of certain environmental legislation. The Environment Agency has, for example, been given the power to impose civil sanctions for offences such as water pollution and hazardous waste.

Whilst each environmental incident will give rise to different issues in respect of any civil action, the above are key considerations to bear in mind should your company be faced with a claim to ensure that your company puts itself in the best possible position to defend or settle a claim on the best possible terms.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.