Planning your legal response to an environmental crisis

Environmental incidents can come in many shapes and forms. So too do those regulators with the responsibility for their investigation and prosecution of those companies found to be in breach. The principal regulators come in the form of the Environment Agency, relevant Local Authorities and the Health and Safety Executive (dependent upon the nature of the activity giving rise to the offence), so there is no set approach to the regulation of all environmental offences.

Whilst the approach of each regulator can vary, companies can take reassurance from the fact that those actions to be taken in the aftermath of an incident are, for the most part, consistent across the board. Below is a summary of what companies should consider when an environmental incident has occurred.

Where to start?

First and foremost, does your company have in place an environmental incident contingency plan? As environmental regulation becomes increasingly high up on the board room agenda, many companies are applying their minds to such issues now in anticipation of the worst. A well formulated contingency plan, accompanied with appropriate training and understanding by all concerned, can facilitate decisions being made quickly and with certainty in the immediate aftermath of an incident.

No plan?

For those companies that do not have such plans in place however, fear not. The following steps should form the basis of your response:

1. Reporting of incident

The first question to ask is whether or not a company needs to report the incident. Answering this involves an analysis of what the company is required to report, to whom and where the requirement for such a report originates from. For example, reports to a regulator in relation to a specific incident differ from those on overall environmental impact to shareholders.

Most often, where a company already holds an environmental permit it will be a requirement of that permit to notify their regulator of an incident. However, where this is not the case companies should consider carefully whether there is a requirement to disclose this information and, even if not, could it in fact be in the company's best interests to do so. These considerations will often primarily be informed by the likely impact on ongoing operations, for example the suspension or revocation of an environmental permit, but should also look to longer term impacts upon criminal and civil liability.

2. Investigate the incident

The effectiveness of an incident investigation is often determined by both the speed with which it is commenced and, perhaps more importantly, the manner in which it is conducted. Environmental incidents, like any other, inevitably strike quickly and create ripples throughout organisations. What is required therefore is an appropriately constituted investigation team with an established remit, clear terms of reference and competent resource to conduct those initial investigations.

These investigations inform a company's understanding of the mechanics of the incident, potential liabilities flowing from it and, in turn, will inform both those commercial decisions that necessarily need to be made and also the company's approach to its regulator. Until the situation is properly understood, it is impossible to make informed decisions.

3. Legal representation

Third on the list, but entwined with the second, is appropriate legal representation. The appointment of legal advisors to lead/support the above investigation is beneficial for a variety of reasons. Not least, they understand the regulatory framework in which the investigation will be conducted and will therefore be able to advise upon the company's response at each stage of the initial investigation.

Equally as important is the status of those documents produced as part of any internal investigation. Ever present in such situations is the danger that 'warts and all' board/expert reports will be seized by regulators under their statutory powers and form the basis of a future prosecution. This situation can be entirely avoided by a legal team casting the 'cloak of legal professional privilege' over such investigations, thereby preventing their disclosure.

4. Media response

An important decision, and one that often needs to be taken quickly, is what media response - if any – should be made in respect of the incident. This month's article from specialist PR agency, Tangerine, addresses all of those relevant considerations.

5. Notify insurers

The costs of dealing with environmental incidents are likely to be considerable and flow from a variety of different sources: clean-up costs, fines payable as a result of criminal and/or civil proceedings, legal costs of representation etc. It is important, therefore, to not only consider potential cover by your insurer in respect of such costs but, where applicable, to ensure that any such recovery is not precluded as a result of a failure to notify your insurer and do so promptly following the relative triggering event.

Take note

As with all incidents, a company's response to an environmental incident needs to be measured but put into effect quickly. Whilst the above provides a checklist of some of those key factors for consideration in the aftermath of an incident, it is important to ensure that professional advice is sought so as to protect the company's short and long term position.

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.