Jerome O’Sullivan, Senior Associate Solicitor, discusses the process of dealing with an Environmental Contamination. For further information you can download Jerome’s white paper on the topic.
What is fuel oil contamination?
From fuel oil spillages at domestic or business premises, to giant ocean tankers leaking thousands of tonnes of crude oil – environmental contamination claims can happen at any scale.
By far the most prevalent type of claims are related to oil spillages at domestic or business premises, and it’s important to determine who is liable in case there is potential for a third party negligence claim.
Contamination can be caused by the following:
- Accidental oil spills or overfilling during a delivery or in transport.
- Defects and corrosion in the tank and pipework leading to leakage, and minor leaks leading to major contamination incidents in unoccupied buildings.
- A minor leak combined with a minor spark can lead to an explosion, rupturing the tank or pipework and resulting in thousands of litres of oil released into the environment.
In the event of a fuel oil contamination, the property owners and/or occupiers should take the following initial steps:
- Vacate the building(s) if there is any smell of oil.
- All individuals exposed to oil fumes should promptly consult their physician and arrange for toxicology tests.
- Promptly notify your domestic or commercial insurers of the incident, and any third party responsible, request details of their insurers, also notifying them of the incident.
- Seek your insurer’s agreement to move to suitable alternative accommodation until the buildings and surrounding land have been entirely decontaminated. The cost may be recoverable under the terms of your domestic or business insurance policy.
- Remove soft furnishings and absorbent materials from the property to mitigate any further contamination by the oil fumes.
- Any furniture that smells of oils should not be placed in any alternative accommodation, to minimise the risk of cross contamination.
- The property holders should promptly contact the Contaminated Land Officer at their local authority and request that they inspect and survey the contamination as soon as possible.
Assessing the severity of the contamination
The severity and the associated remediation costs of a spill are determined by a number of factors. Oil can migrate through topsoil, sand and gravel, and contaminate any nearby river or other water supply.
Hydrocarbons can aggressively attack damp-proof systems, drain seals, and damaged pipework can lead to contamination of the drinking water supply and the surface and foul water drains.
Individuals exposed to oil fumes can suffer from irritability, restlessness, drowsiness, dizziness, headache, nausea and vomiting.
Three things to assess:
- The contamination source
- The receptor (individuals, property or environment affected by contamination)
- The pathway (the route by which contamination has been allowed to affect the receptor)
Part 2A of the Environmental Protection Act 1990 defines contaminated land as that which may cause significant harm to the environment, human health or controlled waters. Soil, building materials, water and air samples will be taken and sent to a laboratory for testing to determine the extent of the toxicity, and a remediation report will be compiled outlining proposed remediation works and costs to the local authority and Environment Agency.
Comprehensive remediation of fuel oil spills can be very complex, expensive and time consuming, with entire properties sometimes having to be demolished to remove the contaminated soil beneath.
Property holders must:
- Instruct suitably qualified firm of environmental remediation specialists
- Seek the advice of a qualified structural engineer if any structural work is to be done
- Contact previous clients and follow up references to choose most reputable company
- All contractors to provide suitable warranties, guarantees and insurance for the works.
Under the Environmental Damage (Prevention and Remediation) Regulations 2009, the local authority has the power to serve notice to the polluter to complete the remediation work within a specific timeframe, or complete the work itself and recover the costs from the polluter.
Compensation – insurance claim vs third party negligence
Many domestic and commercial insurance policies do not cover the cost of remediation of oil spills, and expressly exclude any reduction in market value caused by oil spillage. It is this reduction that is often the largest head of loss in such claims.
If a third party is responsible for the contamination, there could be a case for a potential negligence claim; i.e. if an oil tanker was to overturn and spill its contents onto neighbouring properties.
In this case, the element of market value loss is in principle recoverable from the negligent party or their insurers.