A disaster waiting to happen - and who could be liable?

Last week, 10th January, Crouchland Biogas was put into liquidation by FRP the administrators; prior to that in December the two Privilege directors (lenders to Crouchland Biogas) Phillip Neil Gerrard and Andrew Michael Vernau resigned as directors of Crouchland Biogas.

The big question is who will be held responsible for complying with the dismantling required by the enforcement notices and particularly addressing the gigantic lagoon of digestate that the EA is very concerned about?

Interestingly, one day before the liquidation, the EA served an Anti-pollution Notice on Crouchland Biogas in which they stated that “The Environment Agency is satisfied that poisonous, noxious and polluting matter, namely digestate ……… being stored in lagoon 3 is likely to enter controlled waters, specifically ditches designed to drain Crouchland Farm, as well as the River Lox which drains the catchment at this location, as a consequence of the failure of the integrity of the bund walls which retain the digestate in lagoon 3, and that works and operations are required to prevent the entry of this polluting matter”.

Previously in a report written for the EA and based on a site visit 12 months ago, an engineer reported that “The proximity of buildings below the lagoon suggest that an uncontrolled release of the contents could endanger lives not in a community. Moreover, environmental /pollution consequences of a major release of the digestate would be immense and there would be high costs associated with the clean up. These factors suggest that the lagoon is a high risk installation.” He went on to report that “he was concerned that little progress had been made with emptying, and that those responsible for the site either empty the lagoon as soon as practicable or implement properly designed works to stabilise the embankment as soon as practicable”

We don’t think it would be unfair to describe the situation as a disaster waiting to happen; that the severity of the risk has been known for well over a year by the EA; that those responsible for the site in that year, namely FRP Administrators acting for Privilege Finance have as far as we’re aware done nothing substantial to address the situation and that the EA yet again have proved themselves ineffective in protecting the environment.

What FRP the administrators have done is liquidate Crouchland Biogas Ltd and declare the environmental permits as “onerous property” in the hope that it removes them from any liability. Technically we’ve been told it can and it appears the EA think so to.

However it may not be that simple; it’s not our expertise but an article on line by Burgess Salmon suggests that Directors could still be liable if they had knowledge of an issue and reasonable opportunity to do something about it; they could also be subject to a civil claim. Land owners could be liable. Apparently there’s even a case in law where the insolvency practitioners could be held personally liable if there was a polluting effect, despite declaring onerous property. The article even suggests that lenders could be liable if they knew about it and failed to act.

So of course we hope that whilst everyone sits on their hands a disastrous pollution event doesn’t happen. HOPE, OF COURSE, IS NOT A STRATEGY.

All we can say is that should the unthinkable happen, no-one will be able to say they didn’t realise - and there are a number of entities who can be held to account.

The whole thing is ridiculous of course, but we’ve learnt to not be surprised anymore.

(A reminder that West Sussex County Council have closed all the footpaths near the lagoon, due to the dangers raised by the Environment Agency Engineer's report)