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EU Court Limits the Scope of Environmental Liability for New Owners of Polluted Land

The Court of Justice of the European Union (the "CJEU") has shed light on the application of the "polluter pays" principle in the context of the EU’s Environmental Liability Directive. The judgment, handed down on 4 March 2015 in Case C-534/13 Fipa Group & Others, confirms that EU law does not require Member States to impose liability on the new owners of polluted land who are not responsible for that environmental damage.

The case at hand concerns land in Tuscany that had been contaminated by chemical substances as a result of activities carried out by the former owners, which had manufactured insecticides and herbicides on-site. The Italian authorities tried to compel the new owners, Tws Automation, Ivan and Fipa Group, to adopt "emergency safety measures" to protect the groundwater, even though the new owners were not responsible for the environmental damage.

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