Scottish Coal liquidators escape restoration costs

A COURT of Session ruling has cleared Scottish Coal and Aardvark TMC of legal duties to control pollution from opencast sites and restore the land.
Scottish Coal liquidators escape restoration costs Scottish Coal liquidators escape restoration costs Scottish Coal liquidators escape restoration costs Scottish Coal liquidators escape restoration costs Scottish Coal liquidators escape restoration costs

Courtesy Scottish Coal

Staff Reporter

Joint liquidators Blair Nimmo and Gerard Friar had gone to court to seek legal guidance about their responsibilities, particularly in regards to the enormous restoration bill left after the company went under in April.

The decision by senior judge Lord Hodge has left a question mark over who will pay for the multi-million dollar bill.

“The costs of restoring the sites and former sites in accordance with the planning conditions governing the sites and the planning agreements into which SCC had entered would be about £73 million. There is no question of SCC having the means to meet those planning obligations,” Lord Hodge said July 11.

The debate centred on the cleanup costs and the legal principle of a liquidator abandoning property, which, the court heard, was unprecedented in Scots law.

The only source of a liquidator's power to abandon was written in the UK Insolvency Act section 169(2) of the 1986 Act, which provided that "in a winding up by the court in Scotland, the liquidator has (subject to the rules) the same powers as a trustee on a bankrupt estate”, Hodge said.

“In summary, I consider that it may be possible for an owner to abandon land and circumstances may arise when, on a disclaimer by the crown, land becomes ownerless. I see no reason in principle why this should not be the case.

“If it is possible to abandon corporeal moveable property, it should be possible to abandon land. But in the absence of a statutory regime, it seems to me that the court should regulate such abandonment to prevent its abuse as a means of avoiding obligations.”

As potential costs may eventually fall to the taxpayer, the Scottish Environmental Protection Agency, Scottish Natural Heritage, East Ayrshire Council and South Lanarkshire Council were also involved in the hearing, reported BBC News. East Ayrshire Council declared after the hearing that it was likely to appeal the judgement.

Environmental organization the Royal Society for the Protection of Birds has condemned the ruling.

The group has called for a public inquiry into failure of the regulatory system and wants new consents halted until this happens.

“This is a dreadful decision for Scotland’s environment and communities,” RSPB Scotland regional director Anne McCall said in a statement.

“It is unthinkable that private companies can cause such damage and then walk away when finances get tight. We simply cannot wipe the slate clean when such a terrible legacy has been left by Scottish Coal and Aardvark.

“The local planning authorities had a duty to ensure that bonds and legal agreements were in place to guarantee this could never happen. Their failure to do this has not only created a significant environmental problem but also raises very serious concerns about the risks involved in consenting further decisions for opencasting or other developments.”

Hargreaves Services recently struck a deal with the liquidators which will see it re-start operations at five opencast coal mines, close down SCC and hire 300 people over three months, rising to 500 within a year.

The company is not taking ownership of the five mines, due to the costs linked to restoration once the mineworking is finished.