Environmental liabilities, due diligence and insurance

Appointing a receiver offers creditors and certain other parties a means to safeguard their interests in a company’s assets. This note outlines the available forms of receivership and the key consequences of a receiver being appointed. For access to materials within the Receivership subtopic, refer to: Receiverships—overview. The following features apply across all receivership types: A company does not have to be insolvent to enter receivership Other creditors may still pursue claims despite a receiver being appointed During the receivership, the company’s dealings with property covered by the appointment are curtailed Receivership does not automatically lead to liquidation (the winding up of its affairs) Further points specific to particular receivership forms are outlined below. Law of Property Act ( LPA)/fixed charge receiver Under the Law of Property Act 1925 ( LPA 1925), a mortgagee may appoint an LPA...

What is insurance law? Insurance law divides into three strands: insurance contract law, setting the rules of the bargain between policyholders and insurers the law of intermediaries, governing insurance arranged via agents (as with the majority of placements) insurance company law, addressing prudential soundness, integrity and the supervision of insurers This Practice Note focuses chiefly on insurance contract law. For wider regulatory material, see our ‘regulation of insurance’ subtopic, including Insurance & Reinsurance—regulatory framework—overview and Insurance & Reinsurance— Regulated activities—overview. Reform of the insurance sector In January 2006, the Law Commission and the Scottish Law Commission (together, the Law Commissions) began consulting on modernising insurance contract law. Their programme was then separated into three streams: consumer insurance law reform: pre-contract disclosure and misrepresentation insurance contract law reform: business disclosure, warranties, insurers’ remedies for fraudulent claims, and late payment insurance contract law...

This Practice Note outlines the legal and regulatory landscape for assessing whether an arrangement amounts to a contract of insurance, and the potential ramifications of undertaking activities connected to such contracts without the requisite regulatory permissions. For more detail, refer to Practice Note: Identifying contracts of insurance in English law—an introduction, and the decision tree in Identifying a contract of insurance—flowchart. The legislative and regulatory background There is no precise or exhaustive statutory definition of a ‘contract of insurance’ in English insurance law. Under the Financial Services and Markets Act 2000 ( Regulated Activities) Order 2001 ( RAO), SI 2001/544, a ‘contract of insurance’ means ‘any contract of insurance which is a contract of long-term insurance or a contract of general insurance’. Determining whether an agreement is a contract of insurance is significant because such contracts are likely to fall within the meaning of a...

What is R22 gas? R22 (chlorodifluoromethane) is a refrigerant categorised as a hydrochlorofluorocarbon ( HCFC), which is an ozone-depleting substance ( ODS). ODS harm the ozone layer that shields life on earth from harmful UV radiation. The main ODS groups are: Chlorofluorocarbons ( CFCs) – compounds such as R12 are the most damaging ODS and were banned in the 1990s. Halons – chiefly used in fire protection systems and retained only for essential purposes like extinguishing aircraft fires; these applications will cease when alternatives are available. Hydrochlorofluorocarbons ( HCFCs) – the largest remaining use of ODS, mainly in refrigeration and air conditioning; R22 is an HCFC. R22 was developed to replace CFCs due to its lower ozone depletion potential, yet it remains a powerful greenhouse gas with a global warming potential 1,800 times that of carbon...

Following the close of the Brexit transition period ( IP completion day) on 31 December 2020, the UK stopped participating in the EU’s Emissions Trading System ( ETS). The EU ETS is designed to reduce the overall volume of specified greenhouse gases ( GHG) released by factories, power stations and other covered installations, by operating an allowance market within a cap-and-trade framework. For further information on the EU ETS and carbon trading, see the following Practice Notes: EU Emissions Trading System ( ETS) Phase IV— Directive 2003/87/ EC EU Emissions trading system—outline EU Emissions Trading System ( ETS) for aviation EU Emissions Trading System ( ETS) for maritime transport EU Emissions Trading System ( ETS II) for buildings, road transport, and additional sectors Carbon markets—basic principles and future developments Carbon...

ARCHIVED: This Practice Note has been archived and is not being maintained at present. Under the Kyoto Protocol, the developed economies listed in Annex I to the UN Framework Convention on Climate Change (the Annex I Parties) accepted specific targets to cut greenhouse gas ( GHG) emissions across two separate commitment periods. The initial period covered 2008 to 2012 and obliged Annex I Parties to reduce total GHG emissions by at least 5% below 1990 figures. The subsequent period spanned 2013 to 2020 and called for cuts of at least 18% beneath 1990 levels; however, after 2012 these obligations were not legally binding......

The RTFO The RTFO is one of the government’s principal policies to cut greenhouse gas ( GHG) emissions from fuels delivered for use in: road vehicles non-road transport, covering: non-road mobile machinery ( NRMM) inland waterway vessels that do not normally operate at sea tractors recreational craft that do not normally operate at sea alternatively powered trains that do not already fall within the definition of NRMM (eg hydrogen fuel cell-powered trains) alternatively powered non-road vehicles that do not already fall within the definition of NRMM aircraft maritime, but only where the fuel used is a renewable fuel of...

Carbon trading agreements While the contractual framework for trading carbon resembles that for other products, it also has several distinctive aspects. This note outlines those characteristics, concentrating on issues arising in compulsory regimes, chiefly the European Union’s Emissions Trading System ( EU ETS). After Brexit, the UK created a separate, self-contained UK Emissions Trading Scheme ( UK ETS). For further detail, refer to the section below on Brexit, the EU ETS, and the UK ETS. For context on the operation and rationale of cap and trade schemes, see Practice Notes: Carbon markets—international emissions trading schemes and Carbon markets—price of Carbon. Carbon trading—who and how? The range of actors permitted to join an emissions trading scheme, the market participants, is a key driver of market liquidity. Certain regimes, for instance the South Korean Emissions Trading Scheme ( ETS), confine trading to regulated entities or...

What are ozone-depleting substances? Ozone-depleting substances ( ODS) are synthetic chemicals that harm the stratospheric ozone layer, the shield that protects the earth from damaging ultraviolet radiation. They include chlorofluorocarbons ( CFCs), halons, hydrochlorofluorocarbons ( HCFCs), carbon tetrachloride and methyl bromide. ODS have been used in refrigeration equipment, air conditioning systems, fire extinguishers, aerosol propellants, solvents and as blowing agents in insulation foams. Background to the GB ODS Regulation The UK is a party to the 1985 Vienna Convention for the Protection of the Ozone Layer and the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer. The Vienna Convention is a framework treaty intended to: restrict activities likely to damage the ozone layer co-operation in collecting and sharing information on the effects of human activities on the ozone layer See Practice Note: Vienna Convention 1985 (protection of the ozone...

Introduction The escalating effects of climate change are creating fresh categories of risk for property owners, occupiers, lenders and lawyers. On 12 May 2025, the Law Society of England and Wales released its Practice Note on Climate Change and Property ( PN25), together with a supplementary Technical Note explaining physical climate risks. PN25 sets out how climate-related risks should be approached in property transactions across residential, commercial and mixed-use assets. These risks are not solely an issue for landowners or society at large; they carry legal ramifications too, as evidenced by the growing body of climate litigation. PN25 reflects the Law Society’s view of good practice and does not amount to legal advice. It recognises that certain subjects, such as the physical effects of climate change, extend beyond purely legal matters and that solicitors are not competent to advise on them. However, subject to client...

EU Emissions Trading System ( ETS) Following the close of the Brexit transition on 31 December 2020 ( IP completion day), the UK ceased participation in the EU’s Emissions Trading System ( ETS). The EU ETS aims to cap overall emissions of specified greenhouse gases ( GHG) from factories, power stations and other covered installations via a cap-and-trade allowance market. It began with Phase I in 2005 and is established by Directive 2003/87/ EC, as later amended by Directive 2009/29/ EC. Phase III started in January 2013 and concluded in 2020, with Phase IV spanning 2021–30. For more details on the EU ETS and carbon trading, see Practice Notes: EU Emissions Trading System ( ETS) Phase IV— Directive 2003/87/ EC EU Emissions trading system—outline EU Emissions Trading System ( ETS) for aviation EU Emissions Trading System ( ETS) for maritime transport EU Emissions Trading System ( ETS) for buildings, road...

Introduction Ambient air quality is, at its core, the state of the air outside. The WHO indicates that, in 2019, outdoor air pollution across both urban and rural areas was linked to an estimated 4.2 million premature deaths worldwide. This mortality stems from exposure to fine particulate matter, associated with cardiovascular conditions, respiratory diseases and cancers. The House of Commons Research Briefing— Air quality: policies, proposals and concerns ( HC Library, March 2025)—reported that the government regards poor air quality as the largest environmental threat to public health in the UK. It also noted that, beyond human health, air pollution carries consequences for the natural environment and the economy. Given the transboundary character of air pollution, measures to control and enhance air quality in the UK have been shaped by international agreements and EU legislation, together with national and devolved laws. The briefing further...

First developed in collaboration with Dr Justin Macinante of Edinburgh Law School, The University of Edinburgh. Revised by Dalia Majumder‑ Russell, Alex Ibrahim and Shinae Lee of CMS Cameron Mc Kenna Nabarro Olswang LLP. Conceptual context Emissions trading prices negative externalities—assigning costs to impacts that would not otherwise appear in the price of an activity, for example the release of greenhouse gases ( GHGs). Such trading schemes may take the following forms: Cap‑and‑trade—participants face a limit on their emissions and are either issued allowances or buy them to cover those emissions. If they exceed the cap, they must acquire additional allowances from entities with a surplus or pay a penalty at the end of the relevant compliance period. Accordingly, cap‑and‑trade arrangements are compliance...

Since the Brexit transition ended on 31 December 2020 (the IP completion day), the UK formally ceased taking part in the European Union Emissions Trading System ( EU ETS) framework. The EU ETS aims to curb the overall volume of specified greenhouse gases ( GHGs) released by factories, power stations and other regulated sites within the system by operating an allowance market under a cap-and-trade model. It began with Phase I in 2005 and is founded on Directive 2003/87/ EC (as later revised by Directive 2009/29/ EC). Phase III of the EU ETS started in January 2013 and concluded in the year 2020. Phase IV spans the period 2021–30. For further information on the EU ETS and carbon trading, consult the following Practice Notes and materials: EU Emissions Trading System ( ETS) Phase IV— Directive 2003/87/ EC EU Emissions trading...

Basic principles Carbon markets sit within the discipline of economics—the analysis of how limited resources are apportioned among rival uses, as set out by Lionel Robbins ( An Essay on the Nature & Significance of Economic Science, 2nd ed., revised and extended, 1949, Ch 1.3). Through this lens, a decent environment counts as a scarce resource. The central proposition is that by conferring property rights over greenhouse gas ( GHG) emissions—by ‘pricing carbon’—market participants can allocate this resource in a cost‑effective way. Consequently, a stated emissions goal (for instance, cutting emissions by 100% by 2050) can be achieved at the lowest overall cost. Setting a carbon price creates climate‑aligned incentives: it discourages carbon‑intensive behaviour and spurs investment in the low‑carbon economy, so that when actors face the social cost of high‑carbon goods and services, they switch to lower‑carbon...

The Fluorinated Greenhouse Gases Regulations 2015 ( F-gas Regulations 2015), SI 2015/310 Superseding and revoking the Fluorinated Greenhouse Gases Regulations 2009, SI 2009/261, the Fluorinated Greenhouse Gases Regulations 2015, SI 2015/310, give effect to Regulation ( EU) No 517/2014 on fluorinated greenhouse gases, which replaced and repealed the original instrument, Regulation ( EC) No 842/2006. Within Great Britain, assimilated Regulation ( EU) No 517/2014 (the GB F-gas Regulation) now applies as assimilated law. Across the EU, Regulation ( EU) 2024/573 repeals and replaces Regulation ( EU) No 517/2014 and took effect on 11 March 2024. Assimilated law is the term used for retained EU law ( REUL) that remains in force after the close of 2023. Re-badging REUL (and related concepts) as assimilated law indicates a change in its status and handling in UK law, such that it is generally...

Assimilated Regulation ( EU) No 517/2014 of the European Parliament and of the Council of 16 April 2014 on fluorinated greenhouse gases and repealing Regulation ( EC) No 842/2006 Entry into force: 9 June 2014, with application commencing on 1 January 2015. Implementing legislation in England and Wales: The Fluorinated Greenhouse Gases Regulations 2015, SI 2015/310 outline certification, assessment and attestation obligations, together with the offences and sanctions that apply to breaches of Regulation ( EU) No 517/2014. The Fluorinated Greenhouse Gases ( Amendment) Regulations 2018, SI 2018/98 introduce revisions, including replacing all prior criminal offences relating to fluorinated greenhouse gases ( F-gases) with civil penalties from 1 April 2018, except for the offence of deliberately releasing F-gases. Additionally, from 22 February 2018, a new offence was created concerning the disclosure of information held by Revenue and...

Carbon pricing: background Carbon pricing remains the principal tool in endeavours to tackle climate change. At the international level, the Kyoto Protocol and its flexibility mechanisms gave parties with Kyoto commitments market-based avenues to cap or cut greenhouse gas ( GHG) emissions, alongside domestic actions. These mechanisms comprise: Clean Development Mechanisms ( CDM) (art 12) Joint Implementation ( JI) (art 6) International Emissions Trading (art 17) These correspond to arts 12, 6 and 17, respectively. The Kyoto framework, in turn, prompted the EU’s Emission Trading System ( ETS), created through Directive 2003/87/ EC of the European Parliament and of the Council of 13 October 2003, which set up a Community-wide scheme for trading GHG emission allowances and amended Council Directive 96/61/ EC (the EU ETS Directive). Since then, an extensive and diverse suite of carbon pricing...

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...