Irwin Mitchell
29 Contributions by Irwin Mitchell
PRACTICE NOTES
This Practice Note summarises the principal environmental and health and safety (EHS) considerations in an asset purchase transaction. The questions indicated can be treated as a checklist for:
the seller’s solicitors assembling the data room; and
the buyer’s lawyers assessing whether the EHS materials provided suit the nature of the business.
See Practice Notes: Environmental due diligence—asset purchase and Environmental issues when selling a company or business.
Contaminated land
Where an asset deal includes land, the parties must decide how legal and contractual risk for onsite contamination and any offsite migration will be allocated. If the property is ‘sold with information’, the seller’s legal liabilities under the contaminated land regime (Part IIA of the Environmental Protection Act 1990) will ordinarily move to the buyer. If the seller wants the cleanest possible break from contaminated land liabilities at completion, the asset purchase agreement (APA) and the
Environment
PRACTICE NOTES
EHS questionnaire
The buyer’s solicitors compile a legal due diligence questionnaire (DDQ) in the preliminary or due diligence phase. In some transactions, responses are added to the seller’s data room. The legal DDQ should always include environment, health and safety (EHS) questions. Even an office-based business will be subject to general EHS laws such as waste management duty of care, energy management and health and safety obligations. These enquiries can be tailored for the specific transaction or business type and added to legal DDQ or further enquiries...
Environment
PRACTICE NOTES
Completion and post-completion issues—asset purchase
Most completion and post-completion tasks in an asset purchase transaction are carried out by corporate solicitors, including:
the completion meeting
lodging notices with Companies House
compiling the transaction bible of signed documents
effecting any adjustments to the purchase price
Refer to Practice Note: Completion and post-completion issues—asset purchase...
Environment
PRACTICE NOTES
Commercial Property Standard Enquiries
The Commercial Property Standard Enquiries (CPSE) are the recognised pre-contract enquiries for commercial property transactions:
CPSE.1: Core enquiries for all transactions
CPSE.2: Where the property is subject to commercial tenancies
CPSE.3: On the grant of a new lease
CPSE.4: On assignment of a leasehold
CPSE.5: Before surrender of a rack rent lease
CPSE.6: Where residential tenancies exist
CPSE.7: Short-form enquiries for any transaction
Several CPSE address environmental issues across the forms. Solicitors should note environmental, health and safety and planning matters and may raise additional enquiries.
Additional environmental enquiries
Land contamination:
Known contamination, pollution, landfills, prior clean-up or remediation duties?
Any environmental reports?
Any underground storage tanks (USTs) now or previously? Give sizes,
Environment
PRACTICE NOTES
The asset purchase agreement (APA)
The asset purchase agreement (APA) is generally prepared during the preliminary or due diligence stage and completed within that same stage. The buyer’s solicitors typically produce the initial draft of the APA and send it to the seller’s solicitors for mark-up. Negotiations will often carry on until the APA is executed and signed finally...
Environment
PRACTICE NOTES
New starters share purchase transactions collection (EHS issues)—contract stage
During the initial or due diligence stage, the share purchase agreement (SPA) is ordinarily produced and then completed within that same stage itself, in practice. The purchaser’s solicitors usually draft the initial working version of the SPA and then send it to the seller’s solicitors for a mark-up. Negotiations can continue all the way through to the date on which the SPA is ultimately signed. The seller’s solicitors will prepare the...
Environment
PRACTICE NOTES
Commercial Property Standard Enquiries (CPSE)
The Commercial Property Standard Enquiries (CPSE) are widely regarded as the industry benchmark set of pre-contract enquiries for commercial property transactions:
CPSE.1: General pre-contract enquiries applicable to all commercial property transactions...
Environment
PRACTICE NOTES
EHS questionnaire
The buyer’s solicitors typically compile a legal due diligence questionnaire (DDQ) at the preliminary stage or during due diligence. In some deals, responses are uploaded to the seller’s data room. The legal DDQ should invariably cover environment, health and safety (EHS) matters. Even office-based operations must comply with general EHS laws, including the waste management duty of care, energy management and health and safety obligations. These enquiries can be adapted for the specific transaction or business type and included within the legal DDQ or raised as further enquiries.
For more information, see:
Environment, Health and Safety (EHS) due diligence questionnaire (DDQ)—share purchase
Environmental due diligence—share purchase
If the transaction involves a manufacturing business, or if additional health and safety information is required, the following can be used as a checklist on health and safety issues:
Precedent: Health and safety due
Environment
PRACTICE NOTES
Reviewing technical reports
If a technical environmental report has been obtained by the buyer during the due diligence process (or supplied by the seller in the data room), it requires interpretation, followed by clear, practical advice to the client on potential liability exposure and recommended measures to mitigate the associated risks. Key issues for lawyers to assess are:
Does the report set out clear evidence of environment, health and safety (EHS) non-compliance, capex needs or potential liabilities?
Should an independent environmental consultant be engaged to review and challenge the conclusions of the environmental report?
Would a conference call or meeting between the respective environmental consultants (with clients and lawyers present) help to resolve issues of concern?
Are any further investigations or enquiries required, and if so, what are the timing and cost implications?
What are the most
Environment
PRACTICE NOTES
Acting for a seller
The Precedent: EHS warranties—asset purchase agreement—seller’s version sets out a pared-back suite of environment, health and safety (EHS) warranties intended for use when representing a seller. The definitions are broad, and there are no warranties provided relating to contaminated land at all whatsoever...
Environment
PRACTICE NOTES
During the due diligence stage, the purchaser’s solicitors and other advisers have the chance to review the target business’s legal, technical and financial performance in depth...
Environment
PRACTICE NOTES
New starters share purchase transactions collection (EHS issues)—warranties
Acting for a seller
The precedent for Environment, Health and Safety (EHS) warranties in a share purchase agreement—seller’s version—provides a pared-back set of EHS assurances intended for use when representing a seller. Definitions are intentionally broad, and no warranties are offered for contaminated land. The warranties are limited to these core topics:
environmental permits
observance of EHS law
claims and litigation
Practitioner tip
Other warranties in the SPA can also bear on EHS matters, in particular:
general warranties on compliance, licences and litigation
property warranties (asbestos in buildings, neighbour disputes, land condition and flooding)
employee warranties relating to health & safety claims...
Environment
PRACTICE NOTES
Technical due diligence
If known or suspected non-compliance or land contamination arises, the purchaser, or preferably its solicitors, may appoint an environmental consultancy to perform a phase 1 environmental, health and safety (EHS) compliance review, or more invasive phase 2 investigations, to appraise the potential liability and overall financial risk...
Environment
PRACTICE NOTES
When is an indemnity needed?
Where issues are revealed during the due diligence phase, such as contaminated land liabilities or specific environment, health and safety (EHS) non-compliance, the purchaser may seek an environmental indemnity to be included in the asset purchase agreement (APA) or secured in a stand-alone environmental deed.
Refer to the following Precedents:
Environmental indemnity for an asset purchase agreement
Asbestos indemnity for when seller is in breach
Checklist for environmental indemnity
Once the principle of an environmental indemnity is accepted, lawyers and their clients should agree the scope before any drafting commences. Indemnities are tailored to the specific transaction. The list below highlights the key issues that ought to be considered.
Indemnifying parties: The purchaser may want the seller’s parent company added as guarantor.
Liability cap: Often set with advice from technical consultants. Note that clean-up liabilities could exceed the purchase price, particularly where there is
Environment
PRACTICE NOTES
When is an indemnity needed?
In a share purchase, the buyer assumes all environmental liabilities tied to the target and its subsidiaries. If due diligence uncovers contaminated land exposure or specific environment, health and safety (EHS) non-compliance, the buyer may seek an environmental indemnity in the share purchase agreement (SPA) or a separate environmental deed. The seller might also look for an indemnity from the buyer where, for example, directors or managers linked to the target remain with the seller. See the following Precedents:
Environmental indemnity for a share purchase agreement
Asbestos indemnity for when seller is in breach
Checklist for environmental indemnity
Once the principle of an environmental indemnity is agreed, lawyers and their clients should settle the indemnity’s scope before drafting starts. Indemnities are tailored to the individual transaction. The points below highlight the key issues to consider.
Environment
PRACTICE NOTES
When is environmental insurance appropriate?
Environmental insurance may need to be weighed up carefully in the following scenarios:
an environmental report flags significant concerns about contamination
environmental indemnity negotiations have reached an apparent impasse
there are ongoing concerns over the covenant strength of the indemnifying party
insurance is required by funders, tenants or to support the saleability of a high risk site
See Practice Note: Environmental insurance—when is it needed?
What type of policy?
The usual insurance in asset purchase transactions is a ten‑year fixed site policy, often referred to as an Environmental Impairment Liability (EIL) Policy or Premises Pollution Lability (PPL) Policy...
Environment
PRACTICE NOTES
When is environmental insurance appropriate?
Environmental insurance may warrant consideration in the following situations:
an environmental assessment identifies significant and serious concerns regarding contamination
environmental indemnity negotiations have reached a stalemate
there are ongoing concerns about the covenant strength of the indemnifying party
insurance is required by funders, tenants, or to improve the saleability of a high‑risk site
See Practice Note: Environmental insurance—when is it needed?
What type of policy?
The usual form of cover in share purchase transactions is a ten‑year fixed‑site policy, often referred to as an Environmental Impairment Liability (EIL) policy or a Premises Pollution Liability (PPL) policy. It can provide protection for the insured parties against regulatory action or third party...
Environment
PRACTICE NOTES
In the due diligence phase
At this stage, the buyer’s solicitors and other advisers are able to scrutinise the target’s legal, technical and financial performance.
The purpose of environmental due diligence is to:
evaluate the risk of taking on contaminated land liabilities connected to properties or former properties
identify any material non-compliance with environment, health and safety (EHS) law, environmental permits, or capital expenditure duties that the buyer could become accountable for
determine what protections are needed to reduce these risks as much as possible through further...
Environment
PRACTICE NOTES
Reviewing technical reports
If a buyer has secured a technical environmental report during due diligence (or the seller has placed one in the data room), it must be analysed and converted into clear, practical guidance for the client on potential liabilities, along with proposals to mitigate the risks. Key matters for lawyers to assess include:
whether the report presents clear evidence of environment health and safety (EHS) non-compliance, capex needs, or possible liabilities;
whether an independent environmental consultant should be engaged to review and challenge the report’s conclusions;
whether a conference call or meeting between the two environmental consultants (with clients and lawyers) would help resolve areas of concern;
whether further investigations or enquiries are necessary and, if so, the associated timing and cost implications;
which options are most practical to address the
Environment
PRACTICE NOTES
Environmental issues to consider
As environmental liabilities can stall or derail transactions, the parties should decide at the heads of terms stage whether any environmental matters ought to be raised, such as:
whether the landlord will supply environmental reports (desktop, phase 1s, phase 2s), asbestos surveys, or fire risk assessments?
who is the asbestos dutyholder, and whether the asbestos register needs updating, an asbestos management plan prepared, or asbestos remedial works undertaken?
whether the landlord’s EPC indicates a need for energy efficiency improvements?
whether the tenant intends to carry out a phase 1 environmental audit or a phase 2 baseline audit?
whether the tenant requires any environmental permits?
the agreed approach to contaminated land liabilities—will the landlord take responsibility for existing contamination, and should the tenant be liable for new contamination or for mobilising existing
Environment
1 Contributions by Irwin Mitchell Experts
![COVID-19 employment case law to June 2025: tribunal and appellate decisions on dismissal, discrimination (including long COVID), health and safety, vaccination/testing, furlough, flexible working and annual leave [Archived]](images/default-source/pa-pool/7.tmb-small.jpg)
PRACTICE NOTES
ARCHIVED: This archived Practice Note distils a selection of employment cases on coronavirus (COVID-19) highlighted by the Lexis+® UK Employment team, aiming to provide a snapshot of the kinds of disputes reaching tribunals and the stance being taken both there and on appeal. It is not a complete inventory of all significant decisions. Employment tribunal judgments sit at first instance and do not bind other tribunals. As tribunals decide matters by reference to the pandemic conditions and guidance in force at the relevant time, cases with comparable facts to those outlined below could now be determined differently. For matters that are appealed, see Practice Note: Case tracker—Employment.
The legal context
For general information on employer issues arising from coronavirus, see Practice Notes:
Health and safety—protection from detriment and dismissal
Living with coronavirus (COVID-19) in the workplace from 24 February 2022
Employment
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