PFAS – The ‘forever chemicals’ creating long-term legal risks in property

Per- and polyfluoroalkyl substances (PFAS) are emerging as a significant environmental and regulatory issue for anyone buying, selling, developing or managing property. Often referred to as ‘forever chemicals’, PFAS are increasingly drawing comparison to asbestos — in terms of their potential liabilities, widespread use and complexity of management.

What are PFAS and where are they used?

PFAS are a class of synthetic fluorinated chemicals first developed in the 1930s. With an estimated 14,000 compounds, PFAS contain carbon-fluorine bonds which are among the strongest in organic chemistry, making them particularly stable and resistant to degradation. This allows PFAS to persist in soil and water for decades, spreading and accumulating far beyond their original source and consequently raising long term environmental and health concerns.

PFAS have been widely used in textiles, upholstery and carpets, metal plating, pulp and paper manufacturing, firefighting foams, pharmaceuticals and cosmetics, non-stick cookware, electronics and food packaging. PFAS can enter the environment via various pathways such as industrial discharge, the use of consumer products, and waste disposal and as a result have been detected in groundwater, surface water and soil. As accumulation of these substances increases, the risk of presence within drinking water and food also increases.

Why are PFAS considered a risk?

The negative human health consequences of PFAS contamination are only starting to be understood. Increasing numbers of scientific studies have linked exposure to certain PFAS with a range of adverse health outcomes, including cancers, reproductive issues, and immune system effects.

Setting aside the human health consequences (which are not to be underestimated), the existence of PFAS has important implications in the real estate sector, not least in terms of remediation liability.

A 2023 report commissioned by the Environment Agency and produced by Jacobs UK Limited focusses on the economic burden of remediating high-risk sites. The report estimates that there are between 2,900 and 10,200 high risk PFAS sites in England with financial modelling indicating that remediation costs could amount between £31 and £121 billion. The scale of potential liability is therefore vast – and growing.

Potential legal liability

The nature of PFAS chemicals raises complex questions of causation and liability as well as issues around insurability.

Risk is exacerbated by the fact that the regulatory framework for PFAS in both the EU and UK is fragmented: there remains limited recognised assessment standards and until recently there has been limited guidance on regulation. This makes it difficult for stakeholders in the property industry to know what steps to take, or indeed to be able to assess,  potential liability.

The presence of PFAS may render land ‘contaminated’ under the statutory contaminated land regime established under Part 2A of the Environmental Protection Act 1990.  This is a tested and familiar legislative process following the “polluter pays” principle in the first instance. If no such person can be identified, then liability can pass to the current owner or occupier of the site (whether or not they were aware of the contamination).

Further property owners and occupiers can be liable under:

1. Criminal action under any breach of the Environmental Permitting (England and Wales) Regulations 2016, particularly where discharges to surface or groundwater occur without the requisite permits.
2. Civil action arising under private nuisance, public nuisance or personal injury claims.
3. Contractual claims arising from indemnities in earlier property sale contracts or lease provisions – where a standard clause that requires tenants to comply with all statutory notices, would include remediation notices.

What should property owners and occupiers do?

Due diligence is essential particularly for higher-risk sites such as airports, military land, chemical sites and water treatments plants. PFAS were not generally considered for testing by environmental consultants in the UK until the 2010s, meaning historic ‘clean’ reports could be misleading. Likewise, sites which have been remediated for more traditional risks may not have been remediated for PFAS.

For anyone buying, selling or developing land, taking a proactive approach to mitigate PFAS risk is crucial:

1. Enhanced due diligence – investigate historic site uses and confirm whether previous environmental assessments included PFAS testing.
2. New site investigations – PFAS testing should always be considered. Engage environmental consultants and insurance brokers with PFAS-specific expertise if required.
3. Contractual protections in sale contracts or leases – ensure lawyers negotiate clear indemnities and exclusions, allocating liability appropriately and setting clear time limitations and financial caps.
4. Insurance review – confirm whether PFAS liabilities are excluded or covered under existing or proposed policies.

Conclusion

The focus on the issues around PFAS contamination including the regulatory, legal and environmental frameworks governing them have undoubtedly intensified in recent years.  The persistent nature of PFAS combined with the complex regulatory framework means that discussions around PFAS contamination and associated liability will remain front and centre for many years to come. Environmental search providers are reviewing their approach to PFAS related risk and the risk profiles and we anticipate that they will also be developing advice on PFAS for inclusion in their reporting products.  It also seems inevitable that before long PFAS related litigation in the English courts will be brought. As the scale and extent of the PFAS issue and associated liability unfolds it is crucial to remain up to date with guidance. Useful sources include the Environment Agency website and CIRIAs good practice guidance (C819) published in November 2024.

How we can help

If you would like to discuss how PFAS may affect your projects, or to explore further resources, please get in touch with Kate Hughes in our commercial real estate team.