Regulation of Environmental Liability in Hungary in the Context of the Civil Liability Protocol

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Regulation of Environmental Liability in Hungary
in the Context of the Civil Liability Protocol

• Gábor Baranyai
• Ministry of Environment and Water

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I. Structure of the Protocol

• An international liability scheme (Art.s 1-12,
  Annexes I-II)
• Procedures (private international law regime
  Art.s 13-20)
• Institutional matters (final clauses Art.s
  21-33).

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II. Analysis

• Comparison between the Hungarian domestic
  liability scheme and the international liability
  scheme of the Protocol.
• (A) Sources
• 1995 Environment Act (amended in 2007 to
  transpose Directive 2004/35/EC)
• 1959 Civil Code (contains reference to civil
  liability on environmental matters since 1979)

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• (B) Evolution
• CIVIL LIABILITY FOR ENVIRONMENTAL DAMAGE
• Long history of civil liability for environmental
  damage
• Laid down in the 1959 Civil Code and extended by
  the 1995 Environment Act
• Strict liability regime
• Traditional defences (force majeur, 3rd party
  causation, etc.)
• Land owner jointly and severally liable
• LIABILITY FOR THE PREVENTION AND REMEDIATION OF
  ENVIRONMENAL DAMAGE
• Introduced by the 1995 Environmental Act
• Basic provisions along Dir. 2004/35/EC
• Judicial practice underdeveloped, mainly
  focusing on civil liability
• Results on the ground groundwater soil (since
  year 2000)

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• TRANSPOSITION OF DIRECTIVE 2004/35/EC
• The existing administrative liability scheme
  significantly strengthened in terms of substance
  and procedures
• Four implementing government decrees
  adopted/amended on
• Groundwater remediation
• Surface water remediation
• Remediation of damage to biodiversity
• Emergency response measures
• Future further legislation on financial
  securities

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III. Main features of the Hungarian liability
scheme

• (a) Civil
• (b) Administrative
• III.1 Scope
• The purpose and the scope of application of the
  Protocol is limited. The Hungarian liability
  regime has a broad purpose and a universal scope.
  
• Limitations in the Protocol
• Scope of application limited
• damage
• on transboundary waters
• by industrial accidents

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• Environmental damage
• Protocol classical civil instances of damage
  (loss of life, injury, property, income) cost
  of environmental intervention (reinstatement and
  response measures)
• Hungarian law
• Civil law damage same as in Protocol
• Environmental damage broader than in Protocol
  (based on Directive 2004/35/EC)
• Receiving media
• Protocol transboundary waters
• Hungarian law any environmental media
• Source of damage
• Protocol accidents by hazardous industrial
  activities as defined by Art. 2 and Annex I
• Hungarian law any activity that involves the use
  of any environmental media

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• III.2 Type of liability
• Protocol strict liability as a general rule,
  traditional defences apply (force majeure, order
  of public authority, third party causation),
  fault-based liability for agents
• Hungarian law strict liability applies
  horizontally
• Civil law damage the defences are narrower than
  in Protocol
• Environmental damage defences as in Protocol

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• III.3 Financial issues
• Limits to liability
• Protocol limited corresponding to the degree of
  hazard posed by the activity (Annex II 10-40 M
  SDR)
• Hungarian law no limit whatsoever, guiding
  principle is full compensation
• Financial security
• Protocol mandatory financial security
• Insurance, bonds, other financial guarantees
• For the entire period of operation
• Hungarian law Government is authorised to
  introduce mandatory financial schemes,
  politically difficult, insurance industry not
  fully ready