Regulation of Environmental Liability in Hungary in the

Context of the Civil Liability Protocol

Gábor Baranyai

Ministry of Environment and Water

2

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).

3

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)

4

(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)

5

• 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

6

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

7

• 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

8

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

9

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