Traditional Danish liability law resembles that which one finds in other European countries. The fundamental condition that must be met before liability to pay damages applies is that the person causing the damage has acted negligently. This has not presented much of a hindrance to compensation in environmental cases, however. In a number of criminal cases Danish courts have set a rather low threshold for negligence and in Danish law one can conclude that if negligence is found in a criminal case, it will also be found in a civil case. In simple terms one can say that an enterprise that emits considerably more pollution than it has been given permission to emit will normally be convicted on the grounds of negligence, irrespective of whether the case is criminal or civil.
Another condition that needs to be fulfilled before one becomes liable to pay compensation is that there is an individual injured party. This is a considerable hindrance to liability in connection with environmental damages, the latter usually consisting of the enterprise having discharged more pollution to the aquatic environment or atmosphere than it has been authorized to do. In this situation there is no injured party, and a claim for compensation cannot therefore be submitted.
The limits for when Danish courts will accept that there is an individual injured party can be described as follows: In cases of soil pollution that are initially cleaned up by the State, the State is considered to be the injured party, and can therefore submit a claim for compensation. The course of such cases has been described in Section 10.8.
In a watercourse pollution case in which a farmer had discharged manure slurry and thereby killed the fish, the Western High Court accepted a lawsuit brought by the Danish Anglers Association, which releases fish fry into watercourses throughout Denmark in accordance with plans approved by the Ministry of Agriculture and Fishery. The Association claimed and won compensation for the cost of stocking the watercourse with fry to replace the fish killed by the manure slurry.
In a civil case a claim for compensation is only of interest if the party causing the injury is in a position to pay. It is Danish experience that the majority of parties causing major environmental damages are not in a position to pay compensation. In some cases the damage is caused by activities that are criminal through and through, and where those responsible have no means of paying. In other cases serious damage is caused by authorized but poorly run enterprises; when the bill is presented, however, it transpires that the enterprise is also financially unsound. Major emissions resulting from negligence occasionally occur at enterprises with good reputations, and they pay for the necessary remediation measures quietly in order not to attract attention.
In March 1993 the EC published a Green Paper on paying for environmental damages. The Green Paper recommends introducing strict liability for hazardous enterprises, but on other points it keeps all possibilities open. The Green Paper should probably be seen as a draft for a future Directive. However, the EC has for the time being set aside work on a special Directive on liability for damages caused by waste.
Also in 1993, the Council of Europe put forward its convention on liability for environmental damages. However, the Council convention contains, among other things, regulations on retroactivity and on the imposition of liability without causality. It has therefore not been signed and will not be ratified by Denmark.
In Denmark, questions relating to environmental compensation are the province of the Minister of Justice; as a result, the emphasis is on the liability side of things - and not on the environmental side.
In spring 1994, the Danish Parliament passed a special Liability for Environmental Damages Act. The Act contains two new points as compared with traditional liability law: The first is that strict liability for environmental damages applies in the case of specified enterprises - essentially those branches mentioned in Annex 1. Strict liability does not apply to owners of oil storage tanks of less than 6,000 litres, however, even though the Municipalities wanted this included. The other new point in the Act is that the statute of limitations is 30 years as compared with 20 years hitherto. The new Act applies for damages that occur on or after 1 July 1994.
Several interesting discussions preceded the Bill being laid before Parliament:
The nature organizations had wanted to have the right to bring lawsuits, but the Minister of Justice put forward the opinion that because of the requirement for an individual injured party, as referred to above, the organizations were not injured parties in the cases they were thinking of.
The committee that drew up the Bill had proposed obligatory insurance for those enterprises to which strict liability was to apply. However, the industrial sector would not accept that. The Confederation of Danish Industries expressed the opinion that the costs of insurance premiums - and the costs of what changes might be required by the insurance companies before they would insure an enterprise - would far exceed the compensation for environmental damages. The costs of insurance premiums were reckoned to be at least DKK 150 million per year. The costs of environmental damages has not been reckoned up, but perhaps lies between DKK 25 and 100 million per year (my estimate). The government removed the provision making insurance obligatory from the Bill.
At the suggestion of the Minister for the Environment the question of lender liability was also discussed. On this question the Ministry of Justice had stated, among other things, that the Bill should be interpreted as follows: "If on the other hand a lender has played a more active role in connection with the more detailed planning of the enterprise’s production, including relative to questions on measures concerning environmental matters, and if the lender has thereby had a direct or indirect influence on the subsequent environmental damage, then the lender could be held liable to pay compensation".
Progress can be summarized as follows: It is not liability legislation
that makes enterprises comply with environmental requirements, but the supervisory system,
administrative enforcement, the criminal case and the threat of being denounced by the
media. Liability regulations mostly come into play in contaminated site cases, where the
discussion centres around who should cover the costs many years after the pollution took
place. The regulations are formulated such that the polluting enterprise is far from
always held liable to pay. The new Act is rather conservative, and will not change the
fact that liability regulations play a modest role in the protection of the environment.