The Companies Act 2006 should be fully implemented by October 2008. This will place new duties on directors to disclose to shareholders any environmental liability which the business may have (see section 417 (5) b ii).
There are fears that this new responsibility could in turn impact on premia paid for Directors' and Officers' Liability Insurance as a failure to disclose or inadequately disclose the extent of such a liability could result in damages being sought.
The Companies Act 2006 does not relate to the Environmental Liability Directive (ELD) which is currently being consulted upon in the UK. The ELD is intended to give effect to the “polluter pays” principle by imposing liability for the prevention and remediation of significant environmental damage. For more information on the ELD click here