DENMARK Law and Practice Contributed by: Flemming Elbæk, Helle Ina Elmer, Mads Lund and August Reinhold, HaugaardBraad
9.2 Lender Protection In practice, lenders manage liability risk through cov- enants, reporting obligations and insurance require- ments imposed on the borrower. Moreover, liability rests with the operator, which is rarely the financial institution or lender.
authorities often bring a concurrent criminal case against the company’s CEO (and, where relevant, other responsible officers). Personal criminal liability requires that the individual acted intentionally or with gross negligence, typically shown through unlawful instructions or material failures in oversight. Sanctions primarily comprise fines (with possible imprisonment in serious cases), alongside administrative orders to cease, remediate or prevent harm. D&O insurance can generally cover defence costs and certain civil liabilities (but not intentional or grossly negligent acts). However, criminal fines and penalties are not insurable in Denmark. In Denmark, environmental insurance is available on the commercial market, covering third-party bodily injury and property damage, statutory cleanup/reme- diation costs and defence expenses. There is no general compulsory environmental insur- ance regime, but an important carve-out applies to small oil tanks: owners of tanks under 6,000 litres used primarily to heat dwellings must be covered by an oil-pollution policy, which is typically embedded in the price of delivered heating oil. 8. Insurance 8.1 Environmental Insurance As to insurability, criminal fines and other punitive administrative penalties are uninsurable, and inten- tional misconduct cannot be insured. Coverage for gross negligence is generally excluded or tightly lim- ited under policy terms.
10. Civil Liability 10.1 Civil Claims
In Denmark, civil claims may be brought where pol- lution or other environmental harm causes personal injury, property damage or pure economic loss. Civil liability follows fault-based principles requiring culpa- bility, causation, loss and foreseeability. In addition, Danish law provides statutory strict (objective) liability for certain environmentally hazardous activities, and multiple polluters may face joint and several liability or apportionment depending on the circumstances. Claims also arise under neighbour-law principles for unreasonable nuisance (eg, odour, noise, dust, vibra- tion). A breach of permit conditions or statutory duties will typically support wrongfulness and may ease the claimant’s burden of proof. Contractual routes are common in transactions: buy- ers, tenants or lenders may claim under warranties, indemnities, environmental covenants or collateral deeds for cleanup costs and losses. 10.2 Exemplary or Punitive Damages Danish law does not operate with exemplary or puni- tive damages. 10.3 Class or Group Actions Group actions are possible where multiple plaintiffs have suffered similar harm from a common source (eg, pollution or contamination), provided the statutory criteria for group litigation are met. 10.4 Landmark Cases There are a number of landmark Danish cases con- cerning civil environmental liability. More recent exam- ples include the following.
9. Lender Liability 9.1 Financial Institutions/Lenders
In Denmark, financial institutions/lenders are not gen- erally liable for a borrower’s environmental damage, because liability is grounded in the polluter-pays prin- ciple and attaches to the operator of the activity.
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