It's called a liability lawsuit or arbitration. And it is the traditional way of handling such affairs. It's infringements of the free market (often, through regulation) that have largely changed that. Laws breed more laws. Your parents had every right to either demand that your neighbors either keep dangerous chemicals on their own property, compensate them accordingly for the risk, or provide PPE. Maybe your parents didn't know any better, or didn't particularly care. That's their right too.
Yeah, you should review the history of this type of litigation in America - for pop readers, "A Civil Action" isn't that far off from what most people would encounter trying to sue over an industrial operation poisoning the environment.
The tort system works very well for things that someone who grew up in the 1700's could make sense of. It is not particularly well suited to statistical analyses that indicate damages from pollution.
Edit: It's also important to note that the tort system
does not give you an absolute right to stop other people from polluting your property, and never has. So in terms of health protection, that's definitely not the answer - the best it can reliably do is get you payment for the damage, and (as explained above) it doesn't do that very well in these cases.