No agency is going to take action on the septic field, or slap the local government's hand for allowing an existing septic field to be repaired.

If you choose to buy the property with this issue still unresolved, you should modify your bid accordingly -- anticipating legal expenses and the possibility that the neighbor will gain long-term use of the portion of your property that contains his septic field. Speak with your real estate lawyer about what a court is likely to do upon hearing the neighbor's case. Talk to your lawyer about the costs and burden you will be assuming if you buy the property and the neighbor sues, or if the neighbor sues and you proceed with the purchase despite the fact that the lawsuit is in progress.

Personally, I would want this issue resolved before I purchased the property -- whether by an enforceable agreement as to when the encroachment from the septic field would be removed (if that's an acceptable outcome), or with its removal prior to closing.