An Introduction to Cost Recovery Claims in British Columbia

If you own, develop, or work on land in British Columbia, it’s important to understand who is legally responsible for cleanup of contamination under the Environmental Management Act, S.B.C. 2003, c. 53 (EMA) and the Contaminated Sites Regulation B.C. Reg. 375/96 (CSR). These rules define who must pay to investigate and remediate contamination, how responsibility is allocated, and what exceptions might apply.

1. The Core Principle: Polluter Pays

At the heart of BC’s contaminated sites regime is the “polluter-pays” principle. This means that, as a general rule, those who caused contamination should shoulder the cost of the remediation. If contamination is found on a property, the legislation looks to identify a “responsible person”, which in simple terms means someone with a legal duty to pay for the remediation. Such “responsible persons” (if there are more than one) are absolutely, retroactively, jointly and separately liable for all reasonably incurred remediation costs. 

This broad approach encourages property owners and operators to act responsibly. It also reflects an important public policy goal: those who benefit from land use bear certain risks that come with it.

2. Who Is a “Responsible Person”?

Under the EMA and CSR, the net of liability is cast wide. Subject to specific exemptions set out in the EMA and the CSR, “responsible persons” include the following:

• current and former landowners whose property is contaminated;
• current and former operators if their activities caused contamination and
• transporters or producers of hazardous substances that ended up on the land. 

These categories also include current and former directors, officers, employees or agents of corporate responsible persons. 

In circumstances where contaminants migrate from one site to another, subject to specific exemptions, all persons responsible for contamination of a source site are also persons responsible for remediation of any additional sites impacted by contaminant migration from that source site.

While this list is necessarily simplified, it is critical to understand that the law can hold various parties accountable based on their present or historical connection to the contamination, not just who physically owns or operates on the land at a given moment.

3. Not Everyone Is on the Hook

The rules also include important exemptions and protections to “responsible person” status. For example, in certain circumstances:

• Innocent landowners may be protected if they did not cause the contamination, did not know about it or reasonably ought to have known about it, and did not contribute to it. Landlords whose tenants caused contamination can sometimes fall into this category, though there are conditions around what they knew or ought to have known. 
• Insurers and brokers will generally not be considered responsible persons simply for evaluating risk or underwriting policies, so long as they didn’t cause or contribute to the contamination. 

4. Cost Allocation in Practice

Liability under the EMA is “absolute”, “retroactive”, and “joint” and “separate”, which results in critical considerations when allocating the costs of remediation amongst responsible persons:

• “Absolute”: “absolute” liability means that no fault, negligence, or any “wrongdoing” in the traditional sense is necessary to establish a claim against a “responsible person”.
• “Retroactive”: “retroactive” liability means that one can be liable for contamination that occurred prior to the advent of the EMA and the CSR (and any predecessor legislation) coming into force.  This is key – responsible persons can be liable for the costs of remediation incurred by any person in relation to a contaminated site even if, at the time, the person had a permit or was otherwise allowed to introduce contaminants now requiring remediation into the environment.
• “Joint” and “Separate”: “joint” and “separate” liability means that each “responsible person” may be looked to for the full cost of clean-up, regardless of the extent of that person’s involvement with the property or its contamination.  The court will, however, apportion reasonably incurred costs of remediation among responsible persons in a cost recovery claim as the court considers fair.  However, since liability is joint, if certain responsible persons are without sufficient funds, the “deep pockets” may ultimately end up paying more than their allocated share.

5. Why It Matters for Property Owners and Developers

Understanding liability under the EMA and CSR is essential if you are buying, selling, or developing land. A contaminated site can attract significant liability and unforeseen costs. 

Anyone dealing with possible contamination issues should seek professional advice concerning their degree of risk, along with strategies that can be designed and implemented to uncover potential contamination risks early and minimize exposure. 

If you have any questions about this topic or other environmental law matters, please contact Caryna Miller, or any member of our Environmental Law team. For further insight, read our other blog posts here.