Start with the End in Mind: Recovering your Clean-up Costs

In BC, any ‘person’ can undertake the investigation and remediation of a contaminated site. Often that person is not the ‘person responsible’ for the contamination, but has an interest in the property. Remediation can be an expensive and lengthy process, but in the case of developing a site, for example, it is unavoidable. In short, if it’s not clean, you can’t build. And, you certainly can’t move people into a building that may be unsafe. This can leave an innocent current owner with no choice but to spend the money to remediate its property. But what then?

The Environmental Management Act specifically accounts for this scenario by providing a statutory cause of action for any person to use to recover their costs against any responsible person, but to recover your costs they must have been ‘reasonably incurred’. This reasonableness requirement should be kept in mind when beginning an investigation and remediation, so at the end of the day you can bring a solid case against any ‘responsible persons’. Reasonableness, however, is not necessarily for you to decide.

When arguing, long in the future, that you incurred your remediation costs reasonably, you should be prepared to defend your decisions based on a documented set of recommendations by your professional advisors. This could involve legal/regulatory advice, but will certainly involve advice from an expert environmental consultant. Whether you succeed in showing your costs were reasonably incurred will depend on your environmental expert’s credentials and experience, the nature of their remedial recommendations, and whether you followed them. You will want to be able to show that you considered these expert recommendations and followed them unless deviation was necessary. There is room for business choices to be made, but rejecting the advice of your environmental expert should only be done thoughtfully and with the knowledge that you may have to someday defend that decision. For example, if you are choosing the more expensive of two remedial options, be sure you understand the options and that you can defend the decision you make. And keep a record of the advice, your deliberations, and rationale.

A court will respect the advice you received from experts, and will even defer to them when more ‘expensive’ recommendations are made and accepted, if rational. So hire a good expert, listen to them, and ensure there is a solid record of expert recommendations that support your decision-making process. Arguing about the reasonableness of remediation costs is a classic defence to any cost recovery claim, so keep this end in mind from the beginning.

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