Minimizing and Managing Environmental Liabilities John - - PowerPoint PPT Presentation

Willms & Shier Environmental Lawyers LLP www.willmsshier.com

Minimizing and Managing Environmental Liabilities

John Georgakopoulos

Partner

Land & Development Conference Developing Challenged Sites: The Need for Innovative Strategies and Patience May 13, 2014

Outline

• Environmental Liabilities
• regulatory
• civil
• Minimizing and Managing Environmental

Liabilities

• allocate risk when purchasing contaminated

properties

• records of site condition
• environmental insurance

ENVIRONMENTAL LIABILITIES

Environmental Condition of Property

• Understand the environmental condition
• f the property
• what contaminants are present?
• do the contaminants exceed Ministry of

Environment (MOE) standards?

• is the contamination delineated?
• is the contamination migrating off-site?

Regulatory Liability

• MOE can issue orders
• to current/former owner/occupier or person

who had or has charge, management, and control of a property

• requiring a person to investigate, remediate,

prevent further migration, conduct on-going monitoring, remove waste from site, clean up spills, reimburse the MOE for their work

Regulatory Liability Cont’d

• MOE can prosecute for offences under

environmental statutes

• offences include failing to comply with an order
• r contravening an Act or regulation
• convictions can lead to fines and/or

imprisonment

Director and Officer Liability

• Statutory duties for D&Os under

environmental statutes

• Can be issued orders and/or

prosecuted

• No fault liability
• “Corporate veil” does not protect

Civil Liability

• Risk of lawsuits
• Contamination is migrating off-site, “flow through” property,

land transactions

• Causes of action
• common law torts – nuisance, trespass, strict liability (Rylands
• v. Fletcher), negligence
• breach of contract – agreements of purchase and sale
• Damages
• costs to investigate, remediate, and prevent further migration,

“stigma” or diminution in property value, health risks, business losses, loss of use and enjoyment, contribution and indemnity

MINIMIZING AND MANAGING ENVIRONMENTAL LIABILITIES

Allocate Risk when Purchasing Contaminated Property

• Obtain full and timely disclosure
• Right of access and inspection
• Ensure access to property, records,

employees

• Seek full warranties for environmental

condition

• Indemnities, security, releases
• Specify proposed future use of property

• O. Reg. 153/04
• Record of site condition (RSC)
• required by Chief Building Official to change to

more sensitive land use

• might be required by municipalities, lenders,

purchasers

What is an RSC?

• Certified by “qualified person” that property is

suitable for proposed use

• “Qualified person” defined by O Reg 153/04
• Filed on the Environmental Site Registry
• Director has 30 days to
• acknowledge RSC will be filed
• give notice that RSC does not comply and cannot be filed
• give notice that Director will conduct a review to

determine if RSC can be filed

RSC Liability Protection

• Provides protection from specified

regulatory orders

• No protection from civil liability
• No protection where contaminants

migrate off-site

• MOE retains emergency order powers

Environmental Insurance

• Commercial General Liability typically

has pollution exclusion

• D&O Liability policies typically exclude

environmental matters

• Insurers offer Environmental

Impairment Liability policies

How to Minimize and Manage Environmental Liabilities?

• Understand environmental condition of

the property

• Determine and understand

environmental risks and liabilities

• Obtain protections and allocate risks,

where possible

• Ensure potential environmental risks

and liabilities are within your risk tolerance

Willms & Shier Environmental Lawyers LLP www.willmsshier.com

Contact Information

John Georgakopoulos

(416) 862-4826 jgeorgakopoulos@willmsshier.com