Environmental Alert: Remediation legal costs are recoverable under the Environmental Management Act

Remediation legal costs are recoverable under the Environmental Management Act

By Robert J. Lesperance and Kimberly A. Webber


Robert J. Lesperance, Partner                                             Kimberly A. Webber, Associate
Phone:  604-685-8737                                                             Phone:  604-674-3560
Email:   rjl@lmlaw.ca                                                               Email: kaw@lmlaw.ca


The B.C. Court of Appeal recently released a significant decision for those seeking to recover legal costs incurred in remediating contamination on their property.

In Victory Motors (Abbotsford) Ltd. v. Actton Super-Save Gas Stations Ltd., the appellants were the current owners of two properties in Abbotsford that had undergone remediation. The respondents were the historical owners and operators of a gasoline service station where the contamination had originated from.

At trial, the appellants had commenced a cost-recovery action under Part 4 of the Environmental Management Act, (the “EMA”) to recover the costs of remediating contaminated lands. Under the EMA, “responsible persons” are liable for reasonably incurred costs of remediation. The trial judge had concluded that the respondents were “responsible persons” and apportioned the costs of remediation amongst them.

When assessing the remediation costs claimed, the trial judge concluded that the remediation legal costs claimed were not recoverable as costs of remediation pursuant to the EMA. The legal costs the appellants sought to recover were not litigation expenses (which are typically recoverable for successful parties under the rules of court), but were legal costs incurred prior to the litigation being commenced, when the appellants were seeking advice and arranging to have the properties remediated.

The issue on appeal was whether the appellants were entitled to recover approximately the $150,000 in remediation legal expenses from the defendants under the provisions of the EMA.

The Court of Appeal concluded that remediation legal costs are in fact recoverable under section 47 of the EMA. In reaching this decision, the court drew an important distinction between “remediation legal costs”, namely legal costs incurred in effecting the actual remediation of a property, and “litigation legal costs”, which are legal costs incurred in the litigation seeking to recover the costs of remediation and which are normally recoverable under the rules of court.

The Court of Appeal clarified that these remediation legal costs are recoverable under the EMA if they are reasonably incurred and have a proper evidentiary basis, which are matters to be assessed by a trial judge. The Court of Appeal provided examples on what these “remediation legal costs” might include:

“..advising the remediating client, negotiating with governmental authorities, and navigating the client through the creation of an acceptable remediation plan, its execution, and obtaining final regulatory approval.”

“Remediation legal costs” are also recoverable by responsible persons liable for remediation expenses seeking contribution from another responsible persons under section 47(3)(c) of the EMA. These legal costs could include the expense involved in drafting and preparing agreements for joint remediation and cost sharing, for example.

Lessons for future cost-recovery actions

This is a significant decision for anyone seeking to recover remediation expenses from “responsible persons” under the EMA. The EMA is a comprehensive regulatory regime that can be challenging to navigate. Legal fees are often necessarily incurred in the remediation process even prior to the start of litigation. By allowing parties to seek recovery of their non-litigation legal costs, the Court of Appeal has reinforced the “polluter pays” principle and taken another step forward in ensuring that those responsible for contamination bear the costs associated with its clean-up.

Of course, as with any remediation cost under the EMA, these costs must be reasonably incurred and demonstrated through evidence. Ultimately, in this decision, the appellants were not awarded their remediation legal costs due to a failure to lead evidence particularizing their legal expenses. It would be prudent for lawyers assisting clients in this area to heed the Court’s advice in this decision and maintain detailed and distinct time-keeping records for both legal remediation costs and litigation fees, to ensure that clients have the evidence they need to claim legal remediation costs without the risk of waiving solicitor client privilege.


WHAT WE DO:  Lesperance Mendes has been advises property owners and others on environmental law since 1997.  If you are dealing with a contaminated site or other environmental law issue, please contact Robert Lesperance at rjl@lmlaw.ca or 604-685-8737.

THIS ARTICLE IS NOT LEGAL ADVICE:  This article provides general information and should not be relied on upon without independent legal advice.