Environmental hazards pose significant potential liability for construction contractors yet the risks associated with violating protection legislation often are given little consideration.

Contraventions of Alberta’s Environmental Protection and Enhancement Act can result in fines of up to $1 million. British Columbia’s Environmental Management Act provides for the same fine for contraventions of its Act. While commercial general liability policies may provide coverage for civil liability arising from an environmental incident, almost all exclude the payment of fines or penalties.

In addition, environmental protection legislation may provide for strict liability with respect to the cost of mitigation and restoration once a conviction has occurred.

Not only will contractors be responsible for their infractions but often land owners will be held liable as well. If a land owner exercises even a low degree of care and control over its contractor, it can be held liable for the contractor’s environmental violations. In addition, some environmental protection legislation places a positive onus on land owners to ensure that precautions are taken.

Contractors and owners are facing increasing regulatory control. New regulations spanning broad areas are introduced with little fanfare. Failure to meet regulatory guidelines can lead to significant fines and also serve to tilt the scales in any civil litigation that may arise, which seems to occur more often than not. It is very important to be aware of all of the relevant legislation that may come into play on a particular project.

Sigurd Delblanc is a partner at Bryan and Co. LLP in Edmonton. His focus is on defending contractors, owners and design professionals on construction and regulatory matters.