January 25, 2022
Wildfire Update: 2021, A Year in Review – January 25, 2022
WILDFIRE UPDATE: 2021, A YEAR IN REVIEW
2021 was yet another astonishing year for wildfires. In this article,
we provide an update regarding government regulatory proceedings
that can arise from wildfires in B.C. and the implications that may
arise for insurers and their insured’s.
By Dan Richardson, Dolden Wallace Folick Vancouver
Wildfires in British Columbia made international news in 2021. Tragically, in June 2021, the entire town of Lytton was destroyed by fire. In total, there were more than 1600 fires across the province, and nearly 8,700 km² of land was burned (to put this into perspective: the city of Vancouver is 115 km²), making 2021 the third worst year on record in terms of area burned.
In October 2021, CBC reported that the Province spent a total of $565 million on fighting wildfires. In 2019, we issued an article, Wildfire Claims in British Columbia, in which we discussed the legislation that enables the Province to seek recovery of some of these costs, namely: the Wildfire Act and its regulations.
In brief, the Wildfire Act permits the Province to recover its fire-fighting costs from individuals or commercial enterprises (such as logging and forestry companies) whose contraventions or breaches of the Act cause or contribute to a wildfire. Given the scale of some wildfires, and the cost involved in fighting fires in remote areas, these claims can be substantial.
In addition, the Province can impose fines against persons who contravene the Act. This is notable as some insurance policies provide coverage for fire fighting costs – but not fines. Ultimately, the Province’s claims (for recovery and fines) are determined by a decision maker designated by the Province (the “DDM”) following an “opportunity to be heard” hearing (“OTBH”).
Recently, our firm successfully defended two insureds in two separate claims for recovery of fire fighting costs, both of which arose from “holdover” fires in 2018. The cases usefully demonstrate different grounds for defending claims under the Wildfire Act.
In the first case, the Province alleged that Gudeit Bros. Contracting (“Gudeit”), a logging contractor, contravened the Wildfire Act by failing to properly extinguish a debris pile that Gudeit burned in October 2017. The Province alleged that the fire smoldered underground over the winter, before reigniting above ground in July 2018.
The DDM determined that the wildfire was caused by one of the debris piles ignited by Gudeit, and Gudeit therefore contravened the Act by failing to extinguish the fire.
However, the key issue in this case was whether Gudeit was able to rely on the “due diligence” defence, found in s.29 of the Act. In this case, Gudeit provided evidence that one of its employees returned to the burn piles six times following the burning, to inspect the piles and check them for heat. The employee used her hands and a shovel to check the piles, and made written notes recording the results of her inspections.
The DDM agreed with our submission regarding the nature of a due diligence defence:
I am mindful of Mr. Richardson’s submission that a defence of due diligence is about what a reasonable person would have done in the circumstances. For the defence to be established, a person must exhibit a high standard of awareness and decisive, prompt, and continuing action – but it does not require a standard of perfection.
The DDM determined that in the circumstances, Gudeit took all reasonable care to avoid committing a contravention of the Act and Regulations, by taking reasonable actions to ensure the burn piles were extinguished and the fires did not escape. As a result, Gudeit established the due diligence defence and no orders were made for fire fighting costs or fines.
In the second case, we acted for CanWel Timber Ltd. (“CanWel”), a forestry company. CanWel owned some private managed forest land near Canal Flats, B.C. As part of its operations, CanWel retained Tanglefoot Forestry Consultants Ltd. (“Tanglefoot”) to burn a number of slash piles in the fall and winter of 2017.
The Province alleged that one of the slash piles burned by Tanglefoot “held over” and reignited in July 2018, causing a wildfire. The Province sought fire control costs from CanWel in excess of $330,000.
In this case, the key issue was the cause of the wildfire. The Province’s fire investigator identified a specific slash pile as the origin point of the wildfire. The main issue in dispute was whether that slash pile was one of the slash piles burned by Tanglefoot.
CanWel submitted evidence showing that it had given Tanglefoot printed and electronic maps, which clearly identified the number and specific location of each slash pile that Tanglefoot was to burn. Tanglefoot’s evidence was that it only burnt the slash piles identified on the maps, and that no additional slash piles were ignited. Crucially, the slash pile identified by the Province as the cause of the wildfire was not one of the slash piles identified on the maps provided by CanWel to Tanglefoot. The closest slash pile ignited by Tanglefoot was approximately 500 metres north of the alleged point of origin of the wildfire.
In his determination, the DDM stated that he was not persuaded that Tanglefoot ignited the slash pile that the Province determined to be the cause of the wildfire. As a result, he determined, on a balance of probabilities, that CanWel did not contravene the Act or Regulation.
These two cases are notable as they both concern “holdover” fires. The cases demonstrate that a logging contractor may complete its seasonal operations without incident, only to be accused of causing a wildfire that ignited many months later.
These cases also demonstrate two different routes towards a successful outcome. In CanWel, we were able to defend the claim on the issue of causation of the fire. In Gudeit, the insured was found to be in contravention of the Act, but was able to rely on the due diligence defence.
In both cases, the evidence of the insureds’ employees was the key to achieving a successful outcome. In Gudeit, the employee’s notebook of inspections was highly persuasive evidence. In CanWel, the printed maps were equally important to the result. This underscores the importance of securing statements and documents at an early stage, to provide the best chance of a successful outcome.
Dan Richardson is a partner at our Vancouver office. He has acted for numerous insureds in a variety of cases relating to wildfire legislation. Please call or email Dan if you would like to discuss any claims or issues related to wildfire legislation. Please also stay tuned for our upcoming wildfire seminar in 2022 – if you are interested in attending please email Dan directly at [email protected].
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