A BC land owner and rancher received a $921,957.67 bill from the Province for fire control costs, for a fire which started on private land of which he was an owner.
An outline of the provisions of the Wildfire Act (BC), the circumstances of this situation, the critical importance of liability insurance, and some “do’s and don’ts” may be of interest to BC Cattlemen’s members.
Sections 25(1) through 25(3) of the Wildfire Act say:
(1) After the government has carried out, for a fire on Crown land or private land, fire control authorized under section 9, the minister may:
a. determine the amount of the government’s costs of doing so, calculated in the prescribed manner,
b. determine the amount that is equal to the dollar value of any
i. Crown timber,
ii. other forest land resources,
iii. grass land resources, and
iv. other property
of the government damaged or destroyed as a direct or indirect result, of the fire, calculated in the prescribed manner, and
c. determine the costs
i. that have been or will be incurred by the government in re-establishing a free growing stand as a direct or indirect result of the fire, and
ii. that have been incurred by the government for silviculture treatments that were rendered ineffective as a direct or indirect result of the fire.
(2) Subject to subsection (3), the minister, except in prescribed circumstances, by order may require a person to pay to the government the amounts determined under subsection (1)(a) and (b) and the costs determined under subsection 1(c), subject to any prescribed limits, if the person
a. is a holder of a leasehold interest, under a lease in a prescribed category of leases from the government, of the Crown land on which a fire referred to in subsection (1) originated,
b. is an occupier of Crown land that is subject to a lease referred to in paragraph (a) who occupies the Crown land with the permission of the holder of the lease, or
c. is an owner of the private land on which a fire referred to in subsection (1) originated or is a holder of a leasehold interest in that private land, or is an occupier of that private land with the permission of the owner or holder.
(3) The minister must not make an order under subsection (2) unless the minister, after giving the holder, occupier or owner an opportunity to be heard or after one month has elapsed after the date on which the person was given the opportunity to be heard, determines that the holder, occupier or owner caused or contributed to the fire or the spread of the fire.
In summary, the government has the right to order a land owner, tenant or occupier to pay the costs of fighting the fire, plus the value of destroyed Crown resources, plus future and past (wasted) silviculture costs. There can be other fines for destroying park resources.
On April 7, 2012, our land owner burned a slash pile on property of which he was one of the owners. The slash pile was located over an old dead tree. The fire was contained. It was not out when the land owner left – he had stayed overnight and all the following day with the fire, at which point it was reduced to a mound of dirt that continued to smoulder for three weeks or so. After the second day, the land owner monitored it regularly.
On May 12, 2012, a wildfire started on the property. The fire escaped, resulting in fire-fighting costs and damage to Crown resources.
The land owner had liability insurance coverage. On June 11, 2012, he reported the existence of the fire to his insurance agent, so the agent could report a potential claim to the actual insurance company.
On June 14, 2012, Ministry of Forests’ compliance and enforcement personnel went to the property and then filed an incident report about the fire and its escape. The alleged source of the fire was a root of the old tree, thought to have continued to burn underground.
Then - nothing happened for three and a half years.
On November 17, 2015, the land owner received a letter from the Ministry of Forests to say that an "opportunity to be heard" hearing under the Wildfire Act subsection 25(3) had been set and that he would receive a package. The package was delivered in December, 2015, by the RCMP and included a box with three binders of material and the invoice on the top.
After receiving the November letter, the land owner got in touch with his insurance agent, and discovered to his horror that the agent had failed to notify the insurer in 2012 when the agent was notified of the fire by the land owner. Fortunately for the land owner, and possibly through the intervention of the land owner’s own lawyer, the insurer honoured the claim, opened a file, appointed a lawyer to act for the insurer and an independent investigator, and started to work with the land owner and the Province.
The opportunity to be heard was initially set for 6 weeks after December, 2015 but wasn’t completed until April 11, 2016. The decision, called a "determination" came out on July 6, 2017, over a year later. Les Husband, now BC Wildfire Service’s deputy director, issued a determination that the land owner had caused the fire and that he should pay the fire control costs, calculated at $921,957.67. The land owner has said that the costs could have been more. The fire had entered a park which mandates a per hectare fine. The invoice also did not include the Crown timber loss.
The insurer appealed the determination on a number of grounds.
Chief among them were that there was not sufficient evidence to determine that the land owner caused the fire, especially because an independent expert had assessed the situation for the insurer, and provided evidence about causation of the fire which was inconsistent with the Ministry’s compliance and enforcement personnel’s incident report. As well, the land owner had gone above and beyond what a reasonable person would do to prevent the fire from escaping from the burn pile and had cooperated throughout the investigation of the fire.
Further, the three-and-a-half year delay in letting the land owner know that he would be expected to pay costs, and the further 18 month delay in determining the costs, had prejudiced the land owner’s ability to defend himself. The standards of procedural fairness were not met.
The appeal was never heard. The insurer and the Province settled the claim in April 2019, at $500,162.04.
The landowner said that it was all "pretty stressful".
The land owner was fortunate that he had liability insurance and that the insurer did not refuse to honour the policy because (through no fault of the land owner) the insurance agent had not notified the insurer of the potential claim when it was first reported to the insurance agent in 2012.
Even at the final settlement amount, without insurance it would be ruinous for nearly all ranchers in BC.
Liability insurance coverage may have changed since 2012 – many policies now require special fire-fighting coverage which tops out at $100,000. So a thorough discussion with your insurance agent of the policy coverages and limits is warranted.
Insurance. Carry liability coverage. Understand the coverage you have.
Fires. Put them out – our land owner said that in hindsight he would have drenched the area with water and stirred it up, in addition to monitoring the site. Burning at a different time of year is also worth considering.
Consider What You Say to Compliance and Enforcement. In this case the land owner was open with the Ministry personnel about his involvement in the fire. With prior legal advice, he may simply have let the Ministry personnel establish the facts without an admission of involvement.
Making a Claim. Let the insurance agent know of the situation as early as possible and confirm – with written confirmation – that the insurer itself has been notified of the potential of a claim.
Early Investigation – The insurer or the land owner should arrange, as close as possible to the occurrence of the event, its own experts to investigate and look for evidence about how the fire started.
Cooperate with the Insurer. At the same time, be aware that the lawyer appointed by the insurer is acting for the insurer not for the land owner. Occasionally, independent legal advice for the land owner is warranted.