Fund Liability

Background

The Canadian regime addresses all ships. Basically, the Fund is available to pay claims for oil pollution damage, or anticipated damage, on any Canadian inland and coastal waters including the Exclusive Economic Zone of Canada. In addition, tankers carrying persistent oil are also covered by the international Funds.

The Canadian regime does not apply, however, to drilling activities insofar as an escape or discharge of oil emanates from those activities.

Nor does it apply to a floating storage unit, or floating production storage units, unless the unit is carrying oil as a cargo on a voyage to or from a port or terminal outside an offshore oil field.

Fund of Last Resort
The Ship-source Oil Pollution Fund is available for compensation if all reasonable steps have been taken to recover compensation from the shipowner and those steps have been unsuccessful, if the shipowner is able to raise any one of the statutory defences, if the claim for compensation exceeds the shipowner’s limit of liability, if the shipowner is financially incapable of meeting his obligations or if the cause of the oil pollution damage is unknown, a situation commonly referred to as “mystery spill”. (Section 101 of the Marine Liability Act.)

Fund of First Resort
A person who has suffered loss or damage from oil pollution from a spill from a ship (or imminent risk thereof) may also file a claim directly with the Fund (section 103 of the Marine Liability Act. However, this option does not exist for a response organization or for a person in a state other than Canada: the SOPF is available to them as a fund of last resort only.

Maximum Liability per Incident
The maximum liability of the SOPF per incident during the fiscal year commencing April 1st, 2017 will be $171,692,521. The maximum liability of the SOPF is indexed annually to the Canadian Consumer Price Index.