Claims Assessment

General Principles

Any person in Canada, including corporations and the Crown, who has sustained loss or damage, or incurred costs and expenses, in respect of oil pollution damage may file a claim directly with the Administrator of the SOPF. The measures taken and the costs and expenses incurred must be reasonable under the prevailing circumstances. This entitlement does not apply to a Canadian Response Organization, as defined in the Canada Shipping Act, or a person in a State other than Canada. A Response Organization may, nevertheless, assert a claim for unsatisfied costs and expenses after exhausting its right of recovery against the shipowner.

The statutory claims regime of the Marine Liability Act is based on the application of the principle that the polluter pays. It has as its four cornerstones the following elements:

  • All clean-up measures taken must be reasonable measures;
  • All costs and expenses must have actually been incurred;
  • All costs and expenses must be reasonable; and
  • All claims filed with the SOPF must be investigated by the Administrator.

Scope of Compensation

Compensation is payable for the costs of reasonable operational measures taken during oil spill recovery at sea. Also, for the costs to clean shorelines and dispose of collected oil and oily wastes. In addition, payment is made for the costs of mobilizing the clean-up equipment and other essential response resources for the purpose of preventive measures even if no pollution occurred. An assessment will be made as to whether or not there was a probability that the incident may have created a future threat of oil pollution. The assessment is necessary before a determination can be made that the full claim or part thereof has been established.

Claimants Entitled to Interest

Interest accrues on a claim filed with the SOPF from the day when the damage occurred or when the loss was incurred. In the case of costs and expenses, from the day on which they are incurred. The interest is calculated at the rate prescribed under the Income Tax Act for late payment and over-payment of income tax.

Claims arising from Mystery Spills

An oil spill is classified as a ‘mystery spill’ when the identity of the ship which caused the pollution is unknown or cannot be established. In such cases, a claimant is not required to satisfy the Administrator that the occurrence was caused by a ship. However, the Administrator shall dismiss a claim if he or she is satisfied on the evidence that the occurrence was not caused by a ship.

Salvage Operations

In some oil spill incidents caused by abandoned and derelict vessels, it is necessary to conduct salvage operations, particularly if the vessel has sunk. When salvage operations are performed the primary purpose must relate directly to preventive measures, or to minimize further pollution damage. Should the operations have another purpose, such as hull and cargo salvage or wreck removal, the costs and expenses incurred are not admissible under the SOPF.