Richard D’Arcy continues his two-part article on company liability. This week he continues his focus on waste disposal and looks at scenarios where a possible civil case might occur.

By Richard D’Arcy

Let us imagine a sticky situation where John Doe calls to the office with a van looking for old batteries and the supervisor hands the company batteries over to just get rid of them. This van travels down the road a few kilometers and John Doe gets a very bad smell in the van. Two of the batteries are leaking, so he stops and dumps them in a field beside the road and continues on his way. A few year later that local tidy towns committee are cleaning up in the area and a child notices the rubbish in the field beside the road. He climbs down to collect the rubbish and the sulphuric acid spills over and burns him badly.

Unfortunately his Dad traces the marked battery back to your company. You claim the company never dumped the batteries there or anywhere for that matter. Ask yourself did you give hazardous waste to an authorized waste collector with a valid waste collection permit to collect batteries? Did you give the batteries to John Doe, John who? Do you have a receipt? Do you have a waste disposal for even one waste battery in all the years you worked in the company? Do you think it is against the law, a criminal offence to surrender waste to a person who has no permits to receive the waste?

Let us say the company’s legal team informs you that a criminal prosecution may be taken against you; however the company and the directors are liable for the civil claim against the company. Now you panic and inform your insurers who kindly tell you they are not responsible for the liability because the battery ended up in the field as a result of a criminal act. They advise you to sue John Doe or have him joined with you in the civil proceedings.

To make matters worse the new owner of the company informs you that when he bought the business from you, his company did not accept any responsibility for past liabilities arising from illegal activities and sends you straight back to the insurance company.

So when you planned an exit for 10 years down the road, did you even consider the liability arising from the waste? Did it ever cross your mind that such a liability may exist? Do you know what happened to the last hazardous waste battery in your company car?

Did the garage who serviced the car take it? What did the garage do with your battery? Did they place it at the back of the shed and give it to John Doe who called around with a van? More importantly have you a receipt from the garage for disposing of the car battery or did they just give you a receipt for the supply of a new battery?

And here is a very important question, who owns the old waste battery? If the garage claims they never bought a hazardous waste battery in their life and why would they, could you dispute this? If there was never an agreement implied or otherwise to take ownership of the battery, can you say there was? What if the garage claims they put the battery down next to your vehicle for you to bring it home? Could you deny your driver left the battery behind? Some customers may take their old batteries home, some like you may forget them and send John Doe around to collect them.

If you end up in a civil court and a judge has a small child who is badly disfigured, sees a business person with some assets and John Doe who cannot be found (or alternatively a small garage which has no assets) who do you think will pay?

Burning oil with your home-grown incinerator

This could never happen you say. What happened to the waste oil from those vans stared at the back of a cold workshop over the winter period? Did the supervisor get a bright idea and set up that old oil burner, filtering out the gunk so the waste oil could be used to heat the place. Did he use it despite complaining about the fumes for the best part of ten years? Did anyone bring some waste oil home to heat the garage at home? Nothing wrong with that you say, except for the fact the burned waste oil is a potential carcinogen (cancer causing agent) and the oil burner is acting as a waste incinerator which is against the law.

Now you may say no, it never happened. Sure we even objected to that big incinerator down the road because we all believed it would cause cancer to us good folk who live in the area. Well can you give me another neat name to describe that big thing burning waste oil at the back of your facility?

So let us say the supervisor gets cancer in 10 years and his other half is very angry at the world and begins to ask where on earth did the cancer come from?

I know you did not tell your employee to burn hazardous waste at the back of the workshop over a ten year period, although you may have known there was a burner heating the shop. Did you sign a purchase order one frosty morning to buy parts for the burner?

Do you have one single receipt for disposing of waste oil from the company in all that 10 years? Would you bet on your chances of getting out of a civil lawsuit without any liability ten years from now?

What did you do ten years ago that you would not do right now? When you last went to that small garage that serviced all your vehicles, did you look at how they heat the place? Do they have an oil burner or an incinerator?

When you set up that service contract for your vehicles, did the contractor dispose of the waste oil in a responsible manner? Who owns the waste oil; do you think it could be you because you never sold it and no one bought it from you? Did you pay the garage to service your vehicles, dispose of the hazardous waste oil and give you a receipt? Did you take reasonable care to check they had a system in place to dispose of the waste oil in a responsible manner?

A number of important questions are raised here and a lot of legal minds may argue the potential outcome in a civil case. However, it is more cost effective to ensure all your waste is accounted for and disposed in a proper manner in accordance with the law in the first place.

Liability in Business in 2012 Part 2

Richard D’Arcy continues his two-part article on company liability. This week he continues his focus on waste disposal and looks at scenarios where a possible civil case might occur.