The PEGG

September, 2000

Other Jurisdictions Eyeing
Alberta's New Limitations Act

Eighteen months after Alberta implemented limitations legislation which restricts to 10 years the period for discovering and making a claim against professional services, there are signs that some other provinces are edging in the same direction.

Nevertheless, there's hardly a stampede to follow Alberta's lead, suggests Derek Holloway, senior vice-president of the construction department with the ENCON Group Inc., a major Ottawa-based provider of professional liability insurance.

"Alberta legislation is being used as an argument to push various attorneys-general departments to limit the right to claims," Mr. Holloway told The PEGG.

Many professionals, such as engineers and architects, favour defined limits for pursuing a claim -- rather than having no time limit, the situation existing here prior to the March 1, 1999 implementation of the Alberta Limitations Act. The latter is believed to be bell-wether legislation in setting a 10-year limit. However, Mr. Holloway concedes there is some "political sensitivity" within governments to be seen as limiting the public's recourse against defective work by professionals.

Alberta's legislation only materialized due to persistence by groups such as APEGGA and through Calgary Egmont MLA Denis Herard's championing of the cause. Mr. Herard initiated the legislation as a private member's bill.

According to Mr. Holloway, British Columbia is considering legislation similar to that already on the books in Alberta. Ontario has been examining a system for certification of commercial buildings which might operate much as new home warranties now do with residential housing. Under those proposals, construction or design shortcomings would have to be brought to light within a given period to be covered by the warranty.

While other provinces may be imitating Alberta, it's not clear that the new limitations act has seriously affected behaviour in this province. This does not surprise Mr. Holloway. The ENCON official notes that 95 per cent of design-related claims are initiated within five years of completion of projects. He adds "most claims outside the 10 years involve situations in which operation or maintenance, rather than design, is an issue."

As a result, he suggests, most retired professionals don't retain liability insurance beyond six or seven years following retirement. "They will take their chances after that, " says Mr. Halloway.

There is little evidence of cases arising from the 1999 Alberta Limitations Act. Even so, suggests Mr. Halloway, the legislation still meets an important need, since "it gives finality in terms of retiring or shutting down a practice and not worrying about it 10 or 20 years down the line."