Businesses affected by LRT construction turning to legal arena
Ryan Flanagan, CTV Kitchener
Published Monday, November 28, 2016 5:40PM EST
Last Updated Monday, November 28, 2016 6:22PM EST
For some businesses along the Ion light rail transit line, 2016 has been a tough year.
Construction has left a number of streets closed to vehicles for several months.
In some cases, even accessing certain businesses on foot has been difficult.
And even now, as most roads either have reopened or are about to reopen, some businesses find themselves tallying up their losses and wondering if they have any way of recovering some of that money.
“There are a lot of concerned businesses out there,” says Ian Mathany, a lawyer with Toronto-based Borden Ladner Gervais LLP.
“Some of the smaller businesses are wondering if it’s something that they can survive.”
Mathany estimates that he’s been contacted by “close to 50” Waterloo Region businesses that have been affected by Ion construction.
Not all of them have decided to retain his services yet – but he says that’s not unusual, as legal action typically doesn’t get serious until work has wrapped up and the full extent of any damage is apparent.
“There are a lot of people who have inquired, but they’re a little bit unsure as to whether they’re planning to advance a claim or not,” Mathany says.
Michael Paiva, a partner at Kitchener’s Rodrigues Law, estimates that he’s spoken to 35 local business owners affected by Ion construction, “several” of whom have started moving through the process.
He says the flow of potential claims has kept him “relatively busy,” even though he was expecting more businesses to seek legal redress.
“I think a lot of people aren’t making claims that could be making claims,” he says.
Paiva says that he suspects some businesses aren’t entering the legal arena because they think they might end up on the hook for legal costs should they be unsuccessful, which usually isn’t true, or because they’ve been told that there’s “no point” to pursuing legal avenues – which, he says, also isn’t true.
“There’s no harm in getting an initial consultation, just to review how the project has impacted your business and what you think your losses are,” he says.
If a business decides to pursue legal action against their local government, one of their first steps is to meet with somebody like Tim Zimmerman.
Zimmerman is a chartered business valuator with Collins Barrow. He’s often used as an independent expert by businesses looking to differentiate between money lost due to construction and money that was lost during a period of construction, but due to other factors.
He says he’s been involved with “over a dozen” claims relating to the Ion project – though, like Mathany, he says most are very early in the process.
“We’ve been engaged by a fair number of businesses in the area to help them calculate their losses,” he says.
Any notices of claim that have been filed with the region – which are a step on the road to filing a claim for damages, but not outright claims themselves – have been filed under the Expropriations Act.
While experts describe the process as being similar to that of the court system, it’s not exactly the same. Instead, cases filed under the Expropriations Act end up being heard at the Ontario Municipal Board.
“Even though there’s a public project going on that is for the benefit of everybody, it shouldn’t come at the detriment of one particular business,” Mathany says.
“That’s what the Expropriations Act tries to do – to make sure that the cost of a public project is borne equally by the public.”
Mathany expects that the “vast majority” of cases in Waterloo Region will be resolved either through negotiation or with the help of a mediator, without ever making it to the OMB.
While OMB hearings are a public process, settlements reached via negotiation or mediation are typically not disclosed to the public – meaning taxpayers may never know exactly how much the region ends up shelling out.
With reporting by Abigail Bimman