If you run a business in the San Diego or Los Angeles area that utilizes hazardous materials, such as a dry cleaning business, you will likely take steps to ensure you are in compliance with the law. Nevertheless, mistakes happen and you may find yourself facing penalties from regulatory agencies or lawsuits from injured parties. The following is a brief overview of some costs you may face in such circumstances.
Fines and other penalties from regulatory agencies
If a business does not comply with applicable environmental laws and regulations, such as regulations regarding pollution or degradation, the business may be fined or otherwise penalized. This is significant as it adds an additional financial burden on top of the cost of compliance. In general, the amount of the fine will equal the costs the business saved from not following the applicable law or regulation.
Compensation to individuals or their property
If a business’s actions caused another person to suffer damages, either to their body or their property, the business may be ordered to pay the aggrieved party compensation for personal injury, property damage or economic loss. For example, if a business released dangerous substances into the air, water or ground, this could harm others, leading to a legal claim and subsequent compensation if the business loses or settles the lawsuit. Compensation may have to be paid even after the business complies with all applicable environmental laws and regulations.
If a business commits a significantly egregious act of noncompliance with environmental laws or regulations that harm others, they may be ordered to pay punitive damages. These damages go above and beyond compensation damages. The purpose of punitive damages is to deter both the business at issue and other business from committing these type of errors in the future. It is rare for a court to order punitive damages be paid, but if they are assessed they can be very costly.
Learn more about noncompliance with environmental laws and regulations
Many businesses do their best to comply with all applicable laws and regulations, but sometimes mistakes are made, and the business may face fines, penalties, compensatory damages or punitive damages. This post is for educational purposes only and does not contain legal advice. Our firm’s website on environmental law may be a good resource for those who want further information on their rights and options.