Concern in the real estate, construction and insurance industry about hazardous materials such as asbestos has given way to a relatively new risk - mould. Since the late '90s, mould-related litigation and insurance claims have exploded in North America.
 
Bruce Stewart, vice-president of Pinchin Environmental Ltd., sees the growth in his business as proof of increasing mould awareness in Canada.
 
"That side of our business has grown tremendously in the last five years," says Stewart, whose company, in addition to its core services, provides training to contractors, consultants, realtors and insurers.
 
"In our Mississauga office, we have 12 consultants who do nothing but mould and we have a lab of five people dedicated to just that area. In each of our outside offices we have at least one or two people who spend most of their time doing mould and indoor quality work."
 

Brennan O'Connor, Business Edge
Elvira DeGasperis of Pinchin Environmental inspects mould in a basement bathroom in Hamilton, where the homeowner discovered the problem a month after buying the house.
 
Stewart says anxiety over mould as a potentially serious health and liability risk began in the United States, where "mold" is truly a four-letter word. There, high-profile cases have spawned enormous damage awards and thousands of insurance claims.
 
A Texas jury awarded $32 million US to Melinda Ballard in 2001 after her insurance company failed to identify promptly and remediate mould in her 22-room mansion. The Tonight Show's Ed McMahon and Erin Brockovich, an environmental crusader and subject of a Hollywood movie, have each filed similar multimillion- dollar suits.
 
According to U.S. insurance industry statistics, the number of mould claims rose by more than 1,300 per cent between the beginning of 2000 and the end of 2001 and total loses from mould claims increased to $1 billion from $14 million during the same period.
 
In Canada, however, not only is mould spelled differently, it has also lacked the same sting in real estate and related industries.
 
By contrast with the United States, Canada had only 20 mould-related cases go to court up to 2002 and approximately 30 cases between 2002 and 2005.
 
David Way, coordinator of the standards and practices committee for the Insurance Bureau of Canada (IBC), says credit for averting a similar experience to that of the United States lies in the speed with which Canadian industries proactively confronted the issue.
 
"We couldn't turn a blind eye to what was happening in the States," Way says. "It could have been blown out of proportion. For the insurance companies, the large damages awarded in the States served as a wakeup call."
Way says the insurance industry took a two-prong attack to the problem. In 2002, IBC recommended that its members clarify policy wording concerning mould-related damages and most insurers have since introduced mould exclusions to their policies.
 
"In addition, most insurance companies now are treating water-damage losses with a lot more respect," Way says. "They are treating a lot faster than they used to, thereby eliminating, as much as possible, the likelihood of mould claims occurring."
 
Like asbestos, litigation rests on the sometimes-controversial link between mould spores and respiratory and other health problems.
 
 

Photo courtesy of Pinchin Environmental Ltd.
Mould, such as on these walls, poses serious problems.
 
Nicolas Gilbert, a biologist with Health Canada, says mould can cause allergic reactions in otherwise healthy individuals and potentially life-threatening symptoms in people with compromised immune systems.
 
But, he says, while so-called "toxic" moulds - those that produce mycotoxins as a byproduct of their metabolism - draw the most media attention, professionals in the field do not pay much attention to the distinction.
 
"Both kinds of species can be harmful to health," he says. "The large proportion of health effects from mould are caused by spores and not the toxins that some moulds produce.
 
"There is clear scientific evidence of allergic reactions but, as to more serious systems, there is no scientific evidence," Gilbert says.
 
Unlike asbestos, Gilbert says mould spores exist everywhere and can grow into "colonies" within 48 hours on most surfaces given sufficient moisture levels. In addition, prevention of mould growth is difficult, if not impossible, and there are no established exposure limits.
 
"There are three reasons for that," Gilbert says. "First of all, there are thousands of mould species that have different potential to cause health effects. In addition, it's difficult to measure mould concentration in a building because it will vary considerably over time. Lastly, not everyone reacts to same extent based on a given amount of mould."
 
Jeff Morrison, director of environment for the Ottawa-based Canadian Construction Association (CCA), has seen the same reaction from his association's members as that of the Insurance Bureau of Canada.
 
"We saw what was happening in the U.S. and the industry in Canada brought itself up to speed fairly quickly," he says. "There is nothing like the fear of a lawsuit to motivate change."
 
In the absence of an official building code provision related to mould prevention, Morrison says the CCA took a leading role in 2003 by developing national guidelines that spell out best practices for minimizing mould in new construction and remediation of mould during renovations.
 
In addition to its guidelines, the CCA also provides standard contract forms for its members that, as of this fall, will include legal language spelling out the rights and responsibilities of both parties regarding mould.
 
These measures won't indemnify contractors against litigation, Morrison says, but they can minimize its potential impact.
 
"We always say to builders, if you can show a judge or mediator that you did everything you could, if you show proper due diligence, then you know that you're going to be fine," he says.
 
"It's when you don't and you can be proved to be negligent in something - that you should have been more careful - that's when you might run into trouble."
 
While mould-related litigation has not exploded here, Canada is not immune, either.
 
Toronto's Steve Steiber and his firm, Steiber Berlach Gibbs, are at the epicentre of Canadian mould-related litigation. The firm is in the midst of one of Canada's highest-profile cases, a potential class-action suit involving a Newmarket courthouse.
 
In 2000, the Ontario government paid $19 million to remediate mould damage following health complaints by courthouse workers.
 
Still, in 2001, a police constable who worked at the courthouse filed a class-action suit on behalf of 300 people suspected of suffering health problems due to toxic mould exposure.
 
The defendants in the case include not only the owner and building manager, but the architect, contractor and mechanical engineer as well. The case is awaiting a certification judgment.
 
"Mould litigation is not something (professionals) can protect themselves against other than through their own skill - through proper design, through proper construction of buildings," Steiber says.
 
"You can't really say to them as a lawyer you should protect yourself by getting a disclaimer; it just doesn't work that way."
 

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