What Happens When Developers Can't Develop: Can and Should Resource Developers be Compensated When They Can't Develop Their Assets?


  • Shawn H.T. Denstedt Q.C., Partner, Osler, Hoskin & Harcourt LLP, Calgary, Alberta
  • and Ryan V. Rodier Associate, Osler, Hoskin & Harcourt LLP, Calgary, Alberta




Energy Law, Petroleum Law


This article considers the question of whether resource developers are entitled to compensation when their ability to exercise proprietary rights is effectively sterilized by government action, a phenomenon known as "de facto expropriation." It sets out the legal principles that have been applied by courts in Canada, the U.K., the U.S., and Australia. It discusses how courts have considered entitlement to compensation in this context, and how the quantum of compensation can be determined. It concludes that, absent some overriding public interest, the law supports compensating a party whose rights have been confiscated.