The Canberra builder accused of exposing a young family to asbestos is the subject of an investigation by WorkSafe ACT which could result in a prosecution.
The ACT government could withdraw the business' licence if it is found employees worked with the toxic substance without permission.
ACT Work Safety Commissioner Mark McCabe is seeking the introduction of $5000 on-the-spot fines for builders who do not dispose of asbestos properly.
He said the seriousness of the breaches of the Work Health and Safety Act meant the case could end up in court.
''Given the level of exposure to the family I think the public would demand prosecution if a breach of health and safety laws is proven in this case,'' Mr McCabe said.
The new fines will be considered as part of the ACT government's review of the Dangerous Substances Act, which is likely to be tabled in spring, with the new fine schedule to take effect from January 1.
The family whose home was contaminated says it remains out-of-pocket and shaken by the affair, which will see them require ongoing, annual medical check-ups for life-threatening illnesses.
In May the Canberra Times reported Kambah couple Justin and Erin Thompson and their children Dan, 5, and Sarah, 3, were forced out of their home for three weeks after the builder, hired to renovate their bathroom, used angle grinders to cut through asbestos sheeting in the house.
The family was living in the home at the time and Ms Thompson cleaned asbestos fibres from surfaces in the living area and kitchen, not knowing the danger the family were in until alerted by a neighbour, who called WorkSafe.
Mr McCabe on Monday confirmed the company involved in the incident was being probed by the organisation's serious incidents investigations team.
he said if the builder was found to have breached the Work Health and Safety Act, the consequences could be severe. Serious breaches of the act could result in large fines and jail time for company directors, he said.
A spokesman for the ACT Environment and Sustainable Development Directorate said all work with asbestos had to undertaken by a licensed person with active building approval and an asbestos control plan, and the company had none of those at the time of the renovation.
The spokesperson said the investigation was ongoing and ''a decision on the status of the nominee is awaiting the outcome of further investigations and advice from WorkSafe ACT''.
The builder declined to comment on the matter.
Mr Thompson said his family had hired another builder to renovate their bathroom, which was nearly finished.
''We've got a bath and a toilet after nine weeks, indoors, so that's good,'' he said.
Mr Thompson said about 120 of the family's personal items had been contaminated and had been destroyed, and that the builder had refused to refund the family's $6000 deposit or to provide compensation.