1. Joel Adams Jadams@uwo.ca ES 498G: Engineering Ethics, Sustainable Development and the Law Engineering Science 498G © J. Adams 2003-2004 8 - 9 Law of Torts for Engineers March 8 - 15, 2004

2. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.1 Key Course Topics 1.Professionalism, Ethics, the Code, Enforcement Professionalism, Ethical Theory, the Code Engineers in Industry, Management, Private Practice Negligence, Misconduct, Incompetence, Enforcement 2.The Legal System, Torts, and Contracts The Canadian Legal System, Business Organization Tort Law: Standard of Care, Liability, Product Safety Contract Law: Requirements, Discharge, Breach 3.Risk Management, Engineers and the Environment Ethics and Management of Risk Environmental Ethics and PEO Guidelines Sustainable Development

3. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.2 Last Class 1.Networking Kevin Bacon Numbers Case Study Assignment 2.Introduction to the Law Canadian Legal System Business Organization Assignment Position Paper was due previously

4. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.3 Today’s Class 1.Review of the Law Canadian Legal System Business Organization 2.Introduction to Tort Law Concepts Historical Case Studies Assignment(s) Case Study Assignment due Friday, March 26 th BUT NO PENALTY IF HANDED IN ON MONDAY (Final Date is still Friday April 2 nd )

5. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.4 Introduction to Canadian Law Canadian System: Common Law – includes “Judge-Made Law” Legislation – includes Codified Statutes Quebec’s System is based on Napoleonic Code Theory of Precedents Canadian Precedents British Precedents American Precedents Other (Commonwealth, etc.)

6. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.5 The Constitution of Canada The Constitution Act, 1982 Formerly the British North America Act, 1867 Provides Federal Government and Provinces the Authority to enact Legislation and divides Exclusive Powers Parliament of Canada: Regulation of Trade & Commerce, Taxation, Navigation & Shipping, Banking, Money, Bankruptcy, Patents, Copyright, Criminal Law, etc. Provincial Legislation: Taxation for Provincial Purposes, Public Lands & Forestry, Transportation & Local Public Works, Incorporation, Property and Civil Rights, Provincial Courts, other local matters…

7. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.6 The Canadian Charter of Rights Section 2, Fundamental Freedoms Conscience and religion; Thought, belief, opinion and expression, including freedom of press and other media of communication; Freedom of association Section 52(1): The Constitution of Canada is the supreme law of Canada, and any law that is inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no force or effect. But “reasonable limits” may be placed and Section 33 allows the government to override the Charter with a declaration

8. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.7 The Canadian Court Systems Federal Courts Supreme Court of Canada Highest Appeals Court Federal Court of Canada Patents, Trade-Marks, Copyright Provincial Courts General Division Large Claims and Federal Crimes Small Claims Provincial Division Domestic (not divorce), Provincial Crimes Eight Regions with Senior Judge for each Division

9. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.8 Terminology Public Law – includes criminal and constitutional law Private Law – includes contracts and torts Litigation – a lawsuit Plaintiff – party bringing the action (e.g., Crown) Defendant – the party defending the action (e.g., accused) Appellant – party appealing a decision Respondent – party trying to fight an appeal Privity of contract – contractual relationship Creditor – a party to whom an amount is owing Debtor – a party that owes money to a creditor Indemnification – promise to directly compensate or reimburse another party for a loss or cost incurred

10. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.9 Business Organization Sole Proprietorships Just you, taxed on T1 May need registration of name and/or licence Partnerships You and your friends, Default is shared liability, dissolve upon death of any partner May use a partnership agreements to change default Corporations (Provincial and Federal) A “fictitious person” under the law May provide tax and liability advantages Doesn’t legally dissolve when owners die Must have Shareholders, Directors, and Officers Public and Private Corporations May want a Shareholder’s Agreement

11. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.10 Introduction to Tort Law What is a Tort? Usually a civil wrong or injury, involving negligence, and may arise independently (or concurrently) of a contract Principles of Tort Law 1.The defendant owed the plaintiff a duty of care; and 2.The defendant breached that duty by his or her conduct; and 3.The defendant’s conduct caused the injury to the plaintiff Normally all three of the above must be satisfied

12. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.11 Other Tort Issues What is the Engineer’s Standard of Care? What is Strict Liability? What is Vicarious Liability? What are Concurrent Tortfeasors? What is Product Liability? What is the Duty to Warn? What are the Consequences? How can you Limit Tort Liability?

13. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.12 Reasonableness Usually, Principles of Reasonableness Apply Measured by conduct of “Reasonable” person in the circumstances Reasonableness defined by precedent and reasoning Apply this to the Principles of Tort Law: 1.The defendant owed the plaintiff a duty of care; and 2.The defendant breached that duty by his or her conduct; and 3.The defendant’s conduct caused the injury to the plaintiff

14. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.13 Tort Cases Studies Review history of Torts, especially in regards to the Canadian Professional Engineer Discuss actual cases that set important precedent Discuss Sample cases from textbook Advice from text for approaching the PEO exam: 1.Consider the Facts – don’t fully restate in an exam 2.Give Reasons – identify issues/demonstrate understanding of relevant legal principles 3.Format – point form okay, structure important 4.References – nice extra touch! 5.Focus on Chapters 1,2, 4-24, 28, 30, 32, 33, 36

15. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.14 Can we use this? Design Approach to Cases 1.Recognize the Need or Problem 2.Gather Information and Define the Problem 3.Generate Alternative Solutions (Synthesis) 4.Evaluate Alternatives (Analysis) 5.Decision Making and Optimization 6.Implementation Also, Answer these Questions Is this a Code of Ethics Legal issue? What part? Do engineers accept greater responsibility than others?

16. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.15 Important Tort Cases for Engineers These Cases are illustrative, but also provide important precedent in Canadian Law Hedley Byrne v. Heller & Partners Donohue v. Stevenson Wolverine Tube Brown v. York Canama v. Huffman SEDCO v. Kelly Edgeworth v. Lea Winnipeg Condos v. Bird

17. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.16 Donohue v. Stevenson [1932] A.C. 562 Plaintiff became ill by drinking a bottle of ginger beer Reportedly found a snail (decomposed) in bottle No privity of contract existed between consumer and manufacturer House of Lords found that the manufacture still had a legal duty to the ultimate consumer

18. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.17 Hedley Byrne [1964] A.C. 465 One of the most important cases for professionals! Plaintiff was an advertising agent that asked their bank about the credit rating of another company The defendants (other bankers) told the bank that the credit was okay but “without responsibility” The advice was bad and the plaintiffs lost money Plaintiffs lost – BUT the House of Lords said that the second bank would have been liable if they hadn’t disclaimed responsibility

19. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.18 Hedley Byrne Lessons “Where one person relied on the special skill and judgment of another, and when the second person knew of that reliance, the second person was duty bound to take reasonable care in exercising that special skill.” – text (Marston, pg. 37) How does this apply to engineers? Increased scope of damages available in tort actions to financial loss, as well as property and injury Focused attention on services by professionals with “special skill” (such as engineers)

20. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.19 Wolverine Tube v. Noranda et al. [1994] 21 O.R. (3d) 264 Noranda sold property to Wolverine after having a consulting firm (A. D. Little) perform a property assessment which they passed on to Wolverine The report included a detailed disclaimer that included no responsibility for third party use, including damages made based on the report The property (and the advice) was bad and Wolverine sued everybody but ADL was saved from Wolverine and Noranda by the disclaimer

21. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.20 Trident v. Wardrop [1979] 6 W.W.R. 481 Hedley Byrne applied to engineers in Manitoba An engineer was held liable to a contractor without privity of contract because of an unsuitable design and no clear disclaimer of responsibility “I have no difficulty in fixing the professional engineer with a duty of care towards the person who is to follow the engineer’s design, to ensure that the plans are workable, for breach of which duty the engineer may be made accountable.”

22. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.21 Brown & Huston v. City of York et al. [1983] 5 C.L.R. 240 Consulting engineers omitted important information relating to a soils report and ground-water levels Contract stated that the contractor also had to inspect by personal examination Contractor relied on engineer’s report – whoops! Contractor partly responsible, but the engineers were found 75% responsible under Hedley Byrne

23. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.22 Canama v. Huffman et al. [1983] 5 C.L.R. 149 Contractor submitted plans for a barn (over a manure pit) to an engineer at the Dept of Agriculture The engineer was not a paid consultant, but the contractor often relied on his advice of the years The contractor left the plans on the desk of the engineer, who replied: “Good set of plans. I like the detail. Wish I could spend that amount of time on each project. Keep up the good work.” What happened…

24. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.23 Canama v. Huffman et al. Results SPLASH! Two major structural problems in the plans: bad positioning of the rebar (too far from middle) and a lack of a rebar schedule Engineer argued that they did not know they were being consulted Court found them 50% liable because when “being held to account for negligence, it is not what we subjectively feel or think but what our conduct objectively makes the other person believe we feel or think.” Contractor was also found 50% guilty of failing to meet a reasonable standard of care for a design-builder – but on appeal the responsibility of the engineer was upped to 75%!!!

25. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.24 SEDCO v. Kelly [1988] 4 W.W.R. 221 (Sask. QB) SEDCO contracted with an architect who contracted with mechanical engineers (defendants) for HVAC The building was built for Hospital Laundry Services (co- plaintiffs) but cooling system was faulty HLS claimed losses due to taking “heat breaks” Because the engineer’s knew it would be used by a laundry company, they were found to have breached their required duty of care and found liable for economic losses by HLS

26. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.25 Edgeworth v. Lea [1994] 107 D.L.R. (4 th ) 173 Important Supreme Court decision overturned an earlier BC court decision “Liability for negligent misrepresentation arises where a person makes representation knowing another may rely on it, and the plaintiff in fact relies on the representation to its detriment.” Confirmed that an engineering firm preparing drawings and specifications can be liable in tort to a contractor, even without a contractual relationship Firm had exemption but didn’t cover liability of the firm Should have gotten a better lawyer!!!

27. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.26 Winnipeg Condos v. Bird Construction 1974: Winnipeg Condos builds a building 1978: Converted to a condo 1982: condo’s Board concerned about cladding Consultants advise that it is structurally sound 1989: storey-high section of cladding (20’) fell from the ninth storey level to the ground. Replacement costs estimated at $1.5 million

28. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.27 Winnipeg v. Bird Results 1995: Supreme Court Rules (overturns lower court) Judge was concerned about “liability in an indeterminate amount for an indeterminate time to an indeterminate class” (from an older case) But he found the original contractor guilty anyway “Key inquiry is foreseeability, not privity.” “duty of care…commensurate w/ industry standards” “owes duty of care to those who will use his product” Liable for repair of defects to “non-dangerous state”

29. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.28 Strict Liability Fault not only necessary for some “tortish” laws made by legislators (e.g., worker’s compensation) Strict Liability Manufacturer of product is liable even without error Traditionally only in the US Could extend to Canada through legislation

30. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.29 Vicarious Liability When someone is held responsible for another Employers can be held liable for employees Employee can still be held responsible in some cases Employers should provide professional insurance May seem “unfair” to employer, but point of tort law is compensate the victim – not to punish Edgeworth case also found that the firm was liable not the individual employees (engineers) May depend on where the reliance is focused

31. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.30 Concurrent Tortfeasors When more than one party and/or one tort contributes to damages Example includes Surrey v. Carrol-Hatch Engineers worked for architect Prepared tests and advised that more should be taken Architect rejected the recommendation Both were found liable to the owner: 60% Architect 40% Engineers

32. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.31 Products Liability Not “strict” in Canada like in the US (yet!) Applies principle of negligence Manufacturer could not have foreseen the defect Based on state of the technology at the time Sale of Goods Act and other statutes exist that may override common law Products must “be fit the purpose for which their sold” Restrictions or requirements on warrenties/disclaimers

33. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.32 Standard of Care and Duty to Warn Risk of injury is inherent in many products Manufacturers must warn the consumer of danger through appropriate labelling George Ho Lem v. Barotto Sports et al. George bought a shot-shell reloading machine from a store and was instructed in its use George didn’t read the manual and didn’t realize the consequences George’s gun chamber burst on firing and George was hurt George sued the store and the manufacturer Manufacturer had duty to warn and court ruled that it did

34. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.33 Lambert v. Lastoplex SCC 1971 Mechanical Engineer, purchased two cans of lacquer sealer made by one of the defendants to seal his rec room floor Cans had three separate caution statements to warn about flammability (“inflammable”) Next room over (door separating) had a natural gas furnace and a natural gas water heater – both with pilot lights Went to work with open cans, explosion and extensive damage occurred Supreme court found in favour of the Engineer!!! Yeah! Other company’s had much clearer labelling Also, as a Mechanical Engineer he was not held to a higher standard since it was the manufacturer’s duty to anyone

35. Intro to the Law and Tort Law for Engineers Engineering Science 498G © J. Adams 2003-2004 8.34 Next Class: Monday March 15, 2004 Topics Economic Losses and Limitations of Liability Other Torts Introduction to Contract Law Readings Marston, Ch. 4-6, especially case studies problems Try case studies, read pages 315-319 for guidance Preview Contract Law Assignments Case Study due March 26 th !