APPLIED SCIENCE 450

Professional Engineering Practice
Introduction
W. Scott Dunbar
Course Outline
What is a profession?
Legal aspects of engineering practice
Ethical issues in engineering practice
How engineering professionals work
Lectures can be roughly divided into these four
categories.
Lectures given by practicing engineers or by
members of professions that work with engineers
The Rules
Arrive on time
If you must leave before the lecture
ends, do it quietly
Whispering allowed during lectures, but
not conversations
The Most Important Rule
TURN OFF ALL CELL
PHONES,PAGERS AND ANY OTHER
DEVICE THAT COULD MAKE A
NOISE DURING A LECTURE!
A system we are working on
They have a lovely
“No cell phone”
policy here…
Reading, Assignments & Exam
Required reading
Two assignments: one legal, one ethics
One-two sentence answers
Brief discussion of a legal or ethical case
Description of decision-making case
One final exam
True/False, Multiple choice
Will likely include all material in course
Grade Distribution
Assignments:
2 @ 30% each ⇒ 60%
Exam:
1 @ 40% ⇒ 40%
You must pass the exam to pass the course
Marks deducted for late assignments
Final grade is a percentage NOT pass/fail
The Assignments:
Assignment 1: Engineering Law
Assignment 2: Ethics
Required for each assignment:
1 or 2 sentence answers
Assignment 2: description and
discussion of actual ethical decision-
making situation
Submitted on-line via web site
Working on an assignment
Working in groups is encouraged, but
write as an individual
And what are we looking for?
Questions: correct answers
Do you understand the issues?
Marks off for extreme cases of bad
grammar and poor sentence structure
The Exam
Randomly selected questions
Questions True/False, Multiple choice
Exam:
Class given 24-36 hour window to
complete exam
Each student given 1½ hours to
complete exam once started – no
stopping and re-starting
Cheating in a law and ethics course
is the height of irony
is unethical
could have legal implications
See the following:
http://students.ubc.ca/calendar/index.cfm?tree=3,54,111,959
http://students.ubc.ca/calendar/index.cfm?tree=3,54,111,960
Web Sites
All course material can be obtained via
www.webct.ubc.ca
Click on login link if you have a CWL id and
password
Your Course: APSC 450
Instructor: W. Scott Dunbar
Instructions are available at
http://courses.apsc.ubc.ca/webct123.doc
Contacts
Instructor:
W. Scott Dunbar
wsd@mining.ubc.ca
Teaching Assistants:
Ms. Jennifer Parry
Ms. Jemma Scoble
Term 2 section
View DVDs of lectures on your own time
Assignments and exam at specified
times
Managed via course web site
To do this:
Make a section switch via SISC
before September 20
1
APPLIED SCIENCE 450
Professional Engineering Practice
Professions and Engineering
W. Scott Dunbar
2
What is a profession? (Bayles, 2003)
Three necessary features:
• Extensive education and training
• Provides an important service to society
• Significant intellectual component
Other features:
• Period of certification or apprenticeship
• Organization into groups
You are experiencing training now. Engineers require the least amount of education
of all professionals to be able to practice. They do require a significant
apprenticeship period similar to other professions before becoming registered.
Word intellectual may sound a bit pretentious, implying deep thought. Meant to refer
to advice given about matters not understood by the average person.
During the last century, society has required a greater amount of specialized
knowledge to function. This has led to the need for more professionals.
•Engineers for energy, construction, software, and consumer products
•Accountants, lawyers, and business consultants for financial markets
•High degree of specialization in medicine owing to advances in medical
knowledge and treatments
3
A simpler definition (Davis, 1991)
“A profession is a group of persons who want to
cooperate in serving the same ideal better than
they could if they did not cooperate.”
The code of ethics defines how the profession will
do what they do
Not exclusive – could include many occupations
For engineers the basic ideal would be:
Apply technical or specialized knowledge to
serve society
This is a “minimalist”definition. However, it does have the advantage of not
requiring complexity and exceptions to exclude certain professions. Thus
electricians, plumbers etc registered with Applied Science Technologists and
Technicians of British Columbia are professionals according to this definition.
ASTTBC has the same code of ethics as APEGBC.
See http://www.asttbc.org/
4
Consequences and Issues
• A profession does not need society’s
recognition to be a profession
• If society recognizes the profession, it
gives it special privileges
• A profession is different from a union
Union: interests of its members
Profession: Interests of others
5
Why all this privilege?
It’s a trade-off
• Society wants what professionals can do, but it
wants assurance regarding work standards and
conduct of professionals
• If professionals provide the assurance, then
society is willing to provide sole rights to
practice and autonomy
A challenge of the monopoly granted to engineering some time ago brought this
response from a judge in dismissing the argument that a monopoly was against the
public interest:
“regulation of the professions is necessary to protect the public from
quackery and the charlatans who might otherwise prey on the public.”
6
The Social Contract
• Professionals agree to
– serve the needs of society
– regulate the provision of their services
• Society agrees to allow professionals
– an exclusive right to practice the profession
– autonomy in their practice
Do “lay people”have the time and resources to ensure that professionals are doing
their job properly?
How can society harness all this talent and knowledge for its benefit?
7
A distinction
Consulting professional - direct relationship to
client/customer, acts on behalf of client
Examples: lawyers, doctors, consulting
engineers
Scholarly professional - less direct relationship
to client/customer
Examples: professors, researchers, engineers
in large companies, junior lawyers in large
legal firms
Different ethical problems arise for each type of professional
8
Different problems
Consulting professions
• have more autonomy over how they do
their work
• are responsible to the client/customer
Scholarly professionals
• are typically directed by management
• are responsible to the organization
9
Professional Organizations
• Set standards for membership
• Accredit educational programs that prepare
candidates for membership
• Set standards of conduct
• Discipline members with respect to standards
• Advocacy and defense of the profession
Established by provincial statute to regulate a
profession. Responsibilities include:
Why?
Because the government does not have the resources or the expertise to regulate
the profession
But it is the most effective way to ensure that professional services are provided to
appropriate standards
For doctors: BC College of Physicians and Surgeons
For lawyers: BC Law Society
For accountants: The Institute of Chartered Accountants of British Columbia
10
Quebec Bridge Failures
The beginning of regulation in Canada
September 11, 1916
August 29, 1907
A lot of mistakes were made throughout this project:
This bridge was to be the longest in the world at the time, and was designed by
Theodore Cooper, the most famous railway bridge engineer in North America.
However, the railway company did not have enough money, so Cooper tried to
design a very inexpensive bridge.
Construction began using proposal drawings, which were only approximations of the
final design, and weren't intended to be used for the actual bridge.
It was noticed that the two cantilever arms were supporting 4000 tons more than
they should have when the design was being reviewed, but by this time, the bridge
had been under construction for seven months. Construction continued, since
opening on time was of prime importance.
On Aug 29, 1907 the bridge failed during construction, killing 82 construction
workers. A Royal Commission investigated the 1907 failure.
In 1914, a second attempt was made at construction, however on September 11,
1916, while attempting to connect a 195-metre steel span to the newly completed
north and south cantilever spans, a support on the lifting apparatus fractured,
plunging this new span into the river. This accident would claima further 13 lives.
Construction continued despite the demands of WW1. The bridge was completed in
1917.
11
The completed bridge today
In the 1920s, provincial statutes to license engineers
appeared.
12
Self Regulation
• Two parts:
– admission to profession
– discipline of members
• Admission controlled by committee
• Discipline Committee
– Reprimands, fines, expulsion for breaches of
standards of practice
– Committee decisions may be reviewed by
courts, but seldom over-ruled.
So what about this notion of Self Regulation?
Again referring to Canada, jurisdiction for the regulation of the practice of
engineering was created through the British North America Act. The BNA
Act defined Federal and Provincial jurisdictions, regulation of the
professions was an activity reserved to the provinces. The first move toward
regulation occurred in 1920. A year before the EIC proposed that the
profession be regulated and proposed model legislation. This move was
likely as an outcome of the concerns the leaders of the Institute had
regarding some notable and spectacular engineering failures. One of which
was the twice collapsed Quebec bridge. So in 1920 several associations
were formed and granted provincial Acts, others followed in relatively short
order.
Lawyers are legally bound to follow standards.
13
For engineers
• In British Columbia: APEGBC
– Engineers and Geoscientists Act, 1996
• In Ontario: PEO
– Professional Engineers Act, 1990, amended
2002
• In Quebec: Ordre des Ingénieurs
– Loi sur les Ingénieurs, 2002
14
Rest of the World
• US – practice regulated by state boards,
registration as PE
• Great Britain – Chartered Engineer (CEng)
title granted by Engineering Council
(mobility within ECU)
• South Africa – similar to Canada
We are rather unique in Canada. In the US, the practice of engineering is
regulated but as a government function through State Boards of
Registration. In Great Britain and Europe titles are granted by various
discipline focused Institutes, for example ICE. IMechE, IEEE, IStrutE, etc.
However they are not empowered by the force of legislation and thus do not,
strictly speaking, regulate the profession. South Africa just this year
introduced a self regulating system based on the Canadian model.
15
Regulation and advocacy
Conflict of interest between regulation and
advocacy
How can an organization simultaneously regulate
and advance professional and economic interests
and be objective?
In Ontario:
Professional Engineers Ontario (PEO) regulates
Ontario Society of Professional Engineers (OSPE)
advocates
See: http://www.ospe.on.ca/
For legal profession
Law Society regulates lawyers
Bar Association sets fees and fee policies, promotes the profession’s role in
society
For medical profession
College of Physicians and Surgeons regulates
Provincial medical association advocates
Separate advocacy society has been proposed in BC, but has met with resistance
so far.
16
What is a Professional Engineer?
• graduate from an accredited engineering
program
• Register as an Engineer in Training (EIT)
• obtain four years experience following
graduation, under the supervision of a
registered professional engineer
• apply for P.Eng. designation
In Canada, to register with a provincial
engineering association one must
17
In Washington State
www.dol.wa.gov/engineers/engfront.htm
18
In BC
www.apeg.bc.ca
19
In 2002 the numbers across the
country were … (Source: CCPE)
Northwest Territories
Yukon
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
Quebec
New Brunswick
Prince Edward Island
Nova Scotia
Newfoundland/Labrador
0 5 10 15 20 25 30 35 40
Percentage of Total in 2002: 151,992
20
By discipline in BC (August 30, 2005)
Source: APEGBC
Agricultural
Biomedical
Bioresourse
Chemical
Civil
Computer
Electrical
Engineering Physics
Environmental
Food
Forest
Geological
Geomatics
Geophysical
Industrial
Marine
Mechanical
Metallurgical
Mining
Naval Architectural
Petroleum
Software
Structural
0 1000 2000 3000 4000 5000

Number of Registered Engineers
Total: 17,559
21
Canadian Council of Professional
Engineers (CCPE)
• Formed by 12 provincial associations to set
national engineering standards
• Canadian Engineering Accreditation Board
(CEAB) is a standing committee of CCPE that
accredits engineering programs
• Terms engineer, engineering, professional
engineer, P.Eng., consulting engineer are
official marks of CCPE
CCPE and member associations have had trouble enforcing the use of the word
engineer. Thus we have Microsoft Certified Systems Engineer, recording engineers,
stationary engineers, none of whom have an engineering degree or are registered
as engineers with any association.
22
Enforcement
For a story concerning enforcement of the proper
use of the term engineer see
www.peo.on.ca/enforcement/Quebec_MS_April2004.pdf
Legal battles with Microsoft and other software
companies
23
A Legal Note
• At cocktail parties and similar social situations you are
free to call yourself an engineer if asked what you do.
• Do not advertise yourself as an engineer, sign any
document or issue anything that implies you are a
registered engineer
“I studied engineering real hard. Now I am one. Can I call
myself an engineer?”
Yes, but be careful. Context is everything.
Liabilities – who pays your insurance if things go wrong?
You can do engineering, but the work must be supervised
by a registered engineer.
What is the difference between doing engineering and practicing engineering? It is a
matter of public perception. The public expects practicing engineers to have certain
qualifications and to adhere to certain engineering standards and to conduct
themselves according to an accepted standard. Most anyone with a bit of
experience can do some form of engineering, but how could the public have some
assurance that it is any good. You might have slept during that course on digital
logic or concrete structure analysis or, even worse, have missed all the APSC 450
lectures.
It is the same as doing medicine just because you have a degree in medicine. How
is the public to know if you are qualified and follow standards set by the medical
profession unless you are registered with the provincial College of Physicians and
Surgeons?
Registration is required even for humanitarian work:
•The humanitarian group Doctors without Borders requires its medical
volunteers to have a current license to practice in their home country.
•Some positions in the humanitarian group Engineers without Borders require
registration as a professional engineer in the home country.
24
Legal definition of engineering in BC
Engineers and Geoscientists Act, BC
"practice of professional engineering" means the
carrying on of chemical, civil, electrical, forest,
geological, mechanical, metallurgical, mining or
structural engineering, and other disciplines of
engineering …
Rule #1 of definitions:
Don’t use the word to define the word
25
And to be specific …
… includes reporting on, designing or directing the construction of public
utilities, industrial works, railways, bridges, highways, canals, harbour works,
river improvements, lighthouses, wet docks, dry docks, floating docks, launch
ways, marine ways, steam engines, turbines, pumps, internal combustion
engines, airships and airplanes, electrical machinery and apparatus, chemical
operations, machinery, and works for the development, transmission or
application of power, light and heat, grain elevators, municipal works,
irrigation works, sewage disposal works, drainage works, incinerators,
hydraulic works, and all other engineering works, and all buildings necessary
to the proper housing, installation and operation of the engineering works
embraced in this definition
Whew!
26
Legal definition of engineering in
Ontario
Professional Engineers Act, Ontario
"practice of professional engineering" means any act of
designing, composing, evaluating, advising, reporting,
directing or supervising wherein the safeguarding of life,
health, property or the public welfare is concerned and
that requires the application of engineering principles,
but does not include practising as a natural scientist;
There’s that word again!
27
US National Research Council
Business, government, academic, or individual efforts in
which knowledge of mathematics and/or natural science
is employed in research, development, design,
manufacturing, systems engineering, or technical
operations with the objective of creating and/or
delivering systems, products, processes, and/or services
of a technical nature and content intended for use.
This could include everything!
And what about this word “technical”?
28
A dangerous equation
Engineering = Technology
The history of engineering is then the history of
technology. Every inventor is an engineer, every
industry manager is an engineer.
Not true.
But more importantly …
Why an engineer when a technologist will do?
29
It’s hard to define what we do
The cute and uninformative: (I forget the source)
“An engineer is someone who can do for a dollar what
any fool would do for ten.”
Preferable: (Dunbar, any year)
What engineers do is what they are seen to be doing.
The profession has a special place in society and it is
evolving.
This is as it should be. Allows flexibility and
change, avoids stagnation
30
Engineering is a social experiment
• Engineering uses new technologies in
products and systems developed to
satisfy needs of society
– Engineering can be used to improve social
conditions
• Products and systems are used in diverse
social contexts
– Engineering has an impact on society in both
intended and unintended ways
Engineering as Social Experimentation
Chapter 3 of Ethics in Engineering by Martin and Schinzinger
31
The public perception
Professions &
Professionals
Ooooh
O my
Come hither!
Aaaah
Professions rank highest in
prestige among occupations
32
Up and coming professions
• Human resources manager
• Social worker
• Journalist
• Paralegal
• Cosmetologist
• Pharmacist
• Librarian
• Contractor
Interesting to look at what these
occupations/professions are doing
33
Characteristics of up and comers
• Knowledge base for occupational
performance not well developed
• Knowledge and service orientation of
membership not uniform
• An academic “elite” usually takes the
lead in promotion of professionalism
• Great efforts made to write a code of
ethics
Example: J ohn Kenneth Galbraith
Member of Royal Commission investigating first Quebec bridge failure
Chairman of Engineering at University of Toronto
Strong advocate of re-organization of technical engineering education
At the Thirty-Sixth Annual Professional Meeting of The Engineering Institute of
Canada, in Montreal, on J anuary 25, 1922, Professor H.E.T. Haultain, of the
University of Toronto, was the luncheon speaker. He suggested the development of
an oath or a creed to which the young graduate in engineering could subscribe,
something in the form of the Hippocratic oath in the medical profession. This led to
the iron ring ceremony.
34
"I have been fixing a lot of sloppy and dangerous work for the past two
decades," says Holmes. "I think it's time to expose the work of these
so-called contractors and help homeowners make informed decisions. I
want to raise the bar of the construction industry and stop the slow
death of craftsmanship in this country."
…a gritty, close-up look at the renovation and construction process
from the perspective of a frank, experienced and professional general
contractor.
Holmes on Homes
See him on HGTV
Each week, construction and renovation expert Mike Holmes visits unlucky families
who have been swindled or abandoned during their home improvement projects.
Mike uncovers shoddy construction methods, improper techniques, and down right
rip-offs. While we watch Mike uncover and fix the problems, he explains how
homeowners can safeguard themselves from these unscrupulous builders and
dishonest contractors. Throughout the series, viewers learn valuable lessons for
their own home renovation projects such as the importance of a good contract,
proper payment terms and what good craftsmanship should really look like.
35
Certified Builders Association of New Zealand
www.certified.co.nz
See Code of Conduct link under Consumers section
36
So this is it
• Engineers organized to serve societal needs and
provide services to high standards.
• Code of conduct (a code of ethics) says how
they would achieve these ideals.
• Society accepted these ideals and granted
engineers the rights to self-regulation, an
exclusive right to practice, and autonomy in
their practice.
• You commit yourself to the code of ethics when
you register as a professional.
37
Commitment to Society
Item 1, APEGBC Code of Ethics
Hold paramount the safety, health and welfare of the
public, the protection of the environment and the
promotion of health and safety within the workplace.
Similar statements in all engineering codes of
ethics. The essential aspect is:
Place the public’s needs first before your own

Lindsay Kenney Li ndsay Kenney
APSC 450 APSC 450
INTRODUCTION TO THE INTRODUCTION TO THE
LEGAL SYSTEM LEGAL SYSTEM
Gregory S. Miller, P.Eng., LLB Gregory S. Miller, P.Eng., LLB










http://www.courts.gov.bc.ca/
This website contains a compendium of BC Law
• Glossary of legal terms;
• Part 1 “The Law, the Courts, the J udiciary and the Legal
Profession”
o Includes Constitutional, Statute and Common Law
• Part 2 - “The Canadian Charter of Rights & Freedoms”
• Part 3 – “Criminal Law, Evidence & Procedure”


Lindsay Kenney Lindsay Kenney
Imagine There Is No Law Imagine There Is No Law
No taxes, no government No taxes, no government
No crimes, no police, no protection No crimes, no police, no protection
No compensation for injury No compensation for injury
No property rights No property rights
No consumer goods No consumer goods
No social services (schools, hospitals) No social services (schools, hospitals)


Example: New Orleans 2005 where hurricane Katrina causes a storm
surge which overtops the levies and floods the City. Electrical power,
water distribution, emergency services, transportation infrastructure, etc.
suddenly cease to exist. The result is chaos.


Lindsay Kenney Lindsay Kenney
What is the law? What is the law?
a set of rules that enable people to live a set of rules that enable people to live
together and respect each others’ rights together and respect each others’ rights
“right” “right” – – an ability to act with an ability to act with impugnity impugnity
“privilege” “privilege” – – an ability to act under an ability to act under
certain circumstances, which may be certain circumstances, which may be
withdrawn by the state withdrawn by the state


So what is law?

• “merely a set of rules that enable people to live together and respect
each others’ rights”

• “the body of principles recognized and applied by the state in the
administration of justice”

• “a rule of civil conduct, prescribed by the supreme power in a state,
commanding what is right, and prohibiting what is wrong.”

As the citizens of New Orleans found in 2005, the law has to be more
than a theoretical concept. If the state is unable or unwilling to exercise
its power to enforce the law, it ceases to exist as do the other rights and
privileges of a civilized society.

• “right” – an ability to act with impugnity

• “privilege” – an ability to act under certain circumstances, which may
be withdrawn by the state;
Lindsay Kenney Lindsay Kenney
Development of the Law Development of the Law
Canadian Law is patterned after English Law Canadian Law is patterned after English Law
Roman conquest in 43BC Roman conquest in 43BC – – Lex Lex Romana Romana
Withdrawal of Rome in 5th C led to rise of Withdrawal of Rome in 5th C led to rise of
decentralized government under local kings decentralized government under local kings
Law varied from kingdom to kingdom Law varied from kingdom to kingdom
Norman Conquest in 1066 Norman Conquest in 1066 – – more centralized more centralized
control under an overall king control under an overall king
Development of “common law” Development of “common law”


• BC / Canadian law is based upon British law:
• The law of British Columbia was specifically acquired from the
law of England, as it existed on November 19, 1859
• See (English Law Act)

• Roman conquest in 43BC – Lex Romana
• Written laws (Code);
• Applied across the country;
• Enforced by the Roman Legions;

• withdrawal of Rome in 5
th
C led to rise of decentralized government
under local kings
• anybody who could field troops to enforce law was king
• law became what the (your) king said it was (local custom)
• varied from kingdom to kingdom (and, potentially, from day to
day)
• local custom prevailed until Norman Conquest in 1066 – more
centralized control under an overall king (William the Conqueror)

• Originally, the King dispensed law personally

• Developed into what we have today:
• Parliament, police, courts
Lindsay Kenney Lindsay Kenney
Sources of Law Sources of Law
Constitutional Law Constitutional Law
Common Law & Equity Common Law & Equity
Statute Law Statute Law
Administrative Law Administrative Law


These are the primary sources of law in BC / Canada


Lindsay Kenney Lindsay Kenney
Constitutional Law Constitutional Law
Relationship between people and state; Relationship between people and state;
Written / partly written / unwritten Written / partly written / unwritten
Canadian Constitution: Canadian Constitution:
• • British North America Act (1867) British North America Act (1867)
• • Constitution Act (1982) Constitution Act (1982)


• How we, as citizens, have agreed to govern ourselves:
• can be entirely written in single document (eg US Constitution)
• Alternatively, can be a patchwork of documents (eg UK - Magna
Carta, Bill of Rights, etc.)
• can also be unwritten, consisting of traditions

• Canadian Constitution
• Pre-1867, Britain ruled British North America directly;
• 1867 – Canada established by British North America Act of British
Parliament, which divides the powers between federal and
provincial governments

• 1982 – constitution was “patriated” by Canada Act of British
Parliament / Constitution Act of Canadian Parliament, latter
consisting of:
• Canadian Charter of Rights and Freedoms
• contents of British North America Act
• amending amending formula ( 7 & 50 rule) to deal with
“entrenched” rights and obligations
• result is a constitution which is entirely under our own control

• section 91 gives exclusive powers to federal government
• trade and commerce
• bankruptcy and insolvency
• navigation and shipping
• bills of exchange and promissory notes
• etc.
• all matters not given exclusively to provinces

• section 92 gives exclusive powers to provinces
• property and civil rights
• matters of a local and private nature in a province
• licencing of certain businesses and activities
• solemnization of marriage


• The Canadian Charter of Rights and Freedoms
• formerly, Parliament was supreme - could pass virtually any
laws
• now, Acts of Parliament have to be in accordance with Charter
so, arguably, Charter is supreme
• Charter is interpreted (necessarily) by unelected judiciary (part
of the separation of powers)
• US separation of powers is clear (executive, legislative,
judiciary)
• Canadian separation of powers is unclear (at federal level,
PM has control of executive and legislative and appoints the
judiciary)

Lindsay Kenney Lindsay Kenney
Common Law & Equity Common Law & Equity
King dispensed justice King dispensed justice
• • Delegated to “judges” Delegated to “judges”
• • Judges traveled in circuit Judges traveled in circuit
• • “stare “stare decisis decisis” ”
Property Law Property Law
Criminal Law Criminal Law
Tort Law Tort Law
Contract Law Contract Law
Equity Equity


• Originally, the King dispensed law personally but later delegated
authority to trusted officials (J udges);

• King Henry II
1
established a central judiciary

• post-1180AD judges went on circuit throughout England

• 1234AD – king’s judges began keeping records

• 1290AD – decisions recorded for use by others in “Year Books”,
resulting in the “common law” (common throughout England)

• 1477AD – introduction of printing to England, Year Books improved

• 16
th
C AD – regular law reports

• today, legal publishers and Courts make decisions available to public

• Common law basis is “stare decisis” – “let a decision stand” or “stand
by a previous decision”

• law developed in specific categories, to suit more complex society:

• property law – basic to a simple system of law:

1
1154AD to 1189AD
• king owns all land but lends to nobles in return for military
service
• needs to resolve disputes re: land
• needs to ensure order

• criminal law – also basic to a simple system of law:
• “king’s peace” necessary for society to function;
• certain activities (“crimes”) are outlawed, supervised and
enforced by state;

• contract law – necessary for more developed societies:
• manufacturing / buying / selling not practical until rules exist;
• “Law Merchant” – developed by Guilds but absorbed by royal
courts

• equity:
• direct appeal to king where common law too rigid
• King had inherent ability to supercede common law to give
“equity”
• Court of Chancery formed 15
th
C and equity rules developed

• equity and common law merged in late 19
th
C

• Supreme Court of BC is both a Common Law Court and a Court of
Equity – can fairly and seamlessly apply both






Lindsay Kenney Lindsay Kenney
Statute Law Statute Law
“ “statutum statutum” (it is decided) ” (it is decided)
Laws mandated by government Laws mandated by government
Can co Can co- -exist with Common Law exist with Common Law
Can codify Common Law Can codify Common Law
Can override Common Law Can override Common Law

• “statutum” – latin, meaning “it is decided”

• statutes are laws mandated by government, easy to change (good and
bad)

• override common law / codify common law
• eg. Vancouver Charter / Local Gov’t Act eliminate gov’t liability
in certain situations (overriding common law);
• eg. Sale of Goods Act codified the common law

• statute process:

1. A bill (essentially a proposed law) is presented to a legislative
body (Parliament or provincial legislature).
2. A motion is made (and passed) to have the bill 'read' a first
time.
3. The bill is then printed and circulated to the members to study.
4. The bill is later brought forward for debate (second reading) in
principle.
5. If the bill passes the second reading stage, it is sent to a
Committee for study and amendment on a clause by clause
basis.
6. Once passed by the Committee, the bill is reported in final form
by the Chair of the Committee for a third reading.
7. The bill is then debated for a final time by way of a motion to
have the bill read a third time.
8. If passed by a majority vote, the bill at the federal level goes to
the Senate where a similar process is followed.
9. Once a bill has been passed by the House of Commons and
Senate (or a province legislature) it goes to the Governor-
General (or Lieutenant-Governor, if provincial) for royal assent
– virtually automatic.
10. The bill becomes a law on receipt of royal assent, and effective
as a law when proclaimed in force.

• Common law and statute law can exist together (as in BC and Canada
generally)
• English Law Act was the first ordinance of the new colony of BC
• It stated that the law of England, as it existed on November 19,
1859 (statute and common law), was adopted as BC law;

• can go all the way and “codify” laws (as has Quebec), so all are
written;

• can go part way and "codify" portions of the common law (eg Sale of
Goods Act)

Lindsay Kenney Lindsay Kenney
Administrative Law Administrative Law
Government delegation of rule making Government delegation of rule making
authority authority
Administrative boards and tribunals: Administrative boards and tribunals:
• • Workers Compensation Boards Workers Compensation Boards
• • Canadian Radio and Telephone Canadian Radio and Telephone
Commission Commission
• • Labour Relations Board Labour Relations Board
• • Association of Professional Engineers and Association of Professional Engineers and
Geoscientists Geoscientists


• governments create boards / tribunals by statute to deal with certain
activities
• eg Labour Relations Board / CRTC / WCB / APEGBC

• statute allows tribunals to create their own procedure

Classification of Laws

• substantive – set out rights and duties of individuals

• procedural – how you enforce the rights and duties

• public law – deals with the relationship between government and
individuals

• private law – deals with the relationship between individuals;




Lindsay Kenney Lindsay Kenney
HEY, BE CAREFUL OUT THERE! HEY, BE CAREFUL OUT THERE!





Lindsay Kenney Lindsay Kenney
APSC 450 APSC 450
TORT LAW TORT LAW
Gregory S. Miller, P.Eng., LLB Gregory S. Miller, P.Eng., LLB



Lindsay Kenney Lindsay Kenney
Torts Torts
Latin, meaning “twisted or crooked” Latin, meaning “twisted or crooked”
Covers area of “civil wrongs” Covers area of “civil wrongs”
Mostly judge Mostly judge- -made (common law) made (common law)
Primary Objective Primary Objective – – compensation compensation
Secondary Objective Secondary Objective - - deterrence deterrence


• from the Latin “tortus”, meaning twisted or crooked;

• morphed through French into English as “wrong”;

• tort law is concerned with “civil wrongs” as opposed to “criminal wrongs”;
• civil - citizen v. citizen;
• criminal - state v. citizen;

• entirely judge-made (almost);

• primary objective of tort law is compensation for injuries;

• secondary objective is deterrence (punitive damages);


Lindsay Kenney Lindsay Kenney
Development of Tort Law Development of Tort Law
Writ of Trespass Writ of Trespass
• • 13 13
th th
C C
• • Responded to direct application of force Responded to direct application of force
• • Became the “intentional” torts Became the “intentional” torts
• • “Actionable Per Se” “Actionable Per Se” – – no proof of damage no proof of damage
Writ of Trespass on the Case Writ of Trespass on the Case
• • 14 14
th th
C C
• • Responded to indirect application of force Responded to indirect application of force
• • Became the “unintentional” torts Became the “unintentional” torts
• • Damage must be proven Damage must be proven


• Writ of Trespass:
• arose in 13
th
century as remedy for obvious forcible wrongs, the type
of wrongs which would provoke retaliation - breach of the king’s
peace;
• elements of trespass were force and direct and immediate injury to
person, lands or goods;
• actionable per se (without proof of damage);
• defendant has to raise issue of excuse or justification;
• roughly became the “intentional torts”;
• trespass to person became:
• assault;
• battery;
• false imprisonment;
• original fine and imprisonment were gradually eliminated, leaving
damages;

• Writ of Trespass on the case:
• arose during the 14
th
century for those situations which didn’t
necessarily involve force and direct damage;
• plaintiff has to prove wrongful intent or negligence and damage;
• became “negligence”

• example of the distinction between trespass and case:
• A throws log over fence and hits B - trespass;
• log doesn’t hit B, but he trips over it later - case;


Lindsay Kenney Lindsay Kenney
Bases of Liability Bases of Liability
Intention Intention
Negligence Negligence
Strict Liability Strict Liability


• intention
• foresight & desire of consequences (intention);
• foresight of probability but no desire (recklessness);
• requires volition (conscious choice);
• mistake doesn’t negate;
• youth/mental disability will negate;

• negligence:
• not a state of mind;
• conduct measured against reasonable person;

• strict liability:
• simple causal connection between act and injury;
• applies only to ultra-hazardous activities;


Lindsay Kenney Lindsay Kenney
Intentional Torts Intentional Torts
Battery Battery
Assault Assault
False Imprisonment False Imprisonment
Defamation Defamation



Lindsay Kenney Lindsay Kenney
Battery Battery
Intentional harmful or offensive contact Intentional harmful or offensive contact
with another with another
“Actionable Per Se” “Actionable Per Se”
Intention relates to touching, not harm Intention relates to touching, not harm


• battery =intentional harmful or offensive contact with another, whether
direct or indirect;

• co-existent with criminal sanction;

• protection of bodily security is the obvious goal;

• avoiding societal chaos is another goal (avoiding “eye for an eye”
conduct);

• proof of actual harm is not required - the touching itself is sufficient;

• not necessary for skin to be touched:
• clothing being worn;
• object being carried;
• horse being ridden;

• intention relates to the touching, not the harm;

• provocation is not an excuse:

• victim need not even be aware of the touching at the time;
• as when asleep or under anesthetic;
• as when a child doesn’t realize what is happening;


Lindsay Kenney Lindsay Kenney
Assault Assault
Intentional creation of apprehension of Intentional creation of apprehension of
imminent battery imminent battery
“Actionable Per Se” “Actionable Per Se”
Reasonable belief of victim is sufficient Reasonable belief of victim is sufficient


• assault =intentional creation of apprehension of imminent battery;

• protection of freedom from fear of interference with bodily security;

• actionable without proof of damage (“actionable per se”);

• need proximity in space and time:
• telephone threats may not be sufficiently proximate in space;
• “I will beat you next week” may not be sufficiently proximate in time;

• the actual intention of the defendant to use violence need not be proven, as
the plaintiff need only reasonably believe that he is in danger of violence;

• doesn’t extent to a third party:
• telling Bob that “I will beat J oe” isn’t sufficient;

Lindsay Kenney Lindsay Kenney
False Imprisonment False Imprisonment
Intentional wrongful confinement of Intentional wrongful confinement of
another person within fixed boundaries another person within fixed boundaries
“Actionable Per Se” “Actionable Per Se”
Must be complete confinement Must be complete confinement
Applies to everyone (incl. police) Applies to everyone (incl. police)
Police have statutory protection Police have statutory protection


• false imprisonment =intentional wrongful confinement of another person
within fixed boundaries;

• protects freedom of movement;

• actionable without proof of damage (“actionable per se”);

• must be complete confinement:
• not complete if reasonable mode of egress known to victim;

• victim need not be aware of the confinement at the time:
• for example, a child who may not be aware;

• available against government officials;
• police, prosecutors;
• Police are shielded from honest mistake by S.25 Crim code if
reasonable and probable grounds:
• if find committing summary offence;
• if reasonable and probable grounds that has, is, or about to commit
indictable offence;
• must state grounds for arrest unless too obvious or fleeing;
• ultimate charge does not have to be arresting charge;

• if arrest required, give police the information and let them use their
discretion - don’t want police acting as your agent because you don’t have
same protections;


Lindsay Kenney Lindsay Kenney
Defamation Defamation
A false statement about a person to A false statement about a person to
his/her discredit his/her discredit
Publication to third person required Publication to third person required
Truth is defence Truth is defence
Libel Libel – – written / recorded written / recorded
• • “Actionable Per Se” “Actionable Per Se”
Slander Slander – – oral oral
• • Proof of damage required Proof of damage required

• “a false statement about a man to his discredit”;

• can be caused by referring to someone as a “liar”, “crook”, “drunk”, “traitor”;

• standard:
• what “ordinary decent folk in the community, taken in general” would
feel;

• interpretation:
• natural and ordinary meaning:
• particular characteristic or activity may yield defamatory meaning;
• calling unionist a scab might be defamatory, manager not;
• the time and place of the publication may make a difference;
• calling someone a communist during the McCarthy era;

• the form of the communication:
• words:
• actions eg. defamation by drawing;

• who may be defamed:
• living people;
• non-natural persons:
• corporations, partnerships; professional associations;
• municipal corporation; school board; trade union;

• defamation must be communicated to a third person for it to be actionable;
• every participant in the publication is liable - those who prepared the libel
and those who distributed and disseminated the libel;
• “publication takes place when the words complained of are heard or read”;
• apology:
• publication of a full apology at the earliest opportunity is a means of
mitigating the damages;

Defences

• justification:
• truth is a complete answer to an action for defamation, falsity presumed;

• absolute privilege:
The smooth functioning of society requires that full and frank statements
be made at certain times without fear of prosecution for defamation. Such
occasions are:
• judicial proceedings;
• parliamentary proceedings;
• executive communications;
• covers ministers of the Crown;
• may not cover civil servants;
• does extend to spousal communications;

• qualified privilege:
• conditional immunity attaching to certain occasions if the otherwise
defamatory statements are made without malice;
• four main types of occasions:
• protection of one’s own interest:
• “akin to self-defence”;
• must be limited to that reasonably necessary to respond to the
original attack;
• common interest or mutual concern:
• moral or legal duty to protect another’s interest:
• eg comments made by a father to a daughter concerning the
daughter’s prospective husband;
• public interest:
• eg members of the public in reporting crimes to the police;
• malice:
• will defeat the claim of qualified privilege;
• will affect the assessment of damages;
• the plaintiff must prove malice once a claim of privilege has been
accepted by the judge;
• ill-will or indirect motive;
• excess of privilege:
• if the words are clearly outside the scope of the privilege, liability
will attach;


Lindsay Kenney Lindsay Kenney
Unintentional Torts Unintentional Torts
Strict Liability Strict Liability
Negligence Negligence
Nuisance Nuisance



Lindsay Kenney Lindsay Kenney
Strict Liability Strict Liability
“ “The person who, for his own purposes, The person who, for his own purposes,
brings on his land and collects and brings on his land and collects and
keeps there anything likely to do keeps there anything likely to do
mischief if it escapes, must keep it in at mischief if it escapes, must keep it in at
his peril; and if he does not do so, is his peril; and if he does not do so, is
prima facie answerable for all the prima facie answerable for all the
damage which is the natural damage which is the natural
consequence of its escape” consequence of its escape”


• Rylands v. Fletcher
“The person who, for his own purposes, brings on his land and collects
and keeps there anything likely to do mischief if it escapes, must keep
it in at his peril; and if he does not do so, is prima facie answerable for
all the damage which is the natural consequence of its escape. He can
excuse himself by showing that the escape was owing to the Plaintiff’s
default; or perhaps, that the escape was the consequence of vis major,
or the act of God …”

• the theory has been held not to apply to:
• overflow of domestic hot water heater;
• overflow of home plumbing systems;
• overflow from a sprinkler system;
• fire used for domestic purposes;
• the theory has been held to apply to:
• over flow of water industrial and commercial uses;
• fire used for industrial or commercial purposes;
• fire used in unusual ways:
• to thaw frozen pipes;
• to smoke out a rat;
• poisonous fumes from a fumigation activity;
Lindsay Kenney Lindsay Kenney
Negligence Negligence
ABC Rule ABC Rule
• • Duty of care exists Duty of care exists
• • There has been a breach of that duty There has been a breach of that duty
• • Damage has resulted from the breach Damage has resulted from the breach




Duty
• how does a Court decide, in a particular case, whether a duty is owed by
the defendant to the plaintiff? The Court looks to the “neighbour
principle” from Donoghue v. Stevenson;
“The rule that you are to love your neighbour becomes in law you must
not injure your neighbour; and the lawyer’s question, Who is my
neighbour? Receives a restricted reply. You must take reasonable care
to avoid acts or omissions which you can reasonably foresee would be
likely to injure your neighbour. Who, then, in law, is my neighbour?
The answer seems to be – persons who are so closely and directly
affected by my act that I ought reasonably to have them in
contemplation as being so affected when I am directing my mind to the
acts or omissions which are called in question.”

• BC v. RBO Architecture [1994] B.C.J . No. 1297
• Architect engaged by owner to provide design
• Engineer engaged by architect to provide subconsulting
• Engineer (and its employees) can be liable to owner in tort

• Dha v. Ozdoba [1991] B.C.J . No. 303
• Engineer is liable to employer for competence of design
• Municipality may also be liable (to employer) for approval of plans

• Sergius v. J anax Design & Drafting Services Ltd. [1992] B.C.J . No. 302
• Sergius purchased a house with a defective foundation
• This was a pure economic loss for which no duty of care was owed by
the foundation engineer

• Cooper v. Hobart 2001 SCC 79
• A duty of care requires both foreseeability of damage and proximity

• Fiduciary duty is different (see Landview Construction v. Simic
Engineering [1994] B.C.J . No. 113
• the 3 criteria which must be met in order for a fiduciary relationship to
exist:

1. Fiduciary has the scope to exercise discretion or power;
2. Fiduciary can unilaterally exercise that power so as to affect the
beneficiary’s interests;
3. Beneficiary is peculiarly vulnerable to the fiduciary holding that
power.

• Typically applies to:
• Lawyers;
• Trustees;
• Physicians;
• Spiritual advisors;
• Etc.




Breach
• to determine “b”, one must first ascertain the nature and quality of the duty
owed - this is the standard of care;

• the standard of care is set by law objectively:
• what would the reasonable person have done?
• some subjectivity in recognition that children, mentally disabled,
professionals, etc. may owe a different amount of care (a different
standard of care);

• experts/professionals:
• the reasonable person test is modified to the “person of average
competence exercising a particular calling”;
• “every recognized professional group has its own individual standard
to which all members of the profession must conform”;
• specialists may be required to conform to the standard of like
specialists;

• Hilton Canada Inc. v. S.N.C. Lavalin Inc. [1999] N.S.J . No. 188
• the engineer inspected a structure prior to purchase and concluded that
no major structural defects existed;
• corrosion of the steel beams supporting the structure discovered later;
• an engineering firm can be liable for the acts of its non-professional
employees if the standard of structural engineers is not met;
• if the standard of care at the time of the inspection was such that the
corrosion might not have been found, there is no breach;



• White Rock Lodge Properties v. BC Hydro [1993] B.C.J . No. 515
• geotechnical engineers did not identify a weak, thin layer of clay in the
foundation soils;
• A slide, thought to be the result of this layer, caused damage and delay
in the construction of a condominium;
• No breach of duty, because it couldn’t be shown that average
geotechnical engineers would have identified;



Causation
• the “but for” (also called the sine qua non) test is the most common means
of determining causation-in-fact:
• but for the negligence of the defendant, the damage would not have
occurred;
• Metropolitan Toronto Condominium Corp. No. 902 v. Macklingate
Development Inc. [1998] O.J . No. 6229
• Defendant may have breached Building Code in the installation of
fireplaces in condominiums
• Such a breach is not conclusive of connection with damage, so
negligence not proven
• Stanco Projects v. British Columbia 2004 BCSC 1038
• Tendering case
• Engineer breached law of tendering by “bid shopping”
• BC (Engineer’s client) liable to contractor for such
• Engineer not liable to BC in negligence because BC did not rely
upon the Engineer in making the tender award (no causation)

• multiple causes;
• can cause problems for the “but for” test:
• if two or more parties set independent fires which then engulf
the plaintiff’s house, each could say that the result would have
occurred without their conduct;
• the “substantial factor” test:
• “if the acts of two people are both substantial factors in
bringing about the result, then liability is imposed on both”;



• Two Negligent Defendants (Onus):
• where two defendants have acted negligently and one only has
caused a loss to the plaintiff, but the plaintiff is unable to prove
which caused the loss, both will be considered to have caused the
loss unless one can exculpate himself;
• this principle does not apply where the plaintiff has been
contributorily negligent;


Lindsay Kenney Lindsay Kenney
Nuisance Nuisance
The The unreasonable unreasonable interference with the interference with the
use and enjoyment of land by its use and enjoyment of land by its
occupier occupier
Unreasonable Unreasonable guaged guaged by: by:
• • Type and severity of harm Type and severity of harm
• • Character of locale Character of locale
• • Abnormal sensitivity Abnormal sensitivity
• • Utility of conduct Utility of conduct


• in the most general terms, nuisance involves the unreasonable interference
with the use and enjoyment of land by its occupier or some right by the
public;

• damage must be proven;

• damage is typically indirect, in the sense that it does not arise from the
direct application of force;

• the focus of the tort of nuisance is the type of harm that is suffered, rather
than some narrow form of prohibitive conduct;

• liability flows to those who create the nuisance or allow it to continue.




Lindsay Kenney Lindsay Kenney
HEY, BE CAREFUL OUT THERE! HEY, BE CAREFUL OUT THERE!




1
APPLIED SCIENCE 450
Professional Engineering Practice
Tort Law in Practice
W. Scott Dunbar, P.Eng.
2
Some legal terminology
Legal cases are denoted
X v Y
X is the plaintiff, Y is the defendant
If Y appeals the ruling of the case X v Y
Y is the appellant and X is the respondent
The appeal case is referred to as X v Y but the
date will be later than the original case
3
The ABC test for negligence
• a duty of care was owed by the defendant to
the plaintiff;
• there was a breach of the duty of care; and
• damages were caused by the breach of the
duty of care (causation)
There is no significance to the order in which
these are considered
As an engineer you could be either a defendant or a plaintiff. More likely you or your
company will be a defendant.
4
The Standard of Care
For engineers, the standard can be established by
• Precedent – the methods used by other
engineers,
• written standards, or
• testimony of experts
Duty of Care ⇒ Standard of Care
5
Liability in Tort
P
C
Duty of care
Breach of duty
Causation
⇒ lawsuit
6
BC Rail v. Canadian Pacific Consulting
1988
• CPC contracted to build OCS for BCR in 1982
• CPC subcontracted design of OCS in two tunnels
• Available data showed large volumes of water in
tunnels, high humidity, and presence of H
2
S
OCS – Overhead Contact System
7
Water + sulfur ⇒ stress corrosion
• System commissioned in late 1983
• March 1984 – OCS fails in Wolverine Tunnel
• May 1985 – OCS fails in Table Tunnel
8
Allegations: CPC consortium negligent
• did not investigate conditions in tunnel
• did not recognize that conditions in tunnel
could lead to OCS failure
• did not have the expertise necessary to design
OCS under these conditions
• did not provide a system with 50 yr life
Basically …
Did not exercise required standard of care
9
And the standard of care is …
“in accordance with the standards of care
practiced by leading international consulting
engineers engaged on similar projects providing
similar services.” (quoted from contract)
Judgment for plaintiff: $3,435,315
for re-design and replacement of OCS and extra
operating costs incurred
10
But …
• In 1990 CPC appealed saying
– Copper would have been used for the contact
wires even if corrosive conditions in tunnels
were known
– Several OCS replacements may occur during
operation –normal cost of operation
Damages reduced by cost of contact wire
11
Third party liability for professionals
Professional P liable to client C in contract and tort
P liable to third party X in tort only
All liabilities apply simultaneously and are not mutually
exclusive
contract
tort
P
X
C
It is possible for the client to sue the professional in both tort and in contract, but this
is rare. There may be advantages to suing in tort rather than contract. It depends on
the terms of the contract. See BG Checo International Ltd. V. BC Hydro and Power
Authority (1993), 99 D.L.R. (4th) 577 (S.C.C)
12
Donoghue v. Stevenson 1932
• August 26, 1928, Mrs Donoghue and a friend go
to Wellmeadow café in Paisley, Scotland
• Friend buys her a float - ice cream and ginger
beer. Some ginger beer remains in bottle
• Friend pours remaining ginger beer onto float
and out comes a decomposed snail
13
The legal conditions at the time
• Can’t sue owner of café since ginger beer
was bought by and served to the friend
• Can’t sue manufacturer – no relationship
• Friend cannot sue because he did not
suffer damages
• Sue the friend – some issues with this
Suing the friend would cost Donoghue money which she didn’t have. If the lawsuit
were successful, the friend could not recover because he did not suffer damages –
fast way to lose a friend.
There is also speculation that Mrs. Donoghue and her friend, a male, were not
supposed to be seen together
14
The Wellmeadow café and the bottle
Donoghue became sick
Sued the manufacturer - Stevenson
15
And the result was …
• Scottish court did not find in favor of
Donoghue
• Appealed to English court who overturned
the Scottish court decision
• Donoghue awarded £500
16
Before and after the case
Minchella Stevenson
The friend
contract
Before After
Minchella Stevenson
The friend
contract
Donoghue
tort
Before the case Minchella, the café owner, owed a duty of care to his customer to
serve products free of poisons, May Donoghue’s friend, and Stevenson, the
manufacturer, owed a duty of care to Minchella to ensure that the contents of the
bottle were free of decomposed snails and other poisonous substances. Donoghue
had no recourse. However, the case rendered Stevenson liable to Minchella and to
Donoghue because it was reasonable to foresee that Donoghue, a third party, could
share a bottle of ginger beer and thus be affected by the manufacturer’s actions.
17
Lord Thankerton
“… the respondent, in placing his manufactured
article of drink upon the market, has intentionally
so excluded interference with, or examination of,
the article by any intermediate handler of the
goods between himself and the consumer that he
has, of his own accord, brought himself into
direct relationship with the consumer.”
One origin of third party liability
18
Lord Atkin’s neighbour principle
Two concepts:
• Proximity
• Foreseeability
And who are these third parties?
“… persons who are so closely and directly
affected by my act that I ought reasonably to
have them in contemplation as being so
affected when I am directing my mind to the
acts or omissions which are called in question”
19
Hedley Byrne v Heller & Partners (1963)
Hedley Byrne Easipower
Heller
& Partners
HB asks their bankers to ask Heller for opinion
on creditworthiness of Easipower
HB bankers
potential
client
20
The letter
CONFIDENTIAL
For your private use and without responsibility on the
part of this bank or its officers
Dear Sir:
In reply to your inquiry we advise that Easipower Ltd is a
respectably constituted company, considered good for its
ordinary business obligations. Your figures are larger than
what we accustomed to see.
Yours truly
Heller & Partners
21
And so …
• HB takes on Easipower as client – begins
to pay for advertizing time
• Easipower becomes insolvent
• HB sues Heller claiming that letter was
negligent misrepresentation
– breach of duty of care
– breach of duty to use skill and knowledge
Negligent misrepresentations may also include the failure to disclose significant
matters.
22
Results of trials
• Original trial – no contract between defendant
and HB ⇒ no duty of care
• Appealed to House of Lords who said:
“if there was a foreseeable relationship
between the maker of a statement and the
receiver of the statement, then there could be
liability for the economic loss.”
But the disclaimer in the letter relieved Heller of
a duty of care
In other words, no voluntary acceptance of responsibility – no duty of care
23
Thus we have
• Donoghue v. Stevenson giving rise to third
part liability for actions
• Hedley Byrne v. Heller giving rise to third
party liability for written or oral
communications
24
Hodgins v. Hydro-Electric Commission
of Nepean (Ontario) (1972 and 1975)
• Hodgins wants house addition for an indoor
swimming pool
• Winch, electrical contractor, suggests electrical
heat for the addition. Takes plans to Nepean
HEC
• Runions, a technician of Nepean HEC, makes a
heat loss calculation to determine the annual
cost
Very interesting case which illustrates ABC test and how standard is established
25
Off the deep end …
Electrical consumption for 80°F
50,500 kWh Actual
22,700 kWh Estimated
Based on annual cost estimate Hodgins decides to
use electricity to heat addition
Of course, the pool is a heat sink
Hodgins sues Nepean HEC in 1972
26
The relationships
contract
indemnified
as employee
vicarious
liability
tort
Hodgins
Nepean
HEC
Winch
Runions
The third
party
27
In 1972 the judge said:
“There was no suggestion by Runions that he
made his heat loss calculation on the basis of the
room having a floor rather than a swimming pool,
and there was no qualification … that he had no
experience in calculating heat loss in a room
containing a swimming pool, …”
“… Runions … was in breach of that duty of care
spoken of in the Hedley Byrne case …”
Judgment for the plaintiff (~$5000 + costs)
28
In 1975 Nepean HEC appealed
Runions calculated the heat loss in the same
manner as anyone similarly expert in the art
would have done in 1967.
That the estimate was incorrect is not
questioned, but it is not sufficient that the
plaintiff establish merely that the Runions
estimate was wrong, he must go further and
establish that the incorrect estimate resulted
from a lack of skill, competence or diligence …
Appeal allowed, action of 1972 trial dismissed
29
Questions and Issues
• Runions knew that the room was to contain a
swimming pool
• But heat loss calculation was made assuming
baseboard heaters, not elevated radiant
heaters – baseboard heaters near a pool??
• Manager of OEL: Runions could have said: “We
have no experience with rooms with pools” So
why didn’t he say so?
Hodgins knew it was a problem. Mr. Scott (a PEng) of Ontario Electrical League
said that it was known that pools could cause a difference but that methods for
calculating heat loss in rooms with pools were not well developed.
30
Re qualification of estimate
One judge in the appeal said:
“… failure to qualify [the estimate] is not of
itself a separate item of negligence but … gives
rise to responsibility on the part of the person
giving the opinion and his employer where the
opinion is given carelessly or there is a failure
to exercise such care in giving the opinion
as the circumstances may require.”
In other words, failing to qualify is not
negligence, but careless qualification is.
It’s even more complicated. Another judge said that qualification cannot so limit the
plaintiff’s reliance on the estimate as to render it useless.
31
Respectfully, I disagree
• Failure to provide information is a well-
established tort
• Calculations may be correct, but to use a
method known to be incorrect indicates a
a lack of skill
32
The learned intermediary
R M
T P
contract
c
o
n
t
r
a
c
t
tort
t
o
r
t
L
A manufacturer M sells a product to retailer R which sells it to purchaser P. The
product is defective and injures P and a third party T. P can sue R in contract and R
can sue M for its loss, also in contract. P and T can sue M in tort. T might also be
able to sue R in tort, if R should have discovered the defect. A learned intermediary
L may be present who, based on information from M, would inform R, P and
possibly T of problems or dangers associated with the use of the product.
33
Frozen Soil?
Freezer room in plant froze water in underlying soil –
created a little “permafrost” zone
After demolition of plant, soil thawed. Foundation of new
building failed near location of refrigerator. Owners sued.
Defendants argued soil freezing was not the problem –
could not happen and not to that extent. Owners lost.
3-4 m
Meat-packing
plant
Most everybody has experienced the effects of freezing water in a confined space –
the container may break.
What happens to frozen fruit after it thaws?
This case shows the need to relate simple everyday things to what happens in more
complex situations.
34
Lake Peigneur, Louisiana
• Texaco drilling at edge of
Lake Peigneur
• Nov 21, 1980, early
morning, drill begins to tilt
• Drill finally collapses and
disappears into water
• Whirlpool forms and the entire lake drains into
underlying Diamond Crystal salt mine.
• Buildings of Live Oak Gardens on Jefferson Island slid
into lake
35
Lawsuits – for sure!!!
Diamond Crystal sued Texaco because water had dissolved
all the salt in the mine rendering it worthless
Texaco counter-sued saying they had asked about the
location of the mine but received no answer
Live Oak Gardens sued both Diamond Crystal and Texaco
A woman who worked in the mine sued Texaco for $1.45M
for injuries suffered while escaping from the mine
In the end Texaco and drilling company paid:
$32M to Diamond Crystal
$12.8M to Live Oak Gardens
36
Strict Liability
Liability without intent or negligence
Typically involves maintenance, handling and
transport of dangerous chemicals, materials or
animals
Strict liability applies despite precautions taken
In Canada, negligence is applied but standards of
care for dangerous activities are very high
Strict liability less common in Canada, but it is coming.
37
Rylands v. Fletcher (1868)
• Fletcher had earth-fill dam built on his
property to contain reservoir
• Dam failed and flooded plaintiff’s coal
mine
• Dam builders negligent for building dam
over old mine shafts that led to the mine
38
The legal conditions at the time
• Dam builders were not sued because they
were not employees of Fletcher –
vicarious liability not available
• Third party liability not available
• Strict liability imposed on defendant
39
A watershed case in the US
• 1980: Chevron Chemical Co dumps 3.5M
gallons of fertilizer wastes and storm-
water runoff into San Francisco Bay
• Paid $25,000 to state water regulators to
settle monetary claims arising from
discharge – thinks this is end of story
40
California Fish and Game Code 5650
“Do not deposit substances deleterious to fish,
plant, or bird life into state waters.”
A criminal statute that specifies a six month
prison term for violations
State argued that Chevron was strictly liable
Holy
#@%!
41
Summary
• Three-part test for negligence
• Standard of care must be evident
– Advice or design does not have to be correct
– Qualification of advice may be necessary
• Professional liability:
– to clients in tort and contract
– may be liable to third parties in tort
• Strict liability applies for dangerous
materials
All three parts of test must be present for negligence, namely
Duty of care
Breach of duty of care
Breach led to damage
Extent of third party liability depends on proximity of relationship and purpose of
advice
42
But the important messages are:
• The legal system works only with evidence
• There are rules about what evidence is
admissible and how it is admitted
• In legal situations, engineers must be able to
communicate equally well in technical and non-
technical language
APSC 450 – Professional Engineering Practice
Third Party Liability
As shown in the diagram below, a professional P can be liable to a client C in contract and tort
and to a third party X in tort. Furthermore, these liabilities apply simultaneously and are not
mutually exclusive.
1


contract
tort
P
X
C


While it may be easy to understand how a professional such as an engineer could be liable to a
client in contract and in tort, it is perhaps difficult to understand how liability to a third party
could arise. What are the circumstances? Who could these third parties be?

A bit of legal history, in the form of two landmark twentieth century cases, helps to understand
how the concept of third party liability arises and how it has evolved. These two cases will be
presented below.

Donoghue v. Stevenson
During the evening of August 26, 1928, Mrs. May Donoghue and a friend went to the
Wellmeadow Cafe in Paisley, Scotland. Her friend ordered a ginger beer and ice cream from the
cafe owner, Francis Minchella who poured some of the ginger beer into a tumbler to make an ice
cream float. Mrs. Donoghue drank the float from the tumbler. When her friend poured the
remainder of the ginger beer into the tumbler, a decomposed snail came out of the bottle. As a
result of consuming the ginger beer, Mrs. Donoghue became ill and sued the manufacturer.

The bottle of ginger beer was not filled at the cafe and was sealed with a metal cap to maintain
the aerated quality of the ginger beer. Based on this, it was clear that the snail had got into the
bottle at the factory where the ginger beer was manufactured. The bottle was opaque so that there
was no way the cafe owner, Mrs. Donoghue or her friend could see the contents. This proved to
be an important factor in the case.


1
It is possible for the client to sue the professional in both tort and in contract, but this is rare. There may be
advantages to suing in tort rather than contract. It depends on the terms of the contract. See BG Checo International
Ltd. V. BC Hydro and Power Authority (1993), 99 D.L.R. (4
th
) 577 (S.C.C)
APSC 450 – Professional Engineering Practice 2
Third Party Liability


This picture shows the Wellmeadow cafe soon after 1900.
(Source: http://www.scottishlawreports.org.uk/resources/keycases/dvs/mrs-donoghue-journey.html)

The manufacturer, David Stevenson, said he was not responsible because the beer was not served
to Mrs. Donoghue; rather it was served to her friend who bought it from the cafe owner,
Minchella. Under the law at that time, the manufacturer was right. There had been two earlier
English cases involving mice in beer bottles (!) in which it was found that the beer manufacturers
owed no duty of care to the consumer. Manufacturers only owed a duty to the retailer, implied by
a sales contract, that the product is not defective. In turn, the retailer owed a similar implied duty
to the purchaser. In this case it was Mrs. Donoghue’s friend who purchased the ginger beer and
thus Mrs. Donoghue had no recourse. Suing her friend was presumably not an option.

In part, based on this, the Scottish court did not find in favor of Mrs. Donoghue. However, the
case finally went to the English House of Lords who overturned the decision of the Scottish
court. There were many reasons for the decision and much discussion by five Lords, two of
whom dissented. The opaque bottle formed the basis of one of the key arguments for applying a
duty of care of the manufacturer to any potential consumer.

Mrs. Donoghue was awarded ₤500 in damages. As she was a declared pauper, this was a
considerable sum to her. What happened to her after the trial and what became of Stevenson and
his ginger beer operation is not known.
2


2
See http://www.scottishlawreports.org.uk/resources/keycases/dvs/donoghue-v-stevenson.html for an interesting
history of this case.
APSC 450 – Professional Engineering Practice 3
Third Party Liability

The original Stevenson bottle. As pleaded in the case, the bottle is brown and opaque, rendering
impossible the intermediate examination of its contents.
(Source: http://www.scottishlawreports.org.uk/resources/keycases/dvs/mrs-donoghue-journey.html)

Extension of the Duty of Care
The most significant result of this case was the extension of the duty of care. Prior to the case,
the duty of care was confined to a very narrow set of circumstances which typically included an
act that caused physical injury to an individual or property. Emotional harm, economic loss, and
harms caused by the written word or acts of omission were not considered. These were Victorian
times during which considerable emphasis was placed on self-reliance and social responsibility.
Duties of one party to another arose from voluntary agreements between the parties. If there was
no legal duty of care, as in a contract, the common law was reluctant to impose one.

A judge in and earlier (1929) case, Mullen v. Barr & Co. (1929 S. C. 461), in which a mouse was
found in a bottle of beer, made a statement that typified the attitude and approach taken to the
duty of care

In a case like the present, where the goods of the defenders are widely distributed
throughout Scotland, it would seem a little short of outrageous to make them responsible
to members of the public for the conditions of the contents of every bottle which issues
from their works. It is obvious that, if such responsibility attached to the defenders, they
might be called on to meet claims of damages which they could not possibly investigate
or answer.

APSC 450 – Professional Engineering Practice 4
Third Party Liability
“Buyer beware” seemed to be the guiding principle. However, there also seems to be a desire to
avoid the potential for chaos associated with a multitude of claims of a duty of care to any
member of the public who consumes the beer.

In Donoghue v. Stevenson, the judge Lord Atkin narrowed the potential range of liability by his
“neighbour principle”:

You must take reasonable care to avoid acts or omissions which you can reasonably
foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The
answer seems to be — persons who are so closely and directly affected by my act that I
ought reasonably to have them in contemplation as being so affected when I am directing
my mind to the acts or omissions which are called in question.

The narrowing of the duty of care occurs in two ways: through the notion of proximity –
“persons who are closely and directly affected” and the concept of forseeability – “ought
reasonably to have them in contemplation as being affected”. The idea that proximity gives rise
to a duty of care was not new but proximity extended beyond mere physical proximity where
acts could cause personal injury or property damage. However, the issue of whether a duty of
care arises because one can foresee people being affected by one’s actions was a new concept.

The drawing below shows the relationships between the parties before and after the case.


Minchella Stevenson
The friend
contract
Before After
Minchella Stevenson
The friend
contract
Donoghue
tort

Before the case Minchella, the café owner, owed a duty of care to his customer to serve products
free of poisons, May Donoghue’s friend, and Stevenson, the manufacturer, owed a duty of care
to Minchella to ensure that the contents of the bottle were free of decomposed snails and other
poisonous substances. Donoghue had no recourse. However, the case rendered Stevenson liable
to Minchella and to Donoghue because it was reasonable to foresee that Donoghue, a third party,
could share a bottle of ginger beer and thus be affected by the manufacturer’s actions.

One of the judges, Lord Thankerton, explained the mechanism by which this third party liability
arises in this case:

APSC 450 – Professional Engineering Practice 5
Third Party Liability
The special circumstances from which the appellant claims that such a relationship of
duty should be inferred may, I think, be stated thus - namely, that the respondent, in
placing his manufactured article of drink upon the market, has intentionally so excluded
interference with, or examination of, the article by any intermediate handler of the goods
between himself and the consumer that he has, of his own accord, brought himself into
direct relationship with the consumer, with the result that the consumer is entitled to rely
upon the exercise of diligence by the manufacturer to secure that the article shall not be
harmful to the consumer. [italics added]

In other words, there was no way anyone, not Minchella, not May Donoghue’s friend, and not
May Donoghue herself, could inspect the contents of the bottle without opening it and draining it
into some container other than the one containing the ice cream. Should every consumer be
required to do this? The manufacturer has thus placed himself in a direct relationship with any
potential consumer.

This case is one origin of third party liability, although there were previous cases involving
defective products and concerns about the liability of manufacturers. It is a product liability case
where the actions of a manufacturer are called into question. In 1963 the following case was
tried in England and gave rise to third party liability of professionals or others with specialized
knowledge for their written or oral communications.

Hedley Byrne & Co. v. Heller & Partners Ltd.
Hedley Byrne & Co were advertising agents who were considering Easipower Ltd. as a potential
client. However, Hedley Byrne had doubts about Easipower’s financial status and asked their
bankers to obtain a statement of Easipower’s financial position from Heller & Partners who were
merchant bankers with whom Easipower had an account. Specifically Hedley Byrne asked
whether Easipower were trustworthy to the extent of £100,000 per year. Heller & Partners
replied as follows:

CONFIDENTIAL
For your private use and without responsibility on the part of this bank or its officers

Dear Sir:

In reply to your inquiry we advise that Easipower Ltd is a respectably constituted
company, considered good for its ordinary business obligations. Your figures are larger
than what we accustomed to see.

Yours truly

Heller & Partners

Hedley Byrne did not communicate directly with Heller but its bankers informed them of the
contents of the letter, including the disclaimer of responsibility at the top. As a result Hedley
Byrne accepted Easipower as an account and placed extensive advertising space and time for it,
running up a balance of several thousand pounds. Shortly afterwards Easipower became
APSC 450 – Professional Engineering Practice 6
Third Party Liability
insolvent and went into liquidation, able to pay only a small portion of its debt to Hedley Byrne.
Hedley Byrne sued Heller for the resulting loss claiming that Heller’s response to the request for
information was a negligent misrepresentation of Easipower’s creditworthiness, that is, Heller
breached both the duty of care and the duty to use their skill and knowledge.

Notice that Hedley Byrne had no contractual relationship with Heller. For this reason, in the
original trial it was held that the defendants owed no duty to Hedley Byrne. The following year,
1964, the case went to the House of Lords where it was stated that if there was a foreseeable
relationship between the maker of a statement and the receiver of the statement, then there could
be liability for the economic loss. Thus Heller did indeed owe a duty of care to Hedley Byrne;
they should have foreseen that its statements would be used by the customer of the bank
requesting the information. However, in this particular case, there was no liability as there had
been a disclaimer attached to the statement, so there was no ‘voluntary assumption of
responsibility’.

Although Heller was not required to pay damages, Hedley Byrne established the principle of
liability to third parties for negligent misrepresentation and forms the basis for the liability of
professionals to third parties.

The Principle of Third Party Liability for Engineers
A general statement of the third party liability principle is difficult to formulate but the main
points of the principle with respect to engineering professionals are:

• Proximity: There is a physical or logical connection between the engineer’s acts or
statements and a third party such that the acts would affect the third party or the
statements would be relied upon by the third party.
• Foreseeability: The connection is foreseeable and brings the engineer into a special direct
relationship with the third party.

The third party may be known to the engineer but this is uncommon. More likely the third party
may be a group of individuals whose identities are not known. Examples include consumers of a
product designed by the engineer or contractors submitting tenders (offers to build) that rely on
the design made by the engineer.

Lindsay Kenney Lindsay Kenney
APSC 450 APSC 450
CONTRACT LAW CONTRACT LAW
Gregory S. Miller, P.Eng., LLB Gregory S. Miller, P.Eng., LLB



Lindsay Kenney Lindsay Kenney
Contract Law Contract Law
A contract may be defined as an agreement A contract may be defined as an agreement
between two or more persons that is between two or more persons that is
enforceable at law. enforceable at law.
Comes into existence when the parties have Comes into existence when the parties have
established all of the elements to make it established all of the elements to make it
enforceable. enforceable.
Differs from tort law in that the parties are free Differs from tort law in that the parties are free
to define their own rights and duties, as to define their own rights and duties, as
between themselves, which the law will then between themselves, which the law will then
enforce. enforce.


• A contract may be defined as an agreement between two or more persons
that is enforceable at law;

• A contract comes into existence when the parties have established all of
the elements to make it enforceable;

• Contract law differs from tort law in that the parties are free to define
their own rights and duties, as between themselves, which the law will
then enforce;

• Originally, breach of promise was treated as a moral matter – governed
by Ecclesiastical Courts – but it is now a matter of law;

• Contract law is based upon bargain theory – each party gains some
benefit;

Lindsay Kenney Lindsay Kenney
Engineering Contracts Engineering Contracts
Professional Services Professional Services
Employment Employment
Goods and services Goods and services


• Tip – not all contracts are required by law to be in writing but all should
be in writing for evidentiary purposes;
• Engineers seem reluctant to reduce their contracts to writing
• These are the types of contracts that engineers can expect to see:
o Professional services agreements;
o Employment contracts;
o Goods and services contracts;


Lindsay Kenney Lindsay Kenney
Contract Law Contract Law
Elements of Valid Contract Elements of Valid Contract
• • Intention to create legal relationship Intention to create legal relationship
• • Offer Offer
• • Acceptance Acceptance
• • Consideration Consideration
• • Capacity to Contract Capacity to Contract
• • Legality Legality
Form Form
Enforceability Enforceability
Privity Privity
Performance / Discharge Performance / Discharge
Breach Breach


• these are the essentials to contract law;
• without these a Court will not enforce the contract (ie no contract);


Lindsay Kenney Lindsay Kenney
Intention Intention
Promise is essential to a contract but Promise is essential to a contract but
not all “promises” are enforceable not all “promises” are enforceable
Intention to be bound separates Intention to be bound separates
gratuitous promises from legally binding gratuitous promises from legally binding
promises promises
Intention is presumed, except when the Intention is presumed, except when the
circumstances dictate otherwise circumstances dictate otherwise
Intention to Create Legal Relations Intention to Create Legal Relations


• Contract law deals with legally enforceable promises;
• One element is intention to be bound v. gratuitous promises;
• “I’d give a million dollars for a beer” – no intention to be bound,
therefore no contract;
• To make it easier, an intention is presumed by the law – except in family
matters and advertising;



• A tentative promise (containing some condition) is made by the offeror;
• It is not binding until the condition is accepted by offeree;

• offers:
• must be communicated by the offeror to the offeree;
• are not even valid until received by the offeree;
• only the person to whom an offer is made may accept the offer;
• exception is a special kind of offer made to public at large;

• An offer will lapse upon:
• rejection of offer;
• death of either party;
• bankruptcy of either party;
• declaration of insanity of either party;
• counter-offer;
• passage of specified time;
• passage of reasonable time if no specified time;
• overt physical act, such as leaving the negotiation;

• an offer can be revoked at any time;
• revocation must be communicated to be effective;
• offeree must actually be aware of revocation – posting is NG;
• an “option” is a separate promise that obliges the offeror to keep the offer
open for a specified period of time in return for some compensation or if
made under seal;
• revocation can be implied if the offeror deals the goods to another and the
offeree is aware of such;


• acceptance
• must be communicated to the offeror in the manner specified in the offer
• if not specified, the normal manner will be implied;
• eg. auction situation – waive your paddle, don’t mail in bid;
• Trans-Pacific Trading v. Rayonier Canada Ltd. [1998] B.C.J . No. 890
• Dispute arose whether contract had been accepted;
• Offer specified acceptance by fax;
• Acceptance delivered by mail but, in meantime, offer withdrawn;
• Not valid acceptance;
• must be clear and unconditional to be valid;
• can be acceptance by conduct:
• Wardrop Engineering v. Lake Manitoba Band 2002 MBQB 319;
• Miscommunication, not corrected by Band, sets Wardrop to work;
• Conduct inferring acceptance:
• inquiry by the Band Manager as to whether the plaintiff could be in
attendance at the reserve to do the work;
• failure to reply to the subsequent fax indicating that the plaintiff's
employees would be at the reserve to carry out the inspection;
• acquiescence by the Band in the inspection all indicated a clear
assent to the proposal;

• a conditional acceptance is a “counter-offer” which terminates the
original offer;
• an “inquiry” is a request for further information concerning the offer and
does not terminate the original offer;
• silence is not acceptance unless a pre-existing agreement or practice;
• normally accomplished by words such as “I accept your offer” but could
be nod of head / handshake / auctioneer’s gavel banding and the word
“sold” / removing the “shrink-wrap” (see Mortenson v. Timberline [2000]
WA-QL 629);
• “unilateral contracts” are accepted by performance of the condition:
• reward is example – deliver the dog, get the money;
• obvious danger is withdrawal of offer after performance begins but
before it is completed;
• the law will prevent offeror from withdrawing offer while performance
is underway, unless such an express limitation is included in offer;

Lindsay Kenney Lindsay Kenney
Consideration Consideration
Bargain Theory requires that something be Bargain Theory requires that something be
given for something in return. The given for something in return. The
somethings somethings are termed “consideration” are termed “consideration”
• • money money
• • a service a service
• • a promise to do something a promise to do something
• • a promise not to do something a promise not to do something
• • a relinquishment of some right a relinquishment of some right
If no consideration If no consideration – – gratuitous promise gratuitous promise
(unenforceable) (unenforceable)


• Bargain Theory requires that something be given for something in return –
the somethings are “consideration”;
• Something that the promisor receives in return for his/her promise:
• Money;
• a service;
• a promise to do something;
• a promise not to do something;
• a relinquishment of some right;
• if no consideration – a gratuitous promise which may not be enforceable;
• exceptions:
• gratuitous offer of service must be performed with care and skill
(enforced in tort, not contract);
• liability on a promissory note (or other negotiable instrument) to a
subsequent endorser;
• reliance by a charity (if significant donation);
• agreements under seal;



• The law prevents some categories of people from entering into contracts,
for their own protection:
• Infants (aka minors, persons of tender age);
• Drunken / insane persons;
• Bankrupts;

• Business Corp Act companies have capacity of natural person;
• Other corporations (eg municipal corporations) might have limited
capacity to contract:
• Burns Lake Indian Band v. Village of Burns Lake 2000 BCSC 1040:
• Village enters into 40 year agreement to supply water to band;
• Dispute arises and Village cuts off water;
• Band sues but Court held that Village did not have statutory
authority to enter into 40 year agreement (ie no contract);





• Contracts that are illegal in their formation are void:
• Kathleen Still v. The Minister of National Revenue [1998] 1 F.C. 549
• Still seeks permanent resident status;
• Works in meantime;
• When laid off, claims UI but is refused because work was illegal;
• Court held for Still – why?
• an illegal contract includes:
• any agreement to commit a crime (Criminal Code violation);
• spying;
• unconscionable interest;
• agreement not to press criminal charges in return for reimbursement of
stolen funds is against public policy and not enforceable;
• agreements which offend the Competition Act (price fixing, reduction of
competition, allocation of markets, etc.) are unenforceable;
• agreements which offend other statutes (zoning, worker’s comp, etc.) are
unenforceable;
• where licensing is specified by statute as a pre-requisite to practice,
unlicensed trades or professions cannot recover their fees (eg realtors);




Lindsay Kenney Lindsay Kenney
Requirements of Form and Writing Requirements of Form and Writing
Some contracts must be in writing Some contracts must be in writing
(formal) (formal)
• • eg eg contracts for the sale of land contracts for the sale of land
Most contracts need not be in writing Most contracts need not be in writing
(simple) (simple)
All contracts should be in writing for All contracts should be in writing for
certainty certainty


• very few contracts must be in writing (called “formal contracts”):
o land;
o power of attorney
• most contracts need not be in writing (called “simple contracts”)
• all contracts should be in writing (for evidentiary purposes);


• Mistake - the contract does not express the true intentions of both parties;
o mistake does not occur because one party didn’t read the contract
properly (see 978011 BC Ltd. v. Cornell Engineering [2001] O.J . No.
1446)
failure to notice and read a termination clause resulted in
Defendant having to pay Plaintiff for terminating the contract;
this was not a “mistake” sufficient to vitiate the contract;
o if representations are made, and they prove to be wrong, problem!

• Undue influence can vitiate a contract:
o When one exercises complete influence over another so that the
decision to enter into the contract cannot be considered to be the
other’s decision;
o Contract voidable when the influence is eliminated
o Independent Legal Advice (ILA) clause can avoid this problem;
• Duress
o Normally the threat of physical violence toward the person entering
the contract
o Economic Duress is possible in very limited circumstances (see Ellis
v. Friedland 2000 ABQB 657)
The Plaintiff must have protested;
there was no alternate course of action besides succumbing to the
request of the Defendant;
the Plaintiff did not or was unable to obtain independent legal
advice;
the Plaintiff took steps to avoid the course of action.



Once a contract has been established:
• each party is entitled to performance of the contract by the other;
• generally, only the parties to the contract incur liability for performance;
• this is referred to as “privity”;
• at common law (subject to exceptions), no privity – no liability to perform.

Exceptions include:
• partners in the ordinary course of partnership business enter into contracts as
the agents of their other partners, effectively binding them;
• contracts for land or goods that have conditions attached to them (eg RoW)
negotiated by others;
• beneficiaries under life insurance policies (assuming that a trust cannot be
established) are allowed by statute to sue the insurer to enforce the benefit;
• contracts can be assigned;
• negotiable instruments can be endorsed to others;
• Sale of Goods Act warranties (see Clare v. IJ Manufacturing 2003 BCSC 856).



Lindsay Kenney Lindsay Kenney
Performance Performance
Tender of payment and tender of Tender of payment and tender of
performance discharge the contract performance discharge the contract
Discharge by other means Discharge by other means
• • Termination as a Right Termination as a Right
• • External Events External Events
• • Condition Precedent Condition Precedent
• • Operation of Law Operation of Law
• • Agreement Agreement


• Contracts which contain all of the essential elements of agreement and
that do not contain elements to enable a party to avoid the agreement
must be performed in accordance with the terms;
• anything less than complete performance is a “breach” which renders a
party liable for the default;
• eg. An agreement to supply cans of fruit 30 to a case is breached if
they are supplied 24 to a case, even if the total number of cans is the
same.
• Performance by tender of payment (as specified);
• Performance by tender of an act (as specified);
• where performance is complete, the contract is said to be “discharged”;
• until discharged a contract remains in effect;

• Other means of discharge:
• Term of contract allowing discharge under certain conditions;
• External events (eg force majeure) – sailing trip cancelled if storm;
• Frustration – subject matter of contract ceases to exist;
• Operation of Law:
• Bankruptcy;
• War;
• Agreement – the parties can agree to discharge notwithstanding a lack of
performance;






• Refusal to perform may:
• Bring the contract to an end (discharge);
• entitle the innocent party to relief:
• damages suffered by the breach; or
• specific performance;

• Refusal can be express or implied:
• If express, the innocent party is free to proceed;
• If implied, innocent party takes a chance:
• eg. Contract for snow removal;
• Contractor disposes of snow plough – implied refusal to perform?

• Terms
• “conditions” are essential terms, breach of which results in rescission;
• “warranties” are minor terms, breach of which results in damages;
• conditions can become warranties:
• eg “time of essence”

• Fundamental breach:
• when parties have unequal bargaining power, one may insist upon terms
that are unfair;
• eg exemption clauses which require the innocent party to perform even
where the wrong-doing party is in breach;
• Courts, recognizing this, invented the doctrine of fundamental breach to
avoid such unfair terms;
• applies where the performance by one party is so far below that required
by the contract that justice requires some remedy;


• law will compensate a breach with damages:
o put back into same position as would be in had breach not occurred;
o reasonably foreseeable (at time of contract) future damage;

• liquidated damages – genuine pre-estimate of damages;

• injured party has duty to mitigate (ie reduce own damages):
o Westland Investment v. Carswell Collins Ltd. [1996] A.J . No. 21:
Westland hired Carswell to provide design for a development;
Agreement (later in dispute) was that cost would be $35,000;
When cost ran over, Westland refused to pay more;
Carswell refused to turn over drawings so Westland hired new
designer to completely re-design;
Westland failed to mitigate – it should have paid and then sued
for recovery.

• in rare cases, law may force performance (specific performance);
• law may require that one party not do something (injunction);
• if damages can’t be established, reasonable price for benefit obtained or
work actually done (quantum meruit);





Lindsay Kenney Lindsay Kenney
HEY, BE CAREFUL OUT THERE! HEY, BE CAREFUL OUT THERE!





Lindsay Kenney Lindsay Kenney
APSC 450 APSC 450
DISPUTE RESOLUTION DISPUTE RESOLUTION
Gregory S. Miller, P.Eng., LLB Gregory S. Miller, P.Eng., LLB




Lindsay Kenney Lindsay Kenney
Options for Dispute Resolutions Options for Dispute Resolutions
Capitulate Capitulate
Negotiate Negotiate
Mediate Mediate
Arbitrate Arbitrate
Litigate Litigate


Your options:
• Capitulate:
o It isn’t worth fighting about, give them what they want
• Negotiate:
o Sit down and talk to the other side and make mutual compromises
• Mediate
• Arbitrate
• Litigate


Lindsay Kenney Lindsay Kenney
Mediation Mediation
An alternate dispute mechanism whereby An alternate dispute mechanism whereby
the mediator acts as a facilitator the mediator acts as a facilitator
assisting the parties in coming to a assisting the parties in coming to a
mutually agreed settlement. mutually agreed settlement.
( (http://www.bankruptcycanada.com/bankruptcydictionary.htm#m http://www.bankruptcycanada.com/bankruptcydictionary.htm#m) )
Informal process Informal process
Can be made mandatory by statute Can be made mandatory by statute


• Mediation is a structured negotiation, with assistance
• Parties to dispute negotiate with help of paid (usually) facilitator
• If negotiations progress, mediator has nothing to do
• If negotiations start to breakdown, mediator keeps them going
o Caucus with parties
o Make suggestions
o Recommend a sanity break, etc
• The parties, not the mediator, decide whether to settle
• Usually, parties leave a successful mediation feeling each side gave
something up to achieve settlement
• Once in litigation, statutory provisions can make mediation mandatory



Lindsay Kenney Lindsay Kenney
Arbitration Arbitration
A dispute resolution mechanism, whereby A dispute resolution mechanism, whereby
an independent neutral third party is an independent neutral third party is
appointed to hear and consider the appointed to hear and consider the
merits of the dispute, and who renders a merits of the dispute, and who renders a
final and binding decision called an final and binding decision called an
award. award. ( (http://www.bankruptcycanada.com/bankruptcydictionary.htm http://www.bankruptcycanada.com/bankruptcydictionary.htm) )
Less formal than Court Less formal than Court
Process is by agreement Process is by agreement
Limited appeal to Court Limited appeal to Court


• A poor substitute for the Court system
• Parties hire a judge (arbitrator) and submit their positions
• Arbitrator decides the issues in dispute
• Advantages:
o Can be quicker than litigation
o Arbitrator is agreeable to all parties, and paid by them
o Arbitrator can be an expert in the field
o Can keep the result out of the public domain
• Disadvantages:
o Can be slower than litigation because no one has the whip
o Discovery processes are not available
o Loser might take issue with result
o Very little precedential value


Lindsay Kenney Lindsay Kenney
Development of Courts Development of Courts
England: England:
Chancery, Common Pleas, Exchequer, Chancery, Common Pleas, Exchequer,
Ecclesiastical, etc. Ecclesiastical, etc.
Court of King’s Bench was “superior” court Court of King’s Bench was “superior” court
(inherent jurisdiction) (inherent jurisdiction)
British Columbia: British Columbia:
Supreme Court of British Columbia is Supreme Court of British Columbia is
“superior” court “superior” court


• Litigation should be last resort
• State structured, sponsored and backed dispute resolution system
• If dispute is put to the Court, the Court will decide
• Our system developed initially in England where there were a plethora of
early, specialized Courts
• Court of King’s Bench dominated – “superior” Court
• KB decided that it had virtually unlimited jurisdiction to hear any kind of
dispute known to the law
• Supreme Court of British Columbia is descendent of KB

Lindsay Kenney Lindsay Kenney
Canadian Courts Canadian Courts
1663 1663 – – New France New France – – “Customs of Paris” “Customs of Paris”
1763 1763 – – New France surrendered to New France surrendered to
England England
1774 1774 – – Quebec Act establishes King’s Quebec Act establishes King’s
Bench but retains “Canadian” law Bench but retains “Canadian” law
1783 1783 – – “Quebec” divided into “Upper” “Quebec” divided into “Upper”
and “Lower” Canada and “Lower” Canada
• • Upper Canada adopts English Law Upper Canada adopts English Law
• • Lower Canada retains Customs of Paris Lower Canada retains Customs of Paris


• New France operated under Customs of Paris
• In 1763, France ceded New France to England
• In 1774, England passed “Quebec Act”
o Established King’s Bench
o Retained “Canadian Law” (Customs of Paris)
• In 1776, American’s defeated the English (but retained structure of law)
• 10,000 UEL migrated north, to be under English rule
• They demanded English Law
• In 1783, Quebec divided into Upper Canada (English Law) and Lower
Canada (Customs of Paris)


Lindsay Kenney Lindsay Kenney
Canadian Courts cont’d Canadian Courts cont’d
1867 British North America Act: 1867 British North America Act:
s.96 The Governor General shall appoint s.96 The Governor General shall appoint
the Judges of the Superior, District, and the Judges of the Superior, District, and
County Courts in each Province, except County Courts in each Province, except
those of the Courts of Probate in Nova those of the Courts of Probate in Nova
Scotia and New Brunswick. Scotia and New Brunswick.


• In 1867, England passed British North America Act
o Gave structure to a federal form of government in Canada;
o Established structure to judiciary (s. 96)
o Superior Courts in Canada are referred to as s. 96 Courts


Lindsay Kenney Lindsay Kenney
CRIMINAL APPEALS*
SUPREME COURT
OF CANADA
SUPREME COURT
OF CANADA
Provincial/Terri torial
Supreme/Superior
Courts of Appeal
Provinci al /Territorial
Supreme/Superi or
Courts of Appeal
Provinci al /Territorial
Supreme/Superior Courts
Provincial/Territori al
Supreme/Superior Courts
Magistrate’s/Provinci al /Youth
Courts (Court of Sessions of
the Peace i n Quebec)
Magi strate’s/Provi ncial/Youth
Courts (Court of Sessions of
the Peace in Quebec)
* Court names, and i n some cases, appeal routes, differ for some provinces.
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Criminal Court system today has this structure

• Each province has an inferior (provincial) and superior trial Court
• Each province has a superior appeal Court
• The final appeal is to Supreme Court of Canada


Lindsay Kenney Lindsay Kenney
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CIVIL APPEALS*
SUPREME COURT
OF CANADA
SUPREME COURT
OF CANADA
Provincial/Territorial
Courts of Appeal
Provincial/Territorial
Courts of Appeal
Federal Court of Appeal
Federal Court of Appeal
Federal Court,
Trial Division
Federal Court,
Trial Di vision
Tax Court
Tax Court
Provincial/Territorial
Supreme/Superior Courts
Provincial/Territorial
Supreme/Superior Courts
Divisional
Court
Divisional
Court
Surrogate/Probate

Courts, etc.
Surrogate/Probate

Courts, etc.
Small Claims/Magistrate’s †
Provincial Courts
(limited right of appeal)
Small Claims/Magistrate’s †
Provincial Courts
(limited right of appeal)
* Some provinces do not have all of the courts shown on this chart.
† Appeal routes vary from provi nce to province with respect to Small Clai ms Court s.
Special courts, such as Probate or Surrogate, usually have disputes liti gated in the Supreme Court of the province.
Ontario only. The Divisional Court is a unique court in that it can conduct both tri al s and certain types of appeals.


Civil Court system today has this structure

• Dominated by the superior Courts (s. 96 Courts)
• “Provincial” Courts have a role in (generally) less serious matters
o some criminal jurisdiction
o jurisdiction is limited by statute (unlike superior Courts)
o appeal is typically to a superior Court


Lindsay Kenney Lindsay Kenney
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FEDERAL COURT
Federal
Court
Tri al Di vi si on
Federal
Court
of Appeal
Supreme
Court of
Canada
Tri al Court Appeal Court Fi nal Court of
Appeal


• system of federal Courts to deal with purely federal matters (under s. 91
BNA)
o eg shipping


Lindsay Kenney Lindsay Kenney
How Superior Courts Work How Superior Courts Work
Trial Courts: Trial Courts:
• • Matters submitted via Writ of Summons or Matters submitted via Writ of Summons or
Petition Petition
• • Hear evidence, decide facts, apply law Hear evidence, decide facts, apply law
• • Render and enforce decision Render and enforce decision
Appeal Courts: Appeal Courts:
• • Review trial court decisions for error Review trial court decisions for error
Supreme Court of Canada: Supreme Court of Canada:
• • Review appeal court decisions for error Review appeal court decisions for error
• • Issue constitutional opinions to government Issue constitutional opinions to government


• Writ of Summons or Petition starts an “action” / “petition”, containing the
following statement:
ELIZABETH THE SECOND, by the Grace of God, of the United
Kingdom, Canada, and Her other Realms and Territories, Queen,
Head of the Commonwealth, Defender of the Faith.

To the defendant(s):

TAKE NOTICE that this action has been commenced against you by
the plaintiff(s) for the claim set out in this writ.

IF YOU INTEND TO DEFEND this action, or if you have a set-off or
counterclaim that you wish to have taken into account at the trial,
YOU MUST

• Trial Court hears evidence, decides facts, applies law, renders and
enforces decision
• Appeal Court will review Trial Court decisions for errors
• Supreme Court of Canada is Court of final appeal
o Will hear matters which it decides are of national importance
o Decides upon appeal Court errors
o Will render constitutional opinions when asked by Fed Gov’t

Lindsay Kenney Lindsay Kenney
Lower Courts Lower Courts
eg eg. . – – Provincial Court of BC Provincial Court of BC
Jurisdiction is limited by statute Jurisdiction is limited by statute
Judges appointed by Province Judges appointed by Province
Appeal is to superior court Appeal is to superior court


• Not s. 96 Courts
• No inherent jurisdiction – limited by statute
• J udges appointed by province
• Appeal is typically to a superior Court
o eg. criminal Court
o small claims Court


Lindsay Kenney Lindsay Kenney
Administrative Tribunals Administrative Tribunals
Tribunal to which a law gives specific and Tribunal to which a law gives specific and
limited jurisdiction. It generally operates more limited jurisdiction. It generally operates more
informally than would a court of justice. informally than would a court of justice. ( (http://www.ei http://www.ei- -
ae.gc.ca/en/glossary.shtml#A1 ae.gc.ca/en/glossary.shtml#A1) )
eg eg. APEGBC disciplinary tribunal . APEGBC disciplinary tribunal
Established by statute Established by statute
Often populated by experts Often populated by experts
May establish own procedures May establish own procedures
Must conform to rules of natural justice Must conform to rules of natural justice
Supervised to some degree by Courts Supervised to some degree by Courts


• relatively new development in law
• governments create subordinate rule making bodies (boards) by statute
o eg. APEGBC
• governments give boards power to decide technical issues relating to those
rules (tribunals)
• tribunals / boards usually populated by experts in that field
• tribunals establish own procedure
o might conform to superior Court procedure, usually not
o must comply with rules of natural justice
everyone has right to hear charges against them and be heard in
their own defence
entitled to counsel
entitled to have case decided on facts presented to tribunal
• Superior Courts have some ability to supervise tribunals
o Appeal to superior court for want of jurisdiction



Lindsay Kenney Lindsay Kenney
HEY, BE CAREFUL OUT THERE! HEY, BE CAREFUL OUT THERE!




BULL, HOUSSER & TUPPER
Christian J . Petersen
Applied Science 450: Professional
Engineering Practice Course
Bull, Housser & Tupper
October 4, 2005
Employment Law
Employment Law
in British Columbia
in British Columbia
BULL, HOUSSER & TUPPER
At least Five Legal Regimes
At least Five Legal Regimes
• Common law
• Employment Standards Act
• Labour Relations Code
• Human Rights Code
• Workers Compensation Act
BULL, HOUSSER & TUPPER
Common Law
Common Law
• law made by judges
• contract law
• oral and written
• express and implied terms
eg. Reasonable notice of termination
(or “Wrongful Dismissal”)
BULL, HOUSSER & TUPPER
Wrongful Dismissal
Wrongful Dismissal
• if no contract, reasonable notice
• based on age, service, position and
chances of reemployment
• can range from 0 to 24 months or
more
• includes benefit obligations
BULL, HOUSSER & TUPPER
Cause
Cause
• Theft
• Dishonesty
• Conflict of interest
• Wilful disobedience
• Insubordination
• Incompetence
• Absenteeism or lateness
• Intoxication
• Sexual harassment
BULL, HOUSSER & TUPPER
Duties of Employee
Duties of Employee
• Good faith and fidelity
• Confidential Information and Trade
Secrets
• Competition with Former Employer
• Duties may continue after employment
ended
• Fiduciaries owe special duties to the
employer
BULL, HOUSSER & TUPPER
Employment Contracts
Employment Contracts
• address up front the implied common
law duties
• often address such issues:
• what constitutes reasonable notice
• confidentiality
• ownership of intellectual property
• unfair competition
BULL, HOUSSER & TUPPER
Employment Standards Act
Employment Standards Act
• sets minimum terms and conditions
• deals with
• hours of work and overtime
• leaves
• vacation
• statutory holidays
• severance
BULL, HOUSSER & TUPPER
Employment Standards Act
Employment Standards Act
• Applies to everyone in BC unless
specifically exempted
• Exemptions from entire Act
• Professional engineers
• Union members
• Exemptions from portions of the Act
• Managers
• High Technology Professionals
• Other Employees of High
Technology Companies
BULL, HOUSSER & TUPPER
Labour Relations Code
Labour Relations Code
• governs relationship between
employer and unions
• deals with:
• how to unionize
• right to unionize
• collective bargaining
obligations
• right to strike, lockout and
picket
• how to decertify
BULL, HOUSSER & TUPPER
Human Rights Code
Human Rights Code
• protects employees against discrimination
• number of protected grounds
• age
• sex
• sexual orientation
• race
• religious
• colour
• ethnic origin
• marital status
• disability
• conviction
BULL, HOUSSER & TUPPER
Workers
Workers


Compensation Board
Compensation Board
• work related injuries
and illness
• safety requirements
BULL, HOUSSER & TUPPER
Christian J . Petersen
Applied Science 450: Professional
Engineering Practice Course
Bull, Housser & Tupper
October 4, 2005
Employment Law
Employment Law
in British Columbia
in British Columbia
UBC APSc 450
Introduction to
Intellectual Property Law
Blake R. Wiggs, P.Eng.
Oyen Wiggs Green & Mutala LLP
Intellectual Property Lawyers
480—601 West Cordova St.
Vancouver, B.C. V6B 1G1
tel: (604) 669-3432 fax: (604) 681-4081
bwiggs@patentable.com www.patentable.com
© Blake R. Wiggs 2005 2
Patent Basics
• a patent gives you the exclusive right to make,
use or sell an “invention”
• patent protection applies only if granted by the
federal government
• the protection applies throughout Canada—you
must apply separately in other countries
© Blake R. Wiggs 2005 3
Term of Patent Protection
• patent protection lasts for 20 years
– counting from the date you file the patent
application in the Patent Office
• an annual “maintenance fee” must be paid to the
Patent Office to keep your patent protection in force
• when your patent expires or lapses the invention
protected by the patent falls into the public domain
(everyone can freely copy anything in the public
domain)
© Blake R. Wiggs 2005 4
Only “Inventions” are Patentable
to be patentable, your “invention” must be:
(1) useful (it must work)
(2) novel (nothing identical anywhere on
earth)
(3) inventive (not obvious to someone of
ordinary skill in the art)
© Blake R. Wiggs 2005 5
Many Types of Inventions:
• mechanical: US 6,167,900
• electrical: US 6,097,253
• electromechanical: US 6,254,005
• chemical: US 6,455,573
• process: US 6,782,404
• snoring prevention: US 6,161,542
• religious soap: US 3,936,384
© Blake R. Wiggs 2005 6
US Patent No. 6,097,253
High Speed Process-Controlled
Transresistance Amplifier
© Blake R. Wiggs 2005 7
US Patent 6,167,900 Valve Stem With
Slidable, Rotatable Air-Tight Coupling for
Removably Attachable Devices
© Blake R. Wiggs 2005 8
US Patent 6,254,005 Card Reader
With Card Capture Clamp
© Blake R. Wiggs 2005 9
US Patent 6,455,573 Glycosidase Inhibitors
and Methods of Synthesizing Same
© Blake R. Wiggs 2005 10
US Patent 6,782,404 Jitter Tolerance Improvement by
Phase Filtration in Feed-Forward Data Recovery Systems
© Blake R. Wiggs 2005 11
US Patent 6,161,542 Method of Treating
Snoring and Obstructive Sleep Apnea
© Blake R. Wiggs 2005 12
US Patent 3,936,384
Religious Soap
© Blake R. Wiggs 2005 13
US Patent 3,936,384
Religious Soap
© Blake R. Wiggs 2005 14
ONE YEAR to Apply for Patent
you have ONE YEAR to apply to patent your
invention. The year starts with the earliest non-
confidential disclosure of the invention, e.g.:
–public use
–sale or offer for sale
–publication (print or electronic)
–exhibit at a trade show or conference
–any other disclosure that makes the invention
available to the public anywhere
© Blake R. Wiggs 2005 15
Example (one year to apply)
• 15 February 2005: Alice publishes a paper
disclosing her invention
• Alice must file her Canadian patent
application by 15 February 2006
• it does not matter where or how the paper
was published
© Blake R. Wiggs 2005 16
Foreign Patent Protection
• the US has a similar one year grace period
• most other countries have NO grace period;
patent rights in such countries are destroyed
by any prefiling disclosure of the invention
• “Convention priority” may preserve rights for
one year
© Blake R. Wiggs 2005 17
Example (Foreign Patent LOST)
Alice applies to patent the
same invention in Germany
20 August 2005
Alice applies to patent her
invention in Canada
3 June 2005
Alice publishes a paper
disclosing her invention
15 February 2005
• she may get a valid Canadian patent, but ...
• It’s too late to get a valid German patent
© Blake R. Wiggs 2005 18
Example (Foreign Patent OK)
Alice applies to patent the
same invention in Germany
20 August 2005
Alice publishes a paper
disclosing her invention
3 June 2005
Alice applies to patent her
invention in Canada
15 February 2005
• she may get a valid German patent...
• Convention priority applies if German
application filed by 15 February 2006
© Blake R. Wiggs 2005 19
Only Inventor has Grace Period
• grace period applies only to disclosures by the
inventor
• NO grace period if another person discloses
same invention before inventor applies for patent
• unless the other person’s knowledge of the
invention is derived from the inventor, in which
case the one year grace period applies
© Blake R. Wiggs 2005 20
Only Inventor gets Valid Patent
• only the original inventor (or her assignee)
may obtain a valid patent
• but fraudulent filing by a third party can
bar later filing by the true inventor
• first person to file a patent application wins
if different parties apply simultaneously to
patent same thing
• in the USA the first to invent wins (but the
US may soon adopt a first-to-file system)
© Blake R. Wiggs 2005 21
Example (nobody gets patent)
Bob applies to patent the
same invention in Canada
3 June 2005
Alice publishes paper
disclosing her invention
15 February 2005
• Bob can’t get a valid Canadian patent, due
to Alice’s prior disclosure (assumes Alice
didn’t derive the invention from Bob and
vice versa). Alice can’t get a valid
Canadian patent either—Bob filed first.
© Blake R. Wiggs 2005 22
Who Owns the Patent?
• every patent must name one or more
individual “inventors”
• inventor(s) do not necessarily own patent
rights
• inventor(s) may sell (assign) patent rights
to another party
© Blake R. Wiggs 2005 23
Who Owns the Patent?
• your employer may automatically own the patent
rights in an invention you make:
– pursuant to the employment contract you sign
– without any contract, if your invention is within
the scope of your employment duties
– if you make an invention “on your own time
without using employer’s resources” you may
not own the patent rights if the invention is
within the scope of your employment duties
© Blake R. Wiggs 2005 24
Prior Art Novelty Searches
• search before filing to assess patentability
• “prior art” = all previous patents, other
publications (print or electronic) anywhere,
any language
• objects in use, on sale, etc. are also prior
art
© Blake R. Wiggs 2005 25
Prior Art Novelty Searches
• pending patent applications may or may
not be prior art
• most countries publish patent applications
18 months after priority date
• published applications can be prior art
© Blake R. Wiggs 2005 26
Prior Art Novelty Searches
normally search online databases:
• http://patents1.ic.gc.ca/intro-e.html ← FREE
• http://www.uspto.gov/patft/index.html ← FREE
• http://www.delphion.com/ ← (subscription)
• there are lots of patents to search!
• search by keyword, inventor name, assignee name,
classification & much more
• difficult for newbies—patent lexicon can be obtuse,
verbose, arcane, opaque, etc.
• e.g. hole = “aperture”; “means for…”; etc.
© Blake R. Wiggs 2005 27
Prior Art Novelty Searches
• no search can guarantee patentability
• searches help you:
– assess the available scope of patent
protection
– justify time & money expenditure on a patent
application
• novelty searches are inadequate to assess
patent infringement or validity issues
– more extensive, expensive search required
© Blake R. Wiggs 2005 28
The Patent Application
• must fully disclose best mode of invention
• include drawings (except for some
chemical or process inventions)
• must provide sufficient detail for skilled
person to construct working embodiment
© Blake R. Wiggs 2005 29
The All-Important “Claims”
• “claims” define scope of patent protection
• if too broad—invalid & unenforceable
• if too narrow—inadequate protection
© Blake R. Wiggs 2005 30
Claim example: coffee cup
A drinking container comprising a
tapered cylinder having a closed
bottom end, an open top end and
a handle on an outward surface of
the cylinder.
• This claim is INVALID. The prior art is replete
with structures that come squarely within the
above claim language.
• Claims which don’t distinguish the prior art in a
novel, inventive manner are not patentable.
© Blake R. Wiggs 2005 31
How about …
A single cup disposable coffee brewing device comprising an outer
housing of a relatively stiff foldable material foldable from a first
folded unopened position to a second open unfolded position and
having an interior and an exterior thereby forming a conically shaped
holder adapted to extend into a cup when set on top thereof; a filter
secured in the interior of said housing having coffee grounds of a
predetermined grind and of a predetermined measurement disposed
therein, said filter comprised of a filter paper adapted to pass water
therethrough; an opening below said filter of a predetermined size
disposed in said holder communicating the interior of said holder
with the exterior thereof; and valve means of a hot water dissolvable
non-toxic gelatinous material for closing off said opening and
adapted to dissolve after a predetermined period of time when
contacted by water of a predetermined temperature, said time period
being sufficient to cause brewing of coffee grounds in said housing
prior to dissolving of said valve.
© Blake R. Wiggs 2005 32
Example: Coffee Cup
• That’s the level of detail that it took in 1997
to persuade the US Patent Office to grant
US Patent 5,605,710
© Blake R. Wiggs 2005 33
Patent Claims
• Claim must be like this →
• Claims which overlap the prior art are invalid
and unenforceable
Your
Claim
Prior
Art
Your
Claim
Prior
Art
• This is BAD →
© Blake R. Wiggs 2005 34
Patent Claims
• Claims which are too narrow are easily
avoided by competitors
Your
Invention
Your
Claim
• This is BAD →
© Blake R. Wiggs 2005 35
Examination by Patent Office
• must request examination and pay fee
–within 5 years of filing application
• technically trained Patent Office examiner:
–searches prior art
–assesses patentability of claims
–objects if claims are too broad, indefinite,
ambiguous, non-statutory subject matter, etc.
© Blake R. Wiggs 2005 36
Examination by Patent Office
• respond to Examiner’s objections by
argument &/or amendment
• may take 2-3 years to complete examination
• must pay issue fee upon allowance
© Blake R. Wiggs 2005 37
Trade Secret Basics
• business or technical information accumu-
lated with effort &/or expense and kept private
for competitive advantage
• law provides remedies if someone unfairly
misappropriates your trade secrets
© Blake R. Wiggs 2005 38
Trade Secret Basics
• trade secret is opposite of patent:
–must make full disclosure to get patent
–to maintain trade secret protection, must
NOT disclose the trade secret
• no need to apply—trade secret protection
is automatic
• but may have to enforce it at the provincial
level
© Blake R. Wiggs 2005 39
Trade Secret Basics
• protection lost if the “secret” is disclosed
• inappropriate if routine use will reveal the
“secret”
• may work well for processes
• reverse engineering is fair ball
© Blake R. Wiggs 2005 40
Keep it Secret!
• trappings of secrecy are important:
• restrict access to all “secret” materials
• mark “secret” materials CONFIDENTIAL
• insist on signed confidentiality agreements
before disclosing
• develop a written confidentiality policy and
adhere to it without exception
© Blake R. Wiggs 2005 41
Trade Secret Advantages
• may protect unpatentable subject matter
• protection theoretically lasts forever
(patents expire)
• protection is immediate (takes 2-3 years to
get a patent)
• protection is “free” (a patent can cost
thousands of $$$)
© Blake R. Wiggs 2005 42
Trade Secret Disadvantages
• nature of protection, or scope of trade
secret may be unclear
• can be difficult to prove actionable
misappropriation of trade secrets
• trade secret protection is lost if the “secret”
gets out
© Blake R. Wiggs 2005 43
Copyright Basics
• “work” must be original (not copied)
• ideas are not protected by copyright—only
the form of expression is protected
• no need to apply—protection is automatic
© Blake R. Wiggs 2005 44
Copyright Basics
• registration is optional in Canada
• registration provides some benefits if you
need to sue for copyright infringement
• preserves right to recover damages
• application covers formalities only
• specimen of work not required
© Blake R. Wiggs 2005 45
Term of Protection; © Notices
• protection usually lasts life + 50 years
• put “©” notice on all copies of work
• published works: © [year], [name]
• unpublished works omit “[year]”
© Blake R. Wiggs 2005 46
Ownership of Copyright
• creator of work generally owns copyright
• creator’s employer usually owns copyright
in works made in course of employment
© Blake R. Wiggs 2005 47
Industrial Design Basics
• outwardly visible features of shape or
ornamentation applied to an article
• function is NOT protected
• protection applies only if granted by
federal government
© Blake R. Wiggs 2005 48
Industrial Design Examples
swim goggles
toilet
© Blake R. Wiggs 2005 49
Industrial Design Examples
electrical connector faucet
© Blake R. Wiggs 2005 50
Industrial Design Basics
• protection applies throughout Canada
• must apply separately in other countries
• US equivalent is a “design patent”
© Blake R. Wiggs 2005 51
Term of I.D. Protection
• Canadian industrial design protection lasts
5 years from date registration issues
• renewable for one additional 5 year term
–i.e. maximum protection = 10 years
• US design patent lasts 14 years—no
renewal
© Blake R. Wiggs 2005 52
Design Novelty & Originality
• “design” must be:
–novel (nothing identical anywhere)
–original (not copied)
© Blake R. Wiggs 2005 53
One year to Apply for I.D. Regn.
• must apply to register within ONE YEAR
of initial publication of the design
anywhere
• “publication” includes public use, sale,
offer for sale, etc.
• US has similar one year grace period,
but…
• as with patents, design rights lost in most
foreign countries if any prefiling disclosure
© Blake R. Wiggs 2005 54
Design Proprietorship
• only design “proprietor” (or assignee) may
obtain valid industrial design registration
• proprietor is author of design, or person
who paid for its creation
• individual artistic creations such as
statuettes, sculptures not reproduced in >
50 articles are protected by copyright, not
industrial design
© Blake R. Wiggs 2005 55
The I.D. Application
• usually no novelty search is done, since
search cost ≈ application cost
• application includes:
• drawings—show article from all sides, plus
isometric view
• optional (rare) statement of characteriza-
tion of primary distinguishing visual
features
© Blake R. Wiggs 2005 56
Examination of the Application
• Industrial Design Office examiner
searches & compares design with prior art
• examiner may reject application if design
is too similar to prior art
• applicant can argue against objections (or
amend statement of characterization, if
any)
• typically takes ~1-2 years to complete
registration
© Blake R. Wiggs 2005 57
Trademark Basics
• a trademark can be a word or words, a
design or word(s) + design
• must DISTINGUISH your wares or
services from those of your competitors
• some examples ...
© Blake R. Wiggs 2005 58
Single Word Trademarks
COKE
®
TWOALLBEEFPATTIESSPECIAL
SAUCELETTUCECHEESEPICKL
ESONIONSONASESAMESEEDB
UN
®
© Blake R. Wiggs 2005 59
Multiple Word Trademark
KENTUCKY FRIED CHICKEN
®
© Blake R. Wiggs 2005 60
Design Trademark
© Blake R. Wiggs 2005 61
Words+Design Trademark
© Blake R. Wiggs 2005 62
Regd. vs. Common Law Protection
• registration not essential
• limited common law rights arise through
marketplace use of a trademark
• restricted to geographic area of use
• depends on extent mark known in area of use
© Blake R. Wiggs 2005 63
Advantages of Registration
• exclusivity applies throughout Canada
• regardless of how well trademark is known
• notice to others who search TM Register
• CIPO may refuse others’ applications to
register confusing trademarks
© Blake R. Wiggs 2005 64
Trademark Don’ts—Names
• AVOID trademarks which include personal
names
SMITH MUFFLER
© Blake R. Wiggs 2005 65
Trademark Don’ts—Place Names
• AVOID trademarks which include place
names
VANCOUVER MUFFLER
© Blake R. Wiggs 2005 66
Trademark Don’ts—Descriptive
• AVOID trademarks which clearly describe
your goods or services
MUFFLER SHOP
© Blake R. Wiggs 2005 67
Trademark Don’ts—Confusion
• AVOID trademarks which are similar to or
potentially confusing with trademarks, trade
names, business names or corporate names
used by others
SPEEDSTER MUFFLER
© Blake R. Wiggs 2005 68
Trademark Don’ts—Official Marks
AVOID trademarks which include
–official marks of any sort
–heraldic, national, territorial or armorial
arms, crests, flags, emblems, etc.
–anything suggestive of any royal, vice-
regal or governmental patronage or
approval
HER MAJESTY’S MUFFLER SHOPPE
© Blake R. Wiggs 2005 69
Term of Protection
• CA trademark registrations last 15 years
(US registrations last 10 years)
• counting from date of registration
• renewable for further 15 year terms, in
perpetuity (US renewal term is 10 years)
© Blake R. Wiggs 2005 70
“Use” Matters
• first user generally entitled to register and obtain
exclusivity
• exclusivity usually confined to particular wares or
services
• exclusivity prevents others from using confusing
trademarks or trade names (need not be identical to
have infringement)
• use it or lose it (unused trademarks are vulnerable to
cancellation and may be unenforceable)
© Blake R. Wiggs 2005 71


COMPUTER LAW
COMPUTER LAW


Maria T. Holman
Maria T. Holman
“ “Business Law for the Digital Age Business Law for the Digital Age” ”
Lindsay Kenney LLP Lindsay Kenney LLP
Barristers & Solicitors Barristers & Solicitors
1800 1800 – – 401 West Georgia Street 401 West Georgia Street
Vancouver, B.C. V6B 5A1 Vancouver, B.C. V6B 5A1
© ©Maria T. Holman 2004 Maria T. Holman 2004
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Topics for Discussion
Topics for Discussion


What is Computer Law?
What is Computer Law?


Legal aspects of:
Legal aspects of:
1.
1.
Manufacture and Programming
Manufacture and Programming
2.
2.
Acquisition
Acquisition
3.
3.
Maintenance
Maintenance
4.
4.
Use
Use
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Computer Law
Computer Law


Areas of Law:
Areas of Law:
1.
1.
Contract
Contract
2.
2.
Intellectual Property
Intellectual Property
3.
3.
Tort Law (Products Liability, Personal Injury)
Tort Law (Products Liability, Personal Injury)
4.
4.
Insurance Law
Insurance Law
5.
5.
Taxation
Taxation
6.
6.
International and Conflicts law
International and Conflicts law
7.
7.
Privacy Law
Privacy Law
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Computer Law
Computer Law


Areas of Law we will touch upon:
Areas of Law we will touch upon:
1.
1.
Contract
Contract
2.
2.
Intellectual Property
Intellectual Property
3.
3.
Privacy Law
Privacy Law
CONTRACT LAW
CONTRACT LAW
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Computers and Contract Law
Computers and Contract Law


Manufacture of Hardware
Manufacture of Hardware


Development of Software
Development of Software


Hardware and Software Support
Hardware and Software Support


Web Site design and hosting
Web Site design and hosting


Licensing of intellectual property
Licensing of intellectual property


Patents
Patents


Trade
Trade
-
-
mark
mark


Copyright
Copyright
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Computers and Contract Law
Computers and Contract Law


A Contract is a (written) agreement
A Contract is a (written) agreement


Between two or more parties
Between two or more parties


Whereby each party promises to perform
Whereby each party promises to perform


Must be a
Must be a


meeting of the minds
meeting of the minds




Parties must be agreeing to the same thing
Parties must be agreeing to the same thing


Offer and acceptance
Offer and acceptance


Consideration
Consideration
(c) Maria T Holman 2005 (c) Maria T Holman 2005
E
E
-
-
Commerce
Commerce


New application of old principles
New application of old principles


Issues in e
Issues in e
-
-
commerce:
commerce:
1.
1.
Nothing in writing
Nothing in writing
2.
2.
Parties never meet
Parties never meet
3.
3.
Distance (unknown locations of buyer and
Distance (unknown locations of buyer and
seller)
seller)
4.
4.
Conflicts of Laws
Conflicts of Laws
5.
5.
Proof of contract
Proof of contract
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Online Contracts
Online Contracts


Problems:
Problems:


When is a contact formed?
When is a contact formed?


Can a series of emails form a contract?
Can a series of emails form a contract?


Offer and Acceptance: when is an offer
Offer and Acceptance: when is an offer
accepted and not just a counter
accepted and not just a counter
-
-
offer?
offer?


Until when may an acceptance be revoked?
Until when may an acceptance be revoked?


Mail
Mail
-
-
box rule
box rule


When is an offer accepted? when sent? or when
When is an offer accepted? when sent? or when
received? Electronic acceptance may or may not be
received? Electronic acceptance may or may not be
instantaneous.
instantaneous.
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Online Contracts: Terms
Online Contracts: Terms


Battle of the Forms
Battle of the Forms


Each party uses its own purchase order form;
Each party uses its own purchase order form;
different provisions; whose wins?
different provisions; whose wins?




Last Shot
Last Shot


rule
rule


Does the party who sends the last message
Does the party who sends the last message
win?
win?
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Contracts Online: Variations
Contracts Online: Variations
1.
1.
Shrink Wrap
Shrink Wrap
2.
2.


Browse Wrap
Browse Wrap


3.
3.


Click Wrap
Click Wrap


or Click
or Click
-
-
consent
consent
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Shrink Wrap
Shrink Wrap


Off
Off
-
-
the
the
-
-
shelf software: if you open the
shelf software: if you open the
package (i.e., break the shrink wrap) you
package (i.e., break the shrink wrap) you
are deemed to agree to the contract
are deemed to agree to the contract


Binding provided the contract is brought
Binding provided the contract is brought
to the attention of the buyer
to the attention of the buyer


No possibility to negotiate
No possibility to negotiate
(c) Maria T Holman 2005 (c) Maria T Holman 2005


Browse Wrap
Browse Wrap




The user is
The user is


deemed
deemed


to agree to the
to agree to the
Terms and Conditions section on the site
Terms and Conditions section on the site
just by using the site or by downloading
just by using the site or by downloading
the software.
the software.


No positive action is needed by the user.
No positive action is needed by the user.


Not an acceptable method, unless it is
Not an acceptable method, unless it is
made
made
very clear
very clear
to the user that the site
to the user that the site
owner intends that a contract is formed.
owner intends that a contract is formed.
(c) Maria T Holman 2005 (c) Maria T Holman 2005


Browse Wrap
Browse Wrap




The more onerous the terms are, (i.e.,
The more onerous the terms are, (i.e.,
favourable to the web site owner), the
favourable to the web site owner), the
more notice the site user should have of
more notice the site user should have of
the contract and that a binding agreement
the contract and that a binding agreement
is being entered into
is being entered into


Again, no possibility for negotiation
Again, no possibility for negotiation
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Netscape and AOL Case
Netscape and AOL Case




Promises become binding when there is a
Promises become binding when there is a
meeting of the minds and consideration is
meeting of the minds and consideration is
exchanged. Assent may be registered by
exchanged. Assent may be registered by
a signature, a handshake, or a click of
a signature, a handshake, or a click of
computer mouse transmitted across the
computer mouse transmitted across the
invisible ether of the Internet. Formality is
invisible ether of the Internet. Formality is
not a requisite
not a requisite
…”
…”


But something more than just the act of
But something more than just the act of
downloading the software was needed
downloading the software was needed
(c) Maria T Holman 2005 (c) Maria T Holman 2005


Click Wrap
Click Wrap




Click Wrap, better called
Click Wrap, better called


Click Consent
Click Consent


,
,
forces the user to agree before the
forces the user to agree before the
product is delivered.
product is delivered.


Microsoft uses this, as do many others.
Microsoft uses this, as do many others.


This method has been held to create a
This method has been held to create a
binding agreement in the court in Ontario
binding agreement in the court in Ontario
in
in
Rudder v. Microsoft
Rudder v. Microsoft
(1999)
(1999)


No negotiation: unilaterally imposed
No negotiation: unilaterally imposed
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Online Contracts
Online Contracts


To ensure the Contract will be binding:
To ensure the Contract will be binding:
1.
1.
The terms and conditions should be
The terms and conditions should be
accessible from all parts of the site
accessible from all parts of the site
2.
2.
The links should be easy to find
The links should be easy to find
3.
3.
The terms and conditions page should be
The terms and conditions page should be
easy to print, without cutting off any part of
easy to print, without cutting off any part of
the contract
the contract
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Online Contracts
Online Contracts


There is both federal and provincial
There is both federal and provincial
legislation making electronic documents
legislation making electronic documents
legal
legal


Do not deal with consumer contracts
Do not deal with consumer contracts


Credit arrangements must be in
Credit arrangements must be in


writing
writing




Not clear if online contracts satisfy this
Not clear if online contracts satisfy this


So are online purchase contracts valid?
So are online purchase contracts valid?
Intellectual Property
Intellectual Property
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Intellectual Property Online
Intellectual Property Online


Mainly involves copyright
Mainly involves copyright


Canadian copyright law says only the
Canadian copyright law says only the
author has the right to reproduce his or
author has the right to reproduce his or
her work
her work


Difficult to enforce
Difficult to enforce


US law has specific prohibitions against
US law has specific prohibitions against
file sharing
file sharing
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Copyright Online
Copyright Online


Canada does not have a prohibition on
Canada does not have a prohibition on


making available
making available




This is what saved the file
This is what saved the file
-
-
sharers in the
sharers in the
BMG Canada v. Doe case
BMG Canada v. Doe case
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Copyright Online
Copyright Online


CCH v. Law Society of Upper Canada case:
CCH v. Law Society of Upper Canada case:


CCH owns copyright in court case reports
CCH owns copyright in court case reports


Lawyers copy cases for use in court
Lawyers copy cases for use in court


Ok under exception for personal use
Ok under exception for personal use


CCH sued LSUC which operates libraries
CCH sued LSUC which operates libraries


Court libraries have photocopiers
Court libraries have photocopiers
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Copyright Online
Copyright Online


CCH said LSUC was liable for copyright
CCH said LSUC was liable for copyright
infringement by making it possible to copy
infringement by making it possible to copy
the reports
the reports


The court disagreed with CCH and said
The court disagreed with CCH and said
that all LSUC was doing was
that all LSUC was doing was


making
making
available
available


the means to copy; this is not
the means to copy; this is not
yet illegal in Canada
yet illegal in Canada
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Copyright Online
Copyright Online


BMG Canada v. Doe
BMG Canada v. Doe


Music recording industry in Canada tried to
Music recording industry in Canada tried to
sue a group of file sharers
sue a group of file sharers


J udge ruled against them for several reasons
J udge ruled against them for several reasons


Poorly prepared case
Poorly prepared case


Not enough evidence as to who the
Not enough evidence as to who the
defendants should be
defendants should be


ISPs not required to give up names
ISPs not required to give up names
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Copyright Online
Copyright Online


Most important aspect was the lack of a law in
Most important aspect was the lack of a law in
Canada against
Canada against


making available
making available




It is not illegal to put copyrighted materials
It is not illegal to put copyrighted materials
(which you have a right to use) somewhere
(which you have a right to use) somewhere
where someone else can illegally copy them.
where someone else can illegally copy them.


Near a photocopier
Near a photocopier


On a publicly accessible hard
On a publicly accessible hard
-
-
drive
drive


The infringer is the copier, not the person
The infringer is the copier, not the person
offering the material.
offering the material.
Privacy
Privacy
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Privacy
Privacy


Relates to both online and offline
Relates to both online and offline
information
information


Computers are where most information is
Computers are where most information is
stored
stored


Vulnerable to improper access or
Vulnerable to improper access or
disclosure
disclosure


Hackers, theft, phishing, carelessness
Hackers, theft, phishing, carelessness
(c) Maria T Holman 2005 (c) Maria T Holman 2005
PrivacyLaws
FEDERAL PROVINCIAL
PUBLIC
Federal P.A
PRIVATE
P.I.P.E.D.A.
PUBLIC
F.O.I.P.O.P.
PRIVATE
P.I.P.A. (BC)
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Privacy
Privacy


Similar requirements under all laws
Similar requirements under all laws


10 basic principles of privacy
10 basic principles of privacy


Most Important:
Most Important:


No collection, use, or disclosure without
No collection, use, or disclosure without
consent
consent


Must safeguard the information
Must safeguard the information


Right of access by the individual
Right of access by the individual
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Privacy Law
Privacy Law


NOTE:
NOTE:


There are two different types of Privacy
There are two different types of Privacy
law:
law:
Those relating to right to privacy
Those relating to right to privacy
Those relating to rights of access
Those relating to rights of access
(c) Maria T Holman 2005 (c) Maria T Holman 2005
Internet Privacy
Internet Privacy


BMG Canada v. Doe (2004) FCTD (file
BMG Canada v. Doe (2004) FCTD (file
sharing case) partly upheld on appeal
sharing case) partly upheld on appeal


ISPs protect the identity of their users
ISPs protect the identity of their users


IP address will not be disclosed by ISP,
IP address will not be disclosed by ISP,
unless message defames or libels another
unless message defames or libels another


Court may order disclosure
Court may order disclosure
The End
The End
Maria T. Holman
Maria T. Holman
“ “Business Law for the Digital Age Business Law for the Digital Age” ”
Lindsay Kenney LLP Lindsay Kenney LLP
Barristers & Solicitors Barristers & Solicitors
1800 1800 – – 401 West Georgia Street 401 West Georgia Street
Vancouver, B.C. V6B 5A1 Vancouver, B.C. V6B 5A1
(604) 484 (604) 484- -3080 3080
© ©Maria T. Holman 2005 Maria T. Holman 2005
The Law on Product Liability
A Primer
Presented to Applied Science 450
University of British Columbia
October 18, 2005
Scott Kerwin
Borden Ladner Gervais LLP
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VAN01: 2067274: 01
2
Introduction
product liability is based on two sources
– the law of contract
– the law of torts
usual defendants
– manufacturer (including the party that designed the product, theparty that
assembled it, etc.)
– distributor
– installer
– repairer
– suppliers of component parts
– government regulators
3
Typical Claims
negligent design
negligent manufacture / assembly
failure to properly inspect the product prior to it being put on
the market
failure to adequately warn of reasonably foreseeable dangers
associated with a product
the introduction of a new product to the market without
conducting reasonable testing
product did not conform to descriptions or representations
made by the seller or manufacturer
4
Liability in Contract
some product liability claims are framed as a “breach of contract”
case
claim based upon the terms of the sales contract, or legislation
such as the Sale of Goods Actand the Competition Act
no such thing as caveat emptor
a tactical decision
– as long as a contractual relationship existed, it is easier to succeed
in this claim
• no need to prove that the product was “defective”
• you only need to show that it did not conform to its description
– generally not suitable for cases involving personal injury or property
damages
5
Liability in Contract
basic components of a contract
– an agreement between two or more parties
– certainty of terms (express or implied)
– a “meeting of the minds” (consensus ad idem)
– consideration
– intention to create legal relations
only parties to the contract may sue to enforce its terms (“privity
of contract”)
6
Damages for breach of contract
an award of money to put the plaintiff in the position that it would
have been had the contract been performed
in rare cases, the Court may order “specific performance” of the
contract (e.g. ordering a party to finalize a contract for sale of a
house)
7
Liability in Contract
“privityof contract” doctrine limits the use of contractual remedies
in product liability cases
consumer and the retailer were parties to a sales contract
– express and implied terms
consumer protection legislation and the Sales of Goods Actalso
provides remedies against the retailer
Sales of Goods Act implies a condition into each sales contract
that the product be fit for the purpose sold and that the product
be of merchantable quality.
8
Liability in Contract
consumer of a product unlikely to have a “contract” with
manufacturer, distributors, the supplier of component parts, etc.
– e.g. Mrs. Donoghueand the manufacturer of the ginger beer
representations made by a manufacturer in its promotional
materials can give rise to a claim in contract (could be a
“collateral warranty” that induced the user to buy the product)
retailers, distributors, etc., may also seek indemnity against the
manufacturer if they are sued in contract by the consumer / user
9
Example: Apple iPod
example: recent claim against Apple Computers Inc. due to
problems associated with the battery installed in the Apple iPod
the claim was based in contract since the product did not
conform to the representations made by Apple in its promotional
materials and on its website
class action recently settled in California
class action recently commenced in Ontario based upon Sales of
Goods Actand Competition Act
10
Common Defences
no breach of contract (e.g. the product conformed to its
description, was of merchantable quality, etc.)
plaintiff did not suffer any damages
contractual exclusions (these can be difficult to enforce)
limitation period
defendants will also point the finger at other parties (such as the
supplier of component parts, or the repairer) and seek indemnity
from them
note: burden of proof is always on the plaintiff
11
Negligence: Basic Test
Duty of Care
– are the parties are in a relationship of sufficient proximity so
that, in the reasonable contemplation of the defendant,
carelessness on its part might cause damage to the plaintiff?
– any considerations that ought to negate or limit the scope of
that duty? [e.g. government agencies are often exempt from
a duty of care in situations which arise from pure policy
decisions]
Standard of Care
– whether the defendant acted reasonably in the circumstances
12
Negligence: Basic Test
Causation
– is there a causal link between the defendant’s breach of the
“standard of care” and the injuries or harm suffered by the
plaintiff?
– are such damages too “remote”?
– note: “causation” in the legal sense can be much different
than causation in the scientific sense
13
Common Defences
no duty of care
no damages suffered
statutory compliance
used “state of the art”
techniques
intervening causes (e.g.
negligent repair by a mechanic)
contributory negligence - the
plaintiff was partially
responsible for the accident
“assumption of risk” –the
plaintiff knew all of the risks
involved, and chose to
undertake the activity (a
complete defence to the claim)
misuse of product
a “learned intermediary” failed
in its duty to warn the ultimate
consumer / user of the products
of all risks (e.g. doctors that
performed breast implant
surgery)
limitation period
14
No “Accident Proof”Products
cases involving negligent design or manufacture generally turn
on the “standard of care” step
manufacturers are not “insurers”
no standard of perfection is required
In Stiles v. Honda, the current Chief Justice of British Columbia
made the following statement regarding the duties of a
manufacturer:
“…the law does not require a manufacturer to produce
articles which are accident proof, or incapable of doing harm.
The manufacturer is not an ‘insurer’ of anyone who suffers
injury while using, or misusing, the product”
[Stiles v. Honda(1993), 22 C.P.C. (3d) 145 (B.C.S.C.) perFinch J.]
15
Negligent Manufacture
plaintiff claims that the product was “defective” due to problems in
the production or manufacturing process
a manufacturer of a product owes a duty to users of the product to
take reasonable care to ensure that the product is reasonably safe
for its foreseeable use
if the product is not manufactured in accordance with the
specifications that the manufacturer intended, it may be said tobe
defective
– i.e. poor quality control procedures
example: flaw in the manufacturing process leads to Coke bottles
exploding
16
Negligent Design
defect inherent to the product itself, not the production process
starting point: proof that the product was defective
– was the problem inherent in the design, rather than caused by the
manufacturing process?
if so, the Court will then consider whether the manufacturer /
designer met its “standard of care”
the standard depends on the nature of the product
– manufacturer subject to a much higher standard when dealing with
very dangerous goods or if the probability of injury is high
17
Negligent Design
is it an inherently unsafe product?
– hidden dangers?
– failure to prevent foreseeable injuries? (e.g. a car that is not
“crashworthy”)
was there an alternative design available that should have been
chosen?
– e.g. placing a guard to protect a worker from moving parts in a
machine
courts apply a “risk-utility analysis”
18
Risk-Utility Analysis
Factors considered by the Court
utility of the product
likelihood of harm if used as
intended
severity of harm
availability of an alternative
design
harms associated with the
alternative design
effects of the alternative
design on the product’s
function and cost
manufacturer’s ability to
spread any costs related to
improving the safety of the
design.
whether adequate testing
was performed
compliance with government
or industry standard
the ability of the plaintiff to
have avoided injury by
careful use of the product
19
Duty to Warn
manufacturers or distributors are under a duty to warn all potential
users of dangers attendant with the use of their products.
some warnings are required by statute
the higher the risk of harm, the stronger the required warning
no need to warn of “obvious” risks (e.g. knives are sharp)
users of products have a duty to read and heed warnings and
instructions supplied with a product or bear the consequences of
any resulting injuries
20
Duty to Warn
all warnings must be reasonably communicated
causal link? would the user of the product acted differently if they
had been warned?
“learned intermediary” may be responsible for communicating the
warning
a continuing duty
– post-sale warnings required if manufacturer learns of defects
– a product recall may be necessary
danger of “strict liability” being imposed by courts
21
Baker v. Suzuki Motor Co. - 1
one of the leading decisions in Canada on product liability
the case arose from a motor vehicle accident in Edmonton in 1986
in which the plaintiff Baker suffered catastrophic injuries
the claim against Suzuki was based upon negligent design of the
gas tank on its model of motorcycle
the plaintiff Baker alleged that the negligent design caused the
catastrophic injuries
the Alberta Court of Queen’s Bench found that Suzuki met its
“standard of care” and dismissed the case against it
Baker v. Suzuki Motor Company (1993), 17 C.C.L.T. (2d) 241, [1993] 8 W.W.R. 1 (Alta. Q.B.)
22
Baker v. Suzuki Motor Co. - 2
gasoline escaped from the tank during the collision
parties disagreed on the manner in which the gasoline
escaped
Baker alleged that the gas cap came off entirely
Suzuki admitted that the gas tank was designed so that gas
and vapour could escape in certain situations (extreme heat,
internal pressures)
Court: key question is whether an alternative design was
available that would have prevented the escape of gasoline in
this case
23
Baker v. Suzuki Motor Co. - 3
Baker alleged that the gas tank should have been installed
under the seat, rather than in front of the seat
Suzuki admitted that the design that it used would lead to
serious fires in certain (rare) situations
a “trade-off” –an alternate design with the gas tank located
under the seat would have caused more frequent injuries
(perhaps just as severe)
99% of other motorcycles on the market had the same design
Court agrees with Suzuki
24
Baker v. Suzuki Motor Co. - 4
Baker also argued that the design of the gas cap was
negligent, and that it should not have come off during the
accident
Suzuki argued that venting and relief capacity necessary so
that gas tanks would not explode in situations of heat or
internal pressures
Court: plaintiff unable to show that Suzuki could have
designed a gas cap that would not have broken in this case
AND eliminated the risks that this design was meant to prevent
fact that a better gas cap was eventually designed in the
1980s not determinative
25
Baker v. Suzuki Motor Co. - 5
Court also rejects arguments about the shape of the gas tank
Court rejects arguments that the gas tank should have been
designed so people could not fill the tank to capacity
no evidence that Suzuki had actual knowledge of design
errors, or that it ignored readily available safety features
claim based on negligent design therefore dismissed
26
Baker v. Suzuki Motor Co. - 6
Court also found that the “duty to warn” not breached
Baker claimed that Suzuki should have issued warning that
risk of fire would be reduced if gas tank less than 75%
capacity
no evidence that Mr. Baker would have declined to ride the
motorcycle if he had been warned about this
no evidence that Mr. Baker would have acted any differently if
the warning had been issued
27
Conclusion
THE END
THANK YOU
1
APPLIED SCIENCE 450
Professional Engineering Practice
Introduction to Ethics
W. Scott Dunbar
2
Morality and Ethics
Morality:
An effort to guide one’s conduct by reason -
to act based on principles that are rational
Ethics:
A framework for the study of moral dilemmas
using principles known as ethical norms
Some would say that morality and ethics are the same. However, it is useful to
make some distinctions. See following slides.
3
Professional ethics
Ethical standards used to guide conduct of
professionals when practicing their profession.
Reasonable to assume that
Professional ethics ∈ Ethics
Confusion arises:
Conduct of a professional is usually either
ethical or unethical, not moral or amoral
The reason for this is that moral or amoral conduct can be confused with one’s
individual morality, something personal and private.
4
Individual Morality
What you were taught by your parents, religion,
and culture.
But if ethics is to provide a universal standard
Culture/religion/upbringing ∉ Ethical norms
Reasonable to assume that
Individual morality ∈ Ethics
5
A reasonable question
If
Professional ethics ∈ Ethics
and
Individual morality ∈ Ethics
does professional ethics have anything to do with
individual morality?
6
Ethics, Professional Ethics & Individual
Morality
ETHICS
Ethical norms
Professional
Ethics
Individual
morality
Possible
interaction
Culture,
religion,
upbringing
This distinction and separation between professional ethics and individual morality
is important since it can be used to illustrate the situations in which professional
ethics applies and where it does not or cannot.
Possible interaction between professional ethics and individual morality. For
example, suppose your individual morality makes you uncomfortable with working
on matters related to national defence or with the development of processes
involving genetic engineering. A professional code of ethics cannot help you
determine the best course of action in such a situation. But if you do decide to do
the work, you must do it according to the standards set by the code of ethics.
A more difficult example is whether you should tell your boss that your work
colleague (and close friend) has embezzled money from the company. This might
be easy (or easier) for a lawyer who is legally and ethically bound to ensure that the
law is upheld. However, for most people, the situation is this: embezzlement is in
conflict with individual morality but there is this nagging issue of what effect
disclosure of the crime could have on your friend.
7
The Golden Rule
Do to others as you would have them do Do to others as you would have them do
to you to you
New Testament
Matthew 7:12, Luke 6:31
Treat others as you want to be treated
8
A Universal Concept:
• Buddhism: "...a state that is not pleasing or
delightful to me, how could I inflict that upon
another?" Samyutta NIkaya v. 353
• Islam: "None of you [truly] believes until he wishes for
his brother what he wishes for himself." Number 13 of
Imam "Al-Nawawi's Forty Hadiths."
• Judaism: "What is hateful to you, do not to your fellow
man. This is the law: all the rest is commentary."
Talmud, Shabbat 31a.
• Yoruba: (Nigeria): "One going to take a pointed stick to
pinch a baby bird should first try it on himself to feel
how it hurts."
9
Great idea, but …
What if you are one of those who likes to have
others use pointed sticks to inflict pain on you?
The Golden Rule does not tell us what to do;
an ethical norm is necessary to know what to do
The Golden Rule is a consistency principle
10
Ethical Norms
• Consequences matter (teleological)
– ethical egoism
– utilitarianism
• Duties matter (deontological)
– rule-based ethics
• Virtue matters
– What character traits make one a good person?
11
Ethical egoism
Everyone ought always to do those acts that will
best serve his or her own best self-interest.
12
Ethical egoism over time
Individual self-interest in a competitive marketplace
produces a state of optimal goodness.
Adam Smith, The Wealth of Nations, 1776
The achievement of his own happiness is man’s highest
moral purpose.
Ayn Rand, The Virtue of Selfishness, 1964
If it feels good, do it.
Slogan, Flower Power Movement, 1965-1975
13
But can this apply to everyone?
Can you be friends with someone who you agree
can also act in their own self-interest, perhaps
against you?
It is self-defeating to publicize the fact that you
are an ethical egoist - how do you expect people
to act if they know this?
How could an engineer or any professional serve
society if he/she were a professed ethical egoist?
Inconsistent concept, can’t be universal
14
Unrestricted Utilitarianism
Actions that produce the greatest benefit (or
utility, or happiness) for the greatest number of
people are morally correct
Jeremy Bentham
1748-1832
“Hedonic calculus”:
An algorithm to estimate the moral
status of any action by estimating the
amount of happiness in the action
Benthamalso suggested a procedure to mechanically estimate the moral status of
any action, which he called the hedonic or felicific calculus. It took into account such
factors as:
The intensity of the pleasure or pain.
The duration of the pleasure or pain.
The certainty or uncertainty of the pleasure or pain.
The remoteness of any pleasure or pain. (Propinquity)
The chances of the same effects being repeated. (Fecundity)
The chances of the same effects not being repeated. (Purity)
The number of people who will be affected by any pleasure or pain arising as
a result of the action(s) in question.
15
Restricted utilitarianism
Choose rules or practices that will tend to
produce the greatest benefit for the greatest
number
John Stuart Mill
1806-1873
If such rules were generally accepted,
then there will result the greatest
benefit for the greatest number
Relies on principle of induction
16
But there are problems
• What actions or practices should be considered?
• How big a group is “the greatest number of people”?
• How to measure benefits and “dis-benefits”
• Benefits may come at the expense of the rights of
individuals. Injustice is possible.
• Two actions with equal benefits are ethically
equivalent – which to select?
17
Rule-based Ethics
• Moral actions are not exclusively a function of
consequences
• Moral actions must be based on rules
Immanuel Kant
1724-1804
For example
“Never lie”
No exceptions, even if the murder of an
innocent person could be prevented
Some would say that consequences have no relevance to the moral evaluation of
actions
18
Kant and Rule-based Ethics
Rules for moral conduct are absolute and
• must be derived from rational thought,
independent of consequences and experience
• must be universal and consistent – apply to
everyone and to all similar cases
Consider the proposed rule: “Lie if it benefits you”
Should this be a universal moral rule?
If everyone lied, no one would believe anyone and the possibility of lying would
disappear
⇒Inconsistent rule, not rational, self-defeating
⇒can’t be universal
Suppose you find a wallet on the street. As a utilitarian, you might want to give the
money to a homeless person – spread the wealth, do the most good.
But rule-based ethics would say:
A rational person would return the wallet because it is the right thing to do, no
matter what the consequences. One would always want someone else to do
the same thing. If lost wallets were not returned by others, the world would
be a chaotic place.
19
Categorical vs Hypothetical Rules
Hypothetical rules have conditions attached:
Tell the truth only if it benefits many people
Categorical rules have no such conditions:
Tell the truth
Kant said we have a duty to do the categorical
Motives and intentions must be derived from
categorical rules
Richard Taylor doesn’t think it’s possible to be Kantian
If I were ever to find, as I luckily never have, a man who assured me that he
really believed Kant’s metaphysical morals, and that he modeled his own
conduct and his relations with others after those principles, then my
incredulity and distrust of him as a human being could not be greater than if
he told me he regularly drowned children just to see them squirm.
Taylor, R., 1970. Good and Evil. Macmillan, p. xii
20
Some Categorical Rules
• Always tell the truth
• Do not harm people
• Never use a person as a means to an end
Each rational – not self-defeating
But these rules may conflict:
“Always tell the truth”
“Do not harm people”
What if telling the truth will harm someone?
Either
•One of these rules is not categorical or,
•Rule violation is possible if one accepts that others may do the same at any
time.
21
Virtue Ethics
“What character traits make one a good person?”
[As opposed to “What is the right thing to do?”]
Some virtuous traits:
Courage, Honesty, Generosity, Kindness, Self-control
Aristotle
384-322 BC
Socrates
469-399 BC
Plato
427-347 BC
student of
Virtuous exemplars are useful. Some virtuous engineers:
Fred Cuny: 1944-1995
Attended Texas A&M University, studied engineering, never graduated. Became
interested in disaster relief. A maverick, always challenged methods of existing aid
relief agencies 1971: Founded Intertect, a crisis management firm, that used
engineering talent to assist in national disasters. Experience all over the world
Bosnia 1995: Missing and presumed murdered. See
http://www.pbs.org/wgbh/pages/frontline/shows/cuny/
Ben Linder
Mechanical engineer, U of Washington 1983. Volunteered with Nicaraguan
Appropriate Technology Project. In 1984 he became lead engineer of a small-scale
hydro development (100 kW) in mountains of northern Nicaragua. Plant in operation
May 1986 April 28, 1987, Ben, two assistants, escort of four militia ambushed by
contras. One assistant, one militia, and Ben Linder were killed.
Ron Yaworsky
Graduated PhD Civil Engineering UBC 1994. Volunteer work in Western Sudan
dealing with village water supply, maintenance of equipment, public health,
sanitation Works extensively with First Nations on project management, community
development, training Active on UBC Senate Founded scholarship for First Nations
engineering students
22
Problems of Virtue Ethics
• Are the virtues the same for everyone?
• No principles for determining the goodness or
badness of an act
• Incompleteness:
Consider two acts A and B
Dishonest but kind to do A
Honest but unkind to do B
What virtue takes precedence?
23
If you are an axe murderer
• Ethical egoism: If it feels good …
• Mill: Resisting your urges yields more happiness
• Kant: Resisting your urges is rational
• The virtuous: Self-control is virtuous (but it
may not be enough)
24
The Bystander Problem
You are casually walking by a rail track when you see a
driverless trolley heading toward five people who cannot
escape in time
A drunk is sleeping on the siding
Would you pull the lever and divert the trolley?
Trolley problems like these are used as models for a number of moral dilemmas:
You are a doctor in a war-ravaged country. You have five patients, each of whom is
about to die due to a failing organ of some kind. You have another patient with
healthy organs, but who is on life support due to brain damage.
Is it appropriate for you to remove the life support from the man so that he will die
and you can transplant five of his organs into the bodies of the other five patients?
--------------------------------------------------------------------------------------------------------
Enemy soldiers have taken over your village. They have orders to kill all remaining
civilians. You and some of your townspeople have sought refuge in the cellar of a
large house. Outside you hear the voices of soldiers who have come to search the
house for valuables.
Your baby begins to cry loudly. You cover his mouth to block the sound. If you
remove your hand from his mouth his crying will summon the attention of the
soldiers who will kill you, your child, and the others hiding out in the cellar. To save
yourself and the others you must smother your child to death.
Is it appropriate for you to smother your child in order to save yourself and the other
townspeople?
25
The Fat Man on the bridge problem
you
a very large
man
Should you push the large man off the bridge
to stop the trolley and save the five people?
26
What to do?
• A utilitarian would say there is no
difference between these two dilemmas
– would pull the lever and push the fat man off
• A Kantian would follow the rule “Never
use another person as a means to an end”
and also see no difference
– would do nothing in either case
27
Survey – Bystander/Fat Man Dilemmas
Questionnaire under Surveys link on course
Homepage
Few simple questions about what you would do if
confronted with these two dilemmas
Results will be shown in lecture on November 1
28
Not just a thought experiment
29
Friday, June 20, 2003, 12:01 pm
COMMERCE, California (CNN) -- A runaway freight train
carrying lumber through Southern California derailed after
being switched to a side track Friday in suburban
Commerce, which sent its cargo crashing into three homes
and left 13 people injured, …
A Union Pacific spokeswoman said eighteen cars broke
loose during a switching operation and rolled 27 miles
before railroad officials switched the cars to side tracks
to stop them from reaching heavily populated downtown
Los Angeles.
30
Utilitarianism applied to Commerce, Ca
31
Union Pacific spokesperson
“UP knew the maneuver was likely to cause a
derailment, but it would have been more dangerous
to allow the train to continue moving into central Los
Angeles.”
“... they did this [because] the train was headed to
the more populated area of Los Angeles, where there
are possibly commuter trains and more population.”
32
Massive landslide in mine in
SE Asia
Seven bodies buried in this
slide
Choices:
Should these bodies be
recovered?
Dangerous – could jeopardize
lives
Requires shutting down mine
– 100s of people out of work
33
Coventry, England, Nov 14, 1940
Choices:
• Warn citizens of Coventry and reveal
that Ultra is compromised
• Let Coventry be bombed and protect
the source of intelligence
Ultra: coded messages of German Luftwafte
Code broken by British ⇒ discovered raid on
Coventry planned for Nov 14
34
Construction in the Third World
• As project manager you make payments to local
army to guard construction facilities
• Suspicion: payments wind up in the bank
accounts of a few generals
⇒Stop payments
• Later two foreign teachers at a local school are
shot
– could be work of local insurgents, but … ??
35
See “Jillian’s choice” under Articles of Interest
36
Nature of Ethical Issues
• Always involve choices
• Unstructured
• Often loaded with uncertainty
• Involve human emotions and foibles
• A range of solutions may be possible
May seem unfamiliar and intimidating but
engineering itself is often like this
37
Ethical Issues for Engineers -
usually not life and death
• Public welfare, health and safety
• Fairness to other engineers
• Duties to employers and clients
– Confidentiality
– Conflicts of interest
• Fair compensation
• Whistle-blowing
• Bribery and fraud
38
Aswan High Dam, Egypt
Lake Nassar
39
Utilitarian Accounting
Aswan High Dam
Benefits
• Hydropower
• Irrigation
• Farm land
• Fishing industry in Lake
Nassar
lots of good happy stuff
Costs
• Foreseen:
– Large construction costs
– Relocation of 80,000
people
• Unforeseen
– No deposition of fertile
soil downstream of dam
– Silt accumulates behind
dam
– Irrigation ditches a habitat
for Bulinus snail, a host for
the bilharzia parasite that
burrows into the human
body
No deposition of fertile soil downstream of dam –farmers must now use fertilizer to
grow crops ($$)
An agricultural system in existence for millennia was destroyed.
No annual floods to flush out salts – soil salinity problems
Silt accumulates behind dam reducing reservoir volume and hydropower potential
Irrigation ditches a perfect habitat for Bulinus snail, a host for the bilharzia parasite
that burrows into the human body ⇒increased medical costs
40
This could happen to you
You live in Vancouver and are invited to
two job interviews, one in Toronto and
another in nearby Burlington, Ontario.
Both companies allow you to claim
expenses for the trip but you don’t want
one company to know you are interviewing
the other.
What should you do and why?
For this problem and the following problems, as yourself whether the code of ethics
applies or do other norms apply.
41
Committee Work
Your company manufactures specialized
machinery. You have been asked to sit on a
committee that sets performance and safety
specifications for this type of machinery. Other
members of the committee include
manufacturers and users of the machinery.
Should a representative of a manufacturer work
on this committee?
42
More committee work
The committee has recommended a revision of
the specifications for particular models of the
machinery. This revision will require specialized
manufacturing which can only be done by your
company and one other company that is not
represented on the committee.
Should you inform the committee that only your
company and the other company may benefit
from the revision?
43
Hmmm…
You are a registered electrical engineer. An
unregistered but qualified electrical engineer
offers you a fee to review his design of a control
system for electrical power in a private hospital
and to seal the plans once you have reviewed
them.
What should you do?
44
Mall Rats
Janice, a civil engineer, has a contract with a
development company to do a preliminary study
for a new shopping mall in a medium-sized town.
The town already has a mall that is 20 years old.
The owner of the existing mall is trying to decide
whether to renovate the old mall or shut it down.
He has done a lot of business with Janice and asks
her some questions about the new mall.
Should Janice answer the questions?
45
A Dilemma
You discover that a work colleague (and a close
friend) has managed to embezzle a large sum of
money from the company. He has denied it but
you have enough evidence to know he is lying.
If you report him, he will be fired, possibly go to
jail, and his life and job prospects will be ruined.
If you don’t report him, the embezzlement will
likely continue, the company could go bankrupt,
and you will be out of a job.
How would you handle such a situation?
46
Whistle while you work
Wesley, a software engineer, is project manager
for the upgrade of a computer system used by the
Ministry of Justice to keep track of court cases.
The system is also used by police departments for
record-keeping.
He discovers that the upgrades to the system
could overload the portion of the system used by
the police departments. This could have safety
implications.
47
Blow and blow again
Wesley reports this to his superiors and suggests
a study be done. His recommendation is
rejected.
He then describes the problem to another
experienced software engineer who agrees with
his concerns.
Wesley then writes a memo to his superiors,
describing the problem in detail and informing
them that the other engineer agreed with his
concerns. He again recommends a study, but this
is rejected.
48
Whistle right down the road
Frustrated, Wesley then writes to the Deputy
Minister of Justice describing the problem and the
urgency of doing something about it.
In doing so, he violated direct orders that all
communications with the Ministry be approved by
his superiors in advance. Wesley is fired for
insubordination.
Did he do the right thing?
What could he have done differently?
49
ARE YOU ETHICAL?
CAN YOU ALWAYS BE ETHICAL?
REALLY?
1
APPLIED SCIENCE 450
Professional Engineering Practice
Why do the professions need a code
of ethics?
W. Scott Dunbar
2
Outline
• Why do we need codes of ethics?
• Why should we follow a code of ethics?
• Dilemma of self-interest versus
cooperation
• Analogies with other social dilemmas
3
Why a code of ethics?
“Most engineers are good people. I am an
engineer and I am also a very good person, never
been in any trouble. Why should the Association
tell me how to behave?”
“Codes of ethics are just common sense. It really
is a waste of time to go over them. Not only that,
it’s boring.”
4
Ethics, Professional Ethics or Individual
Morality – Which is it?
ETHICS
Ethical norms
Professional
Ethics
Individual
morality
Possible
interaction
Culture,
religion,
upbringing
This distinction and separation between professional ethics and individual
morality is important since it can be used to illustrate the situations in which
professional ethics applies and where it does not or cannot.
Possible interaction between professional ethics and individual morality. For
example, suppose your individual morality makes you uncomfortable with working
on matters related to national defence or with the development of processes
involving genetic engineering. A professional code of ethics cannot help you
determine the best course of action in such a situation. But if you do decide to do
the work, you must do it according to the standards set by the code of ethics.
A more difficult example is whether you should tell your boss that your work
colleague (and close friend) has embezzled money from the company. This might
be easy (or easier) for a lawyer who is legally and ethically bound to ensure that
the law is upheld. However, for most people, the situation is this: embezzlement
is in conflict with individual morality but there is this nagging issue of what effect
disclosure of the crime could have on your friend.
5
Application of Ethical Theories
• Which one?
• Inconsistencies make theories difficult to
apply in some cases
• Often result in different conclusions in
different situations
6
Committee Work
Your company manufactures specialized
machinery. You have been asked to sit on a
committee that sets performance and safety
specifications for this type of machinery. Other
members of the committee include
manufacturers and users of the machinery.
Should a representative of a manufacturer work
on this committee?
7
Apply ethical theories
Should a representative of a manufacturer work on this
committee?
Utilitarian:
Having such expertise on the committee yields the
maximum benefit
Kant: (self-defeating argument)
Would manufacturers ultimately suffer if their
representatives worked on standards committees?
Probably not
8
More committee work
The committee has recommended a revision of
the specifications for particular models of the
machinery. This revision will require specialized
manufacturing which can only be done by your
company and one other company that is not
represented on the committee.
Should you inform the committee that only your
company and the other company may benefit
from the revision?
9
Apply ethical theories
Should you inform the committee that only your company
and the other company may benefit from the revision?
Utilitarian:
Yes. Less utility (limited to two manufacturers) by not
telling
Kant:
Potentially self-defeating to not inform because it will
be known that you could have influenced the decision
Virtue:
Highly virtuous to inform the committee
10
Item 4 of the APEGBC code of ethics
[Professional Engineers and Geoscientists shall:]
Act as faithful agents of their clients or employers,
maintain confidentiality and avoid conflicts of interest
but, where such conflict arises, fully disclose the
circumstances without delay to the employer or client.
See
http://www.apeg.bc.ca/library/actbylawscode.html
11
Hmmm …
You are a registered electrical engineer. An
unregistered but qualified electrical engineer offers
you a fee to review his design of a control system for
electrical power in a private hospital and to seal the
plans once you have reviewed them.
What are your responsibilities?
What actions should you take?
See
http://www.apeg.bc.ca/library/library/act/act.pdf
12
Apply ethical theories
Utilitarian:
If unregistered engineer fees < registered engineer fees
there is a net benefit to the client.
and Two heads > One head
So it’s OK ☺
Kant:
Should this be done by all engineers in all cases?
If that is self-defeating, it’s not OK
Hard to apply virtue ethics here. What virtue applies? Maybe honesty. No role
models
13
However, …
• The Engineering Act explicitly forbids this
unless the work has been supervised or
thoroughly reviewed by a registered
engineer. [Item 20(9)]
• Items 1, 3, 5, and 7 in the Code of Ethics
suggest that, at the least, this is not a
good idea.
Items in Code of Ethics
1 Hold paramount the safety, health and welfare of the public, the protection of
the environment and the promotion of health and safety within the workplace.
3 Provide an opinion on a professional subject only when it is founded upon
adequate knowledge and honest conviction.
5 Uphold the principles of appropriate and adequate compensation for the
performance of engineering and geoscience work.
7 Conduct themselves with fairness, courtesy and good faith with respect to
clients, colleagues and others; give credit where it is due; and accept, as well
as provide, honest and fair professional comments.
14
Risk Communication
You are the project manager for the design of a chemical
processing plant in a remote area. The local economy
depends on fishing and fish processing, but is expected to
grow as a result of the new plant.
One of your engineers discovers that in the event of
failure of a control valve, toxic fluids could be released
that would damage or destroy fish breeding habitat.
The risk of this happening is small.
Mitigation measures are available, but they are expensive
Should you explain the risk to the residents? How? When?
What kind of problem is this?
15
Forks in the road
Item 1 of all engineering codes of ethics:
“… hold public safety paramount”
But what are the safety risks to the public?
their livelihood, contamination in fish
“It is simply foolish to ignore risk on one’s own behalf,
but it is unethical to do so on behalf of others”
Unknown source
16
Limitations of a code of ethics
A code of ethics can only be applied to ethical
situations in professional practice.
A code of ethics is not a “recipe” for ethical
behavior.
What then is the use of a code of ethics?
Why should it be followed?
17
Reason #1 – Public Protection
The purpose of a code of ethics is to protect the
public from engineers who perform their
services in an unethical manner.
18
But …
enforcement of the code of ethics is difficult
since the terms are so vague.
Scoundrels exist in all professions (even in
engineering) and the legal system will likely catch
such people.
Why have a weak duplicate system?
There must be another reason.
19
Reason #2 – Contract with Society
A code of ethics defines the rules the engineer
will follow when performing professional work.
It is an essential part of the public perception of a
profession.
20
But J. Q. Public
probably hasn’t a clue what it is that an engineer actually
does.
Does society really care about or understand the details
of a code of ethics for engineers or any other profession?
Likely not.
From previous lecture:
A profession does not need society’s recognition to be a
profession
If society recognizes the profession, it gives it special
privileges
21
Reason # 3 – A Contract between
Professionals
Professional engineers want to practice their
profession and serve some ideals.
Cooperation is required to serve these ideals.
Examples of ideals:
public safety, good engineering practice,
best applications of technology, adequate
compensation for services
22
This means the following:
The code of ethics is an agreement among
engineers as to how the ideals of the profession
will be achieved.
Agreeing to cooperating to achieve ideals
establishes engineering as a profession
Society may recognize this and allow self-
regulation.
23
In fact APEGBC says
Clause 14 (a) of Bylaws:
The purpose of the Code of Ethics is to give general
statements of the principles of ethical conduct in order
that Professional Engineers and Professional
Geoscientists may fulfill their duty to the public, to the
profession and their fellow members.
Essentially it is a set of principles that professionals
agree to use to fulfill their duties.
24
Why follow the code of ethics?
• Because you promised?
Did you really?
• Because society says you must?
Did it?
• Or …
Or why cooperate with other engineers?
25
Consider this
Item 5 of the APEGBC Code of Ethics
[Professional Engineers and Geoscientists shall]
uphold the principles of appropriate and adequate
compensation for the performance of engineering and
geoscience work.
See
http://www.apeg.bc.ca/library/actbylawscode.html
26
A thought experiment
A rogue engineer might offer to do engineering work for
small cost in order to get the work. That would be in the
engineer’s self-interest.
However, the result of all engineers doing that is
devaluation of engineering work such that eventually all
engineers are poorly paid, i.e., all engineers would be
worse off, including the rogue.
⇒ Engineers should agree to demand adequate
compensation.
With a little imagination you can make up similar situations for the other items in
the APEGBC code of ethics. Pick any item and describe an example which is self-
defeating and leads to the need for that item in the code of ethics.
27
With a little imagination
you can devise similar thought experiments for
each item in the code of ethics.
Thus the code of ethics should be followed by all
practicing engineers for the collective good of the
profession.
28
And so we have this
• an agreement among professional engineers as
to how ideals of the profession will be achieved
• an agreement among professional engineers to
forego their self-interest and act in the
interests of the profession
A code of ethics is
As the public is in general incapable of distinguishing good from bad decisions,
ethical codes are normally part of a profession's own self-regulation. Public
guidance typically is confined to imposing stricter rules if deficiencies exist.
Recent examples include the Sarbanes-Oxley act in the US which holds directors
of a company directly liable for mistakes and mis-statements in company balance
sheets.
29
What does an engineering code of
ethics look like?
• Fundamental canons
– The ideals
• Rules of practice
– Interaction with public
• Professional obligations
– Interaction with other engineers and with clients
The National Society of Professional Engineers
(NSPE) code of ethics consists of the following:
See NSPE and APEGBC Codes of Ethics
in Articles of Interest link
Interesting to compare the level of detail in APEGBC code of ethics and those in
other provinces with NSPE code of ethics and the codes of ethics of other
professions. Not a lot of detail in provincial engineering codes.
30
Important features of a code of ethics
• Internally consistent with few exceptions
• Often can be applied without much
interpretation by any practicing engineer
• Provide an indication to the public of
what can be expected
31
It’s not only professionals
To forgo one’s self-interest for the good of a
collective is a very common social dilemma.
Examples of a collective:
family, a neighborhood, a profession, or
society
The interesting question:
When is it advantageous to act in one’s self-
interest and when is it not?
32
The Lunch Bag Exchange Game
Dick
Jane
Consider Dick and Jane who meet at noon to exchange closed bags, with the
understanding that each of them contains a lunch made that morning.
33
Cooperation is where a person puts a delicious
lunch into the bag
Defection is where a person puts something else
in the bag.
If they both cooperate both get a good lunch
Given their busy lives, it is in the self interest of
both to defect. But this leaves the other with a
bad feeling and threatens the arrangement.
The choices and the dilemma
34
The Lunch Bag Game Payoff Matrix
yuck+,yuck+ yum,yuck+ defects
yuck+, yum yum,yum cooperates
Dick
defects cooperates
Jane
This is a one-shot game. It does illustrate the gains associated with cooperation
and the losses associated with defection. However, life goes on continuously and
it is of interest to know what happens in repeated games, i.e., what would Dick
do if Jane defected the last time?
35
The Moral of the Story
Individually self-interested action results in both
players being worse off than if they cooperated
But a prior agreement is required for cooperation
36
Examples
• Strategies in an arms race
• Price wars
• Labor negotiations
• Bicycle racing
• Plea bargaining (prisoner’s dilemma)
• Internet congestion
• Office politics
• Finding a date
Nuclear arms present a serious dilemma. In an arms race it is in the interest of one nation to use a
nuclear deterrent. However, if one or more of the nations in the arms race actually uses the
deterrent, the world may not be fit to live in.
In price wars, it is in the interest of one merchant to lower the price as much as possible. If every
merchant does this, then prices eventually decrease to such low levels that no merchant can
benefit.
It is in the interest of both sides in labor negotiations to make excessive demands. However, both
sides are constrained by the knowledge that actual realization of these demands will make the
labor climate or future negotiations even more difficult. During negotiations, both sides may
persist in their demands leading to another game called “chicken”.
Two cyclists often work together (mutual cooperation) by sharing the tough load of the front
position in a race, where there is no shelter from the wind. If neither of the cyclists makes an
effort to stay ahead, the other cyclists will soon catch up (mutual defection). However, a
common scenario is one cyclist doing the hard work alone (cooperating), keeping the two ahead
of the other cyclists. In the end, this will likely lead to a victory for the second cyclist (defecting)
who has an easy ride in the first rider's slipstream.
Suppose two friends are caught trespassing and police suspect they have committed a recent B&E,
then police will separate the two and offer each the following bargain: if you confess to the B&E
and your friend does not, you go free and your friend goes to jail for two years; if you confess and
your friend confesses, you both go to jail for six months; if neither of you confesses then you both
get fined for trespassing. Not knowing what the other is going to do, it is in the interest of each to
confess, even if each is innocent of the alleged crime. However, both would be better off if they
had a prior agreement to keep quiet if caught. (This is not a suggestion for what to do when
caught – other things will give you away.)
37
www.dilemma.com
Latency:
Round trip travel
time of ping packet
Ping time:
Time at which a ping packet is sent from Stanford
University (US) to Cranfield University (UK)
10,000 packets sent, 179 timed out
Rational to consume bandwidth resources since users are not charged in
proportion to their use
All users think this way and soon the system performance degrades (defectors)
But as users experience congestion, they reduce use and free up bandwidth
(cooperators)
Result of interplay between defecting and cooperating is “Internet storms”
Source: Huberman, B. A. and Lukose, R. M., 1997. Science, 277, 535-537
38
The Game of Chicken
Jim and Buzz both want Judy
Two options:
Jump first:
alive but a “chicken”
Jump last:
go home with Judy
But until the last second …
Jim asks what will Buzz do?
Buzz asks what will Jim do?
J udy
In the movie, Rebel Without a Cause (1955), Jim (played by James Dean) and Buzz Gunderson
compete for the favours of sixteen year old Judy (played by heartthrob Natalie Wood). Buzz's gang
members steal two cars. The group of teenagers gather on a Los Angeles lookout overlooking a
cliff that drops down to the Pacific Ocean. James and Buzz are to drive the stolen cliffs toward
the cliff. The first person to jump from his car is declared the chicken. The last person to jump is
the hero, capturing Judy's affection and the gang's respect. The driverless cars continue over the
cliff and plunge to the rocks at its base.
Each driver has two strategies. Jump when he feels endangered; jump after the other driver
jumps. There are four possible outcomes of the game. The worst that can happen is that both
James and Buzz chose to jump after the other driver jumps. Then both cars will go over the cliff
with James and Buzz in them.
In the movie, Buzz tells James before the game that he likes him. They could have had an implicit
agreement, based on mutual respect, to both Jump first. After all, they had already proven their
mettle in a knife fight. Unfortunately, the sleeve of Buzz’s leather jacket gets caught on the door
handle of his car. He cannot jump, even though James jumps. Both cars and Buzz plunge over the
cliff.
If you want to find out who got Judy, rent the movie.
39
The Payoff Matrix
dead-dead Judy-chicken jumps last
chicken-Judy idiot-idiot jumps first
Jim
jumps last jumps first
Buzz
40
Cubicle Dilemmas
41
If you get tired of late night TV …
http://www.gametheory.net/html/applets.html
Iterated Prisoner’s Dilemma
Evolution of Cooperation
Design your own game
42
How to find a date
Scene in the movie A Beautiful Mind
Location: Pub near Princeton University
Time: early 1950s
Players:
John Nash and fellow graduates
A blond woman with some female friends
Nash realizes that if all his friends pay attention to the
blond, she will flee with all of her friends.
Solution:
Agree to pay equal attention to each female for the
good of the group of men (in this case)
John Nash is in a pub with fellow male graduate students. In walks a blond with
some female friends. All males are interested in the blond.
He realizes that it would be in his self interest and that of his friends to focus on
the blond to try to get her attention.
However, if they all do this the blond will become scared, have an attack of the
“vapors”, and run off with all her friends. Then nobody gets a date.
The solution: agree to play it cool – all will benefit and may get a phone number
The same goes for a group of women if Johnny Depp and some friends walk into
the pub. Leave Mr Depp alone for the good of the group. If he is accosted by all of
you, he will become scared and run away with all of his friends. Then you will all
be back at your table drinking your beers, bellinis, and mojitos. He will not
commit to one of you – men don’t do that.
1
APPLIED SCIENCE 450
Professional Engineering Practice
Conflicts of Interest and Self-Interest
W. Scott Dunbar
2
Ethics is …
Self-interest
or
Group-interest
Interests of
others
the battle between
3
Conflict of Interest
Private/personal
interests
Professional
duties
Professional
decision
A situation in which a professional has a private
or personal interest that influences the objective
exercise of his or her professional duties
P
4
The usual private interests
• Self-interest
– job
– career goals
– financial
– reputation
• Family
• Friends
There may also be interests of the group you
belong to
5
Professional duties
• Duty of care and standard of care
• Maintain confidentiality
• Impartiality
• Fiduciary duties
– duty arising out of special relationship of
trust
• Third parties who may rely on your advice or
judgment
6
Serious stuff
The usual results:
• Damage to career
• Damage to work colleagues or company
• Damage to the profession
Engineers are employed for their expertise and
skill
Advice and judgment must be reliable – many may
depend on it and trust the engineer to make
unbiased decisions
7
A conflict of interest is not ...
• Conflicting interest
Jane likes to play soccer and drink foamy brown
fluids; she cannot decide which she wants to do.
• Conflicting legitimate obligations
Dick is designing a widget. He has an obligation to
the public to make it safe, but he also has an
obligation to his employer that the widget be
manufactured at low cost.
• Conflicting ethical dilemma
e.g. honesty versus honesty causing harm
8
A problem with Utilitarian thinking
If evaluation of benefits and costs is done by
same person or group ⇒ conflict
For proponents:
Benefits ↑ Costs ↓
For opponents:
Benefits ↓ Costs ↑
9
The Ford Pinto – early 70s
Introduced to compete with Japanese cars
Weighed less than 2000 lbs, cost $2000
For details of this story:
http://www.motherjones.com/news/feature/1977/09/dowie.html
Ugly, ugly car, but cheap
10
The Ford Pinto – 1971-72
• Bolts on the differential housing
were very close to the gas tank
• Gas tank design violated safety
standards
• During 20-mph crash tests, the
tank ruptured, fire often resulted
• A fix: rubber barrier or move the
tank. Cost estimate: $11 per car
Source: http://www.motherjones.com/news/feature/1977/09/dowie.html
11
1972-1979
• Several deaths due to fires caused by rear-end
collisions of Pinto
• Fifty lawsuits filed against Ford – majority
successful
• J. C. Echold – director of safety for Ford
defended Ford gas tank design decisions with
cost/benefit analysis
12
The utilitarian calculus of J. C. Echold
180 ×$200,000
+ 180 ×$67,000
+ 2100 ×$700
= $49.15 M
Total
benefits
11 M ×$11
+ 1.5 M ×$15
= $137 M
Total costs
$200,000 per death
$67,000 per injury
$700 per vehicle
Unit costs $11 per car
$15 per truck
Unit costs
180 burn deaths
180 serious burns
2,100 burned vehicles
Savings 11 million cars
1.5 million light trucks
Sales
Benefits Costs
Estimates of deaths, injuries and
damage based on statistical studies
⇐ Conflict of interest ⇒
Source: http://www.motherjones.com/news/feature/1977/09/death.html
13
And in 1971 a life was worth …
$200,275 Total
$200 Miscellaneous accident cost
$5,000 Assets (lost consumption)
$900 Funeral
$10,000 Victim’s pain and suffering
$1,000 Employer losses
$3,000 Legal and court
$4,700 Insurance administration
$1,500 Property damage
$700
$425
Medical costs
Hospital
Other
$132,000
$41,300
Future productivity losses
Direct
Indirect
Source:
US National Highway Traffic
Safety Administration
14
The outcome
• June 9, 1978 the company recalled 1.5 million
Pintos – cost of fix: $1 per car
• Improvements to tank design finally appeared
in 1979 model
15
Extreme Utilitarianism
To achieve the greatest good for the greatest
number, donate all salary and assets to the poor.
Over-estimation of benefits
Who is “the poor”?
Conflict with self-interest so no one does it
16
Types of conflict of interest
• Actual
– looks like it, smells like it, therefore it is
• Potential
– could be or could become one
• Apparent
– looks like one
17
An actual conflict of interest
John is an engineer working for JayCo. For the past 50
years, John's family has owned a company that makes
bolts. JayCo needs to purchase 100,000 bolts for a large
construction project. If JayCo purchases the bolts, John's
stock in the bolt company will increase by 20%.
Does John have a conflict of interest?
There is no way John’s decisions could not be swayed by the possibility of such
financial gain.
18
A potential conflict of interest
John is an engineer working for JayCo. For the past 50
years, his fiancee's family has owned a company that
makes bolts. JayCo needs to purchase 100,000 bolts for a
large construction project. If John marries his fiancee, he
stands to gain financially if JayCo purchases the bolts
from his fiancee's company.
Does John have a conflict of interest?
If John marries, he would be in conflict. What to do? Postpone the wedding
forever.
19
An apparent conflict of interest
John is an engineer working for JayCo. For the past 50
years, John's family has owned a company that makes
bolts. Ten years ago, John had a fight with his family and
has not spoken to them since. John owns no stock in the
bolt company. JayCo needs to purchase 100,000 bolts for
a large construction project.
Does John have a conflict of interest?
More subtle, but the assumption is that John has forgotten all the bad feelings and
would be objective about ordering bolts from his family’s company. If not, … ?
20
What is this?
Companies A and B are competitors bidding on a
development project. Each forms a joint venture with
Company C to prepare their bids.
Is C in a conflict of interest? If so, what kind is it?
B A
C
BC Bid
AC Bid
This could be an apparent conflict of interest. C would have to work to be
impartial about its costs and methods. Can they be the same for both A and B?
21
And this?
Engineering company EE is designing plants for two
companies A and B that compete in the same
market. EE specifies equipment from manufacturer
M as part of their designs. The same people in EE
will be working on both design projects.
What is this?
This is a conflicting legitimate obligation. Care must be taken that no proprietary
information leaks from A to B. It could become a conflict of interest if, for some
reason, EE receives favorable treatment from either A or B if, for example, EE
accelerates the design work. Then EE’s judgment could become biased.
22
This is very common
Company X is asked to provide a feasibility study
for an industrial project, including preliminary
design, cost estimates, and economic analyses.
If the feasibility study is favorable, X knows that
it may be asked to bid on the final design.
What should X do?
X should not take either the feasibility study or the possibility of bidding on the
project, not both. But sometimes the available talent and experience is limited to
a few companies.
23
More insidious conflicts of interest
• Automatic vs controlled mental processes
• Latent biases
– self-perception
– implicit prejudice
– favoritism of group
• Actually more pervasive than the visible
variety, but often dismissed
The “invisible” conflicts of interest:
These make life interesting.
24
Characteristics of Automatic and
Controlled Mental Processes
• Fast (parallel processing)
• Effortless
• Involuntary
• Not accessible to
introspection
• Slow (serial processing)
• Effortful
• Voluntary
• Accessible to
introspection
Automatic Processes Controlled Processes
Vision: an example of an automatic process
Involuntary - impossible to choose not to see
Difficult to answer: Why did I recognize that face?
Vision involves numerous parallel processes—e.g., edge and pattern recognition
and retrieval of information from memory. Vision is also largely unaccompanied
by any feeling of subjective effort, and does not detract from other similar
processes (e.g., it is equally easy to speak with one’s eyes open or shut, and
likewise equally easy to see when one is or is not talking). Vision is also
involuntary; except by blocking one’s visual field, it is impossible to choose not to
see.
The cognitive processes that give rise to vision are also almost totally inscrutable.
Most people, if asked to explain how it is that they can “see” whatever is in their
visual field, would have a great deal of trouble answering the question. For
example, people are generally not able to offer articulate insight into how their
brains solve visual problems such as depth perception or face recognition.
25
What these processes do
Professional
duties
Controlled
processes
Self-interest
Automatic
processes
i.e., you have to think to be ethical and
understand your professional duties
26
Where do these processes happen?
Controlled processes Automatic processes
Pre-frontal cortex – thinking, reasoning
Amygdala and “limbic system”– emotions, feelings
27
Conflict of Processes
Controlled
Processes
Automatic
Processes
Decision
Usually processes work
together but conflict possible
Usually these processes work together to assist with decisions. However,
predictable situations arise when they conflict which can lead to bias in judgment
and decision-making.
28
The problem
Automatic processing done unconsciously
its influence on decision-making is difficult to
eliminate or correct and so …
self-interest often prevails even if conscious
effort is made to be ethical and professional
⇒ Conflicts of interest inevitable
Automatic processing is a survival mechanism – if you had to think about
everything, you wouldn’t have time to respond to threats, for example.
Mapping the Mind by Rita Carter (2000):
“where [conscious] thought conflicts with emotions, the latter is designed by the
neural circuitry in our brains to win.”
29
How automatic are you?
100 jellybeans
7 red ones
10 jellybeans
1 red one
Bet money that you will draw a red jellybean from a can
Pick a can
Although subjects reported that they “knew” that the objective probability was
higher in the jar on the right, they nevertheless were more likely to bet on the jar
on the left.
The controlled system conformed to the rules of probability while the more
automatic “experiential” system was swayed by the raw number of red beans in
the jar on the left.
Reference:
Denes-Raj, V., and Epstein, S., 1994. Conflict between intuitive and rational
processing: When people behave against their better judgment. Journal of
Personality and Social Psychology, 66(5): 819–829.
30
Determinants of automatic processing
The effect of cognitive load
The prefrontal cortex has low capacity and so the
brain always trying to shift tasks to automatic
Increased
cognitive load
Full cortex
Automatic
processing
31
Determinants of automatic processing
Self-perception
- ethical
- deserving
- competent
Acceptance by
others
Comfortable with
behaviors
behaviors
Automatic
processing
It is logically impossible to be objective about oneself because the only way one
experiences the world is through one’s own senses. Also it is self-deceiving to
think one can be objective about the effects of one’s actions because the best
one can do is imagine these effects from one’s own perspective.
It is easy to accept an action accepted by others.
32
Example:
Kurzweil Applied Intelligence
• Manufacturer of voice-recognition devices
• Sales reps allowed to post unsigned sales a few days in
advance to meet sales and financial targets
• Deals never made final
• Auditors began checking, found discrepancies
• At trial, Bernard Bradstreet, CEO, defended his
decision but “conceded nailing down the details of the
sale took longer than he expected”
This is not a conflict of interest case, but it does illustrate how acceptance by
peers can lead to an automatic acceptance of behavior.
See
Maremont, M., 1996, September 16. Anatomy of a fraud. Business Week, pp. 90–
94.
Available under Articles of Interest on web site
33
Some latent biases leading to CoIn
• age
• gender
• race
• sexuality
• nationality
• weight
34
Example
Is this a conflict of interest or does it represent an
obligation to be loyal to one’s nation?
Majority of reconstruction of Iraq being done by
Bechtel, Halliburton, Fluor, Washington Group,
Parsons Brinkerhoff
all US companies, each with ties to government
AMEC, a British firm, received a contract only by
partnering with Fluor
Are these really the best companies for the job?
35
If you think …
… you could never be guilty of any of these
biases, try the following on line test:
https://implicit.harvard.edu/implicit/
in which you will be asked to make split-second
categorizations of words and pictures
36
Implicit Association
• When two concepts are associated in a
subject’s mind, it is easy to give the same
response to exemplars of the concept
• When two concepts are not associated in a
subject’s mind it is not easy to give the same
response to exemplars of the concept
37
Young-Old Exemplars
Young
Old
38
Good-Bad Exemplars
vomit rainbow
tragedy paradise
filth pleasure
agony warmth
grief joy
stink smile
death happy
pain gentle
Bad (unpleasant) Good (pleasant)
39
The Implicit Association Test for Age
• Measure latency for Young-Old exemplar pairs
• Measure latency for Good-Bad exemplar pairs
• Measure latency for Young-Good exemplar pairs
• Measure latency for Old-Young exemplar pairs
• Measure latency for Old-Good exemplar pairs
Latency – the time (in milliseconds) between
a stimulus and response to the stimulus
40
The IA effect
650
625
640
620
900
Young-Old Good-Bad Young-Good Old-Young Old-Good
0
200
400
600
800
1000
IA effect 900-640 =260 ms
M
e
a
n

L
a
t
e
n
c
y

(
m
s
)
41
So if you see a CoIn coming …
• Try to avoid it
• Disclose it to all concerned
• Recuse – disqualify yourself from any decisions
42
Disclosure
The basic idea:
Tell all concerned and they will
accept the situation and
be sufficiently informed to discount your
advice as appropriate
43
Something for everyone
• Professionals can still do their job and feel
comfortable with decisions made
• No need for professionals to disrupt the status
quo, e.g., sever financial relationships or
change how they get paid
• Advice receivers (clients) have the information
they need to look out for their interests
44
But …
Is the effect of the conflict on a professional’s
judgment any less as a result of disclosure?
Does the client really have the ability to
discriminate good decisions from bad ones?
45
An experiment to test these questions
150 undergraduates at Carnegie-Mellon University
Estimators (clients)
Shown six jars of coins for 10 sec at 1 m distance
Asked to guess value of money in jar
Paid according to accuracy of estimate
Advisors
Inspected jars more closely
Gave estimators advice via written suggestions
Source:
Cain, D. M., Loewenstein, G., and Moore, D. A., 2005. The dirt on coming clean:
Perverse effects of disclosing conflicts of interest. Journal of Legal Studies, 34(1):
1-25
Available on web site
46
Advisors divided into three groups
Group 1 (Accurate)
Paid according to accuracy of client’s estimates
Group 2 (High/Undisclosed)
Paid according to how high their client’s estimates
were above the actual value
Group 3 (High/Disclosed)
Paid according to how high their client’s estimates
were above the actual value
Required to disclose the conflict of interest to
client
47
The payoff functions
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5


P
a
y
o
f
f

(
$
)
Deviation from actual ($)
Advisors with incentive for accuracy
0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
Advisors with incentive for high bias

P
a
y
o
f
f

(
$
)
Deviation above actual value ($)
48
Values suggested by advisors
Mean values all jars
$24.16
High/
Disclosed
$20.16
High/
Undisclosed
$16.48 Accurate
$18.16 Actual
Conflicted advisors gave higher suggestions
M N P R S T
0
5
10
15
20
25
30

A
d
v
i
s
o
r
'
s

S
u
g
g
e
s
t
i
o
n

(
$
)
Jar
Accurate
High/Undisclosed
High/Disclosed
Actual Value
Advisors' estimate
The conflicted advisors gave more biased advice, i.e., their advice was higher
compared to what they actually thought and higher than those in Group 1 who did
not have a conflict of interest.
Advisors in Group 3 who were required to disclose their conflict of interest gave
even more biased advice that those in Group 2 who did not disclose their conflict.
49
How the estimators fared
Accurate High/Undisclosed High/Disclosed
11
12
13
14
15
16
17
18
19
20
21
22
23
24
M
e
a
n

E
s
t
i
m
a
t
e

(
$
)
Actual mean =$18.16
Estimators knowing of conflict fared the worst
Disclosure caused the estimators to discount a conflicted advisor’s advice, but not
sufficiently to offset the high bias of the advice. Estimators receiving the
disclosure fared the worst – large standard deviations in their estimates.
50
The conclusions
• Advisors with conflicts of interest will give
more biased advice under conditions of
disclosure than without disclosure
• Estimators will make less accurate estimates
with disclosure of conflicts of interest than
without their disclosure
• Disclosure has limited value
51
Summary
• Conflicts of interest should be avoided
– actual, potential, and apparent
– hard to recognize
• Conflicts of interest are inevitable due to
– automatic vs controlled mental processes
– latent biases
• Disclosure of conflict does not mitigate conflict
APSC450 - Software Development and Ethics October 2005
Philippe Kruchten, kruchten@ieee.org 1
Copyright ©2005byPhilippe Kruchten 1
T H E U N I V E R S I T Y O F B R I T I S H C O L U M B I A
APSC 450:
Software Development & Ethics:
An Oxymoron?
A guest lecture by Philippe Kruchten
2
Outline
Who’s this guy
A case study
Software and ethics: What’s the
connection?
The IEEE/ACM Software engineering code
of ethics
Another case study
Software and ethics in a flat world
3
Philippe Kruchten, Ph.D., P.Eng., CSDP
Professor of Software Engineering
Department of Electrical and Computer Engineering
University of British Columbia
Vancouver, BC Canada
pbk@ece.ubc.ca
604 827-5654
30+years in Industry prior to UBC
• Telecommunications
• Transportation
• Defense
• Nuclear
• Software development tools
• Software development methods and process
4
The FastWork case
OrcaSys has bid and won the development of an information system
(FastWork) to be used in an employment agency in Eastern Canada.
In reading the detailed requirements (a 59 page document), J ohn
Bertram, a professional software engineer employed by OrcaSys,
discovers a little clause on page 33 that explains that, when
displaying applicants whose qualifications appear to match those for
a particular job, the names of white applicants are to be displayed
ahead of those of nonwhite applicants, and names of male
applicants have to be displayed ahead of those of female applicants.
J ohn decides to simply ignore these requirements, and the systemis
delivered 4 months later for an initial test at the agency.
During the beta test period, by-passing the web-based software
problem reporting mechanism put in place to handle problems, the
irate manager and owner of the employment agency first contacts
directly J ohn (a white male), who explains his reticence at implement
this clause, and then he calls J ohn’s manager, David Arnold, flatly
demanding to remove J ohn from his current assignment on this
system, and to fix the system for the second beta test or he would
not accept the system (at a cost of up to $120,000 to OrcaSys).
Anderson, R. E., Johnson, D. G., Gotterbarn, D., & Perrolle, J. (1993).
6
Software and ethics – an oxymoron?
A very unethical profession
• “whatever I can get a way with”seems the rule
Software often seen as innocuous “addon”
Low quality
• Push responsibility for failure to user
8
Software and ethics – an oxymoron?
A very unethical profession
• “whatever I can get a way with”seems the rule
Software often seen as innocuous “addon”
Low quality
• Push responsibility for failure to user
APSC450 - Software Development and Ethics October 2005
Philippe Kruchten, kruchten@ieee.org 2
9
Social responsibility
Software defects may cost lives or
tremendous business losses
• we should try to prevent them
• we should study them when they occur, to avoid
failures in the future
Software creates new opportunities for
increasing productivity and services, but also
opportunities for criminal fraud and sabotage
(e.g., viruses)
Building reliable software is not only a
technical goal; it has ethical and social
implications for the serious professional
10
Software Engineering Code of ethics
The ACM and IEEE Computer Society
have developed a “Software
engineering code of ethics and
professional practices”
The “public interest” is central to the
code, which emphasizes the
professional’s obligation to the public at
large
• primary concern for the health, safety, and
welfare of the public
11
Code of ethics principles
1. Public
Software engineers shall act consistently with the
public interest
2. Client and Employer
Software engineers shall act in a manner that is in
the best interests of their client and employer,
consistent with the public interest
3. Product
Software engineers shall ensure that their products
and related modifications meet the highest
professional standards possible
4. Judgment
Software engineers shall maintain integrity and
independence in their professional judgment
See long form on web site
12
Code of ethics principles (cont.)
5. Management
Software engineering managers and leaders shall subscribe
to and promote an ethical approach to the management of
software development and maintenance
6. Profession
Software engineers shall advance the integrity and
reputation of the profession, consistent with the public
interest
7. Colleagues
Software engineers shall be fair to, and supportive of, their
colleagues
8. Self
Software engineers shall participate in lifelong learning
regarding the practice of their profession and shall promote
an ethical approach to the practice of the profession
13
The SpeedTax Case
OrcaSys has just produced a new software package, SpeedTax, that
incorporates the new tax laws and figures taxes for both individuals and
small businesses. The vice-president of the company knows that the
program has a number of bugs, as shown by tests performed, and that
they do not have enough manpower to really perform through tests. He
also believes the first firm to put this kind of software on the market is
likely to capture the largest market share. Because personal taxes are
filed in April in Canada, postponing a launch beyond mid December is
pretty bad, and defers any revenue from individual by a year.
OrcaSys widely advertises the program in November and December.
When the company actually ships SpeedTax, on Dec 20, it includes in
its installer a disclaimer of responsibility for errors resulting from the use
of the program.
The company expects it will receive a number of complaints, queries,
and suggestions for modifications. The company plans to use these to
make changes and eventually issue updated, improved, and debugged
versions in February and March. The president argues that this is
general industry policy and that anyone who buys version 1.0 of a
program knows this and will take proper precautions. Because of bugs,
a number of users filed incorrect tax returns and were penalized by
the tax agency.
derived from R. Kremer, U. of Calgary 15
It’s a flat world
Software developed anywhere, used
anywhere
What ethical standards apply then?
1
APPLIED SCIENCE 450
Professional Engineering Practice
Ethics and Emotions?
W. Scott Dunbar
2
2
This lecture will include
• A bit of physics
• Neuroscience (brain parts)
• Evolutionary biology
• Some psychology
• Results of one of the surveys
• A classic case history in engineering
ethics
3
3
Brain parts
The limbic system is where emotional processing occurs. It is thought that
primitive humans had nothing but a brain stem, a limbic system, and an olfactory
lobe (sense of smell) to work with. Millions of years later as evolution progressed,
the thinking brain or “neocortex” evolved over the top of the limbic system.
There was an emotional brain long before a rational one.
4
4
What are emotions?
• happiness
• sadness
• fear
• anger
• surprise
• disgust
5
5
And what are they good for?
Fear is good for
survival
visual
cortex
thalamus
amygdala
Scary thing
The thalamus is a routing station for all incoming sensory impulses except those of
smell, transmitting them to higher (cerebral) nerve centers, such as the sensory
cortexes.
The amygdala is a small, almond-shaped structure located in the forebrain in
between the two halves of the brain. It functions to control autonomic, emotional
and sexual behaviour.
See www.brainexplorer.org
6
6
Road map for stimuli in the brain
Thalamus
Sensory
cortex
Amygdala
Stimuli
Response
quick and dirty
< 0.1 s
slow but accurate
≥ 0.1s
The emotional, “quick and dirty”, response is beneficial for survival of a species.
Emotions are primal, believed to have evolved long before the brain structures
required for thinking. If, for example, we humans spent time thinking about what
to do about a predator, we would not be around to spread our genes.
All of this was discovered by surgically removing parts of a rat’s brain, such as its
amygdala, and seeing how it responded. When the amygdala was removed, the rat
failed to learn to respond to noise or something fearful.
See Le Doux, J., 1996. The Emotional Brain. Touchstone, New York
7
7
But we need both emotion and reason
to make decisions
Logic and reason
Gut feeling,
intuition
Living with a damaged
amygdala is not fun
decision
8
8
Magnetic Resonance Imaging
The magnetic field is always on
UBC’s MRI Scanner
Superconducting magnet
B = 0.5-2.0 Tesla
B(Earth) ~ 0.3-60 microtesla
The core of an MR scanner consists of coils of superconducting wire that are
continuously immersed in a bath of liquid helium to allow them to carry large
electrical current without resistance, generating a magnetic field that serves to
align hydrogen nuclei in the body's water molecules. Although it is thousands of
times stronger than the Earth's magnetic field, there are no known health risks
directly associated with the magnetic field in an MR scanner.
These large fields are always present, even when images are not being collected.
This can lead to accidents in which metal objects fly into the bore of the magnet.
One such accident is shown on the right.
9
9
This is a proton
in a magnetic and electromagnetic field
RF signal
Proton precesses about magnetic field vector. RF signal switched off,
proton realigns with magnetic field and releases energy ⇒ MRI signal
The RF signal frequency is tuned to the precession frequency of the proton; hence
the term resonance. The signal can be focused on very specific parts of the brain
or body – within a millimeter.
10
10
Image of a normal brain
11
11
The BOLD response
Blood Oxygen Level Dependent response
Increase in neuronal activity requires oxygenated blood
Oxygenated blood is diamagnetic ⇒ loss in MRI response
Deoxygenated blood is paramagnetic ⇒gain in MRI response
Find location of losses while subject is thinking about something
functional Magnetic Resonance Imaging (fMRI) is when MRI is used to study
the behaviour of the brain as it is working. When, for instance, you click
your fingers, the brain cells in the region of your brain known as the motor
cortex start working harder to send the signals to the muscles in your
fingers to tell them to contract. The brain then responds by increasing the
blood flow to the motor cortex to provide the food and oxygen needed to
create these signals.
The brain over compensates, and the result is that the oxygenation of the
blood in the motor cortex actually increases. Since oxygenated and
deoxygenated blood have different magnetic susceptibilities, they show up
differently on the images. This is known as the Blood Oxygen Level
Dependent (BOLD) response.
12
12
Functional MRI (fMRI) scan
Visual
cortex
Auditory
cortex
false color image
Subject listening to sentences while
watching flashing checkerboard
13
13
Bystander
You are strolling by a railway track and notice that a
runaway train is rolling down the track at high speed
toward seven men working on the track. The seven men
will have little chance to escape being run over by the
train because the tracks where they are working are
located in a steep-walled valley. Next to you there is a
lever that will throw a switch to divert the train onto a
siding on which one homeless man is sleeping. Should you
pull the lever and kill the sleeping man but save the
seven?
14
14
Fat Man
You are standing on a footbridge that crosses over a
railway track. A runaway train is rolling down the track at
high speed toward seven men working on the track. The
seven men will have little chance to escape being run
over by the train because the tracks where they are
working are located in a steep-walled valley. Next to you
there is a large individual (the fat man) who, if thrown in
the path of the runaway train, would either stop or derail
the train. Should you throw this fat man off the bridge?
15
15
What the fMRI scan showed
M
e
d
i
a
l

f
r
o
n
t
a
l

g
y
r
u
s

(
B
)
P
o
s
t
e
r
i
o
r

c
i
n
g
u
l
a
t
e

g
y
r
u
s

(
B
)
A
n
g
u
l
a
r

g
y
r
u
s

(
L
)
A
n
g
u
l
a
r

g
y
r
u
s

(
R
)
M
i
d
d
l
e

f
r
o
n
t
a
l

g
y
r
u
s

(
R
)
P
a
r
i
e
t
a
l

l
o
b
e

(
L
)
P
a
r
i
e
t
a
l

l
o
b
e

(
R
)
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
P
e
r
c
e
n
t

c
h
a
n
g
e

i
n

M
R
I

s
i
g
n
a
l

r
e
l
a
t
i
v
e

t
o

b
a
s
e
l
i
n
e
Moral-personal
Moral-impersonal
Non-moral
Areas associated
with emotion
Areas associated
with reasoning
Moral-personal: Fat Man
Moral-impersonal: Bystander
Non-moral: Should I take the bus or walk?
16
16
Some theories as to why this happens
Do not kill – the rule has been with us for centuries
Or is it something more primal?
What would happen to a species if
it killed its own?
Our brains are "stamped" with the
idea that killing humans is bad for
survival and therefore it becomes
something to avoid, emotionally
significant
On one level the emotional response occurs because the idea that taking a life is
wrong has been with us for centuries, whatever the religion or race.
At a deeper level it is a primal response required for survival of a species. The
human species would not survive if it killed members of its own without
inhibition. Therefore we are programmed to not kill and there is an evolved
emotional response to the prospect.
17
17
But nowadays …
• change
• threats
• opportunities
• uncertainty
• ambiguity
• incomplete information
• personal conflict
• conflicting requirements
• contingencies
• discordant events
physical dangers such as predators have been replaced by
life in general and
professional life in particular
Any one of these things could lead to you acting in your self-interest instead of
the interests of others. This might be unethical.
18
18
Also …
it took significantly longer for subjects to answer
“yes” to a moral-personal problem like Fat Man
than to a moral-impersonal problem like
Bystander
19
19
Why does this happen?
Anterior cingulate cortex
reacts to mistakes or conflicts
evaluates outcomes of one’s actions
or behavior
Conflict: kill the fat man or let the seven die
Attempts to resolve conflict take time
20
20
The Stroop effect
Say the colors of the following words? Quickly!
Interference between what the word says and the color of the word leading to
conflict (and confusion) Anterior cingulate tries to resolve conflict.
Try the test on children who know their colors but cannot read.
21
21
If you think …
this is science gone mad, have a read of the article
The Brave New World of Neuromarketing
to be found in Articles of Interest
Marketers don’t want you thinking!
22
22
Question 1: APSC 450 Class of 05/06
Would you do it?
Yes No
0
10
20
30
40
50
60
70
80
90
P
e
r
c
e
n
t
a
g
e

o
f

r
e
s
p
o
n
d
e
n
t
s
Bystander
Fat Man
Question 1: Would you do it?
Based on the information given in Bystander, do you feel you could have reached
a decision to pull the lever before the train passed by?
Based on the information given in Fat Man do you feel (assuming you were strong
enough) that you could reach a decision to throw the fat man off the bridge onto
the tracks before the train passed by?
23
23
Question 2:APSC 450 Class of 05/06
If yes, how long did it take to answer?
<2 s 2-10 s >10 s
0
10
20
30
40
50
60
Question 2:
If yes, how long did it take to answer?
P
e
r
c
e
n
t
a
g
e

o
f

r
e
s
p
o
n
d
e
n
t
s
Bystander
Fat Man
If you answered Yes to the first question, how long did it take you to reach that
decision?
24
24
Question 3: APSC 450 Class of 05/06
If no, why?
More time/info Morally wrong
0
10
20
30
40
50
60
70
80
90
Question 3:
If no, needed more time/info or morally wrong?
P
e
r
c
e
n
t
a
g
e

o
f

r
e
s
p
o
n
d
e
n
t
s
Bystander
Fat Man
If you answered No to the first question, was it because you needed more
information and time or was it because you felt it was morally wrong to pull the
lever?
25
25
The Challenger disaster:
January 27, 1986
Morton-Thiokol - supplier of booster rockets to NASA
Space shuttle program under pressure to maintain launch
schedule
Morton-Thiokol under pressure to approve launch
O-rings between rocket sections became less flexible at
low temperatures
Predicted temperature at launch: 29°F
26
26
The booster rocket connector
27
27
What the engineers knew
Laboratory and field evidence showed evidence of
reduced flexibility of O-rings at cold temperatures
reduced flexibility ⇒ reduced ability to seal.
However, no conclusive link between cold temperatures
and flexibility could be made
Judgment of engineers – Don’t fly, we are not sure
28
28
O-Ring Behavior Data
29
29
How the data should have been
plotted
25 30 35 40 45 50 55 60 65 70 75 80 85
0
4
8
12
?
D
a
m
a
g
e

I
n
d
e
x
Temperature (
o
F)
30
30
Evening of January 26, 1986
Teleconference: MT, NASA, Marshall Space Flight Center
MT engineers, Roger Boisjoly et al:
“The recommended launch temperature is 53°F.”
NASA not happy with this recommendation:
“My God, Thiokol, when do you want us to launch,
next April?”
MT engineer/managers recommend an off-line meeting
31
31
Things get twisted
A natural question to ask:
“Is it safe to fly?”
What NASA asked the engineers:
“Show that it is not safe to fly.”
32
32
MT manager/engineers
Joe Kilminster
Jerry Mason
Robert Lund
Calvin Wiggins
Late January 26, 1986
MT engineers
Roger Boisjoly et al
NASA
Marshall Space Flight Center

?
Don’t fly!
Concerns ignored,
leave in disgust
Decision up to
these four
Waits for
decision from MT
33
33
A dangerous request
Lund, VP engineering, reluctant to go against no-
launch recommendation of his engineers
Mason to Lund:
“Take off your engineer’s hat and put on your
manager’s hat.”
The point of departure from professionalism in
this case
34
34
APEGBC Code of Ethics
Item 1
Hold paramount the safety, health and welfare of the public,
the protection of the environment and the promotion of health
and safety within the workplace.
Item 3
Provide an opinion on a professional subject only when it is
founded upon adequate knowledge and honest conviction;
Item 8
Clearly present to employers and clients the possible
consequences of overruled or disregarded professional decisions
or judgments.
35
35
Easy to say, but
MT manager/engineers
Joe Kilminster
Jerry Mason
Robert Lund
Calvin Wiggins
Our jobs and
careers are on
the line.
Will MT be the
future supplier
of rockets?
Fear and Fear and
uncertainty uncertainty
Personal involvement
36
36
A possibility
• MT manager/engineers were in a position
similar to Fat Man
– No launch decision analogous to throwing the fat
man off the bridge
– Significant personal involvement
• MT engineers were in a position similar to
Bystander
– detached, excluded from decision, no launch
decision analogous to pulling the lever
37
37
The result – January 28, 1986
38
38
The O-ring failed at launch
39
39
Summary
• Ethical decisions with personal consequences
may trigger an emotional response, likely
involving fear
• Ethical decisions in professional setting may
also engage the emotions, but in a more
complex way
• Emotions are necessary for decision-making
1

Morality
(common meaning):

rules for
how we should live & behave,
what we should do, how we should act


Morality
(more accurate):

a formal system whose aim is to generate

cooperative behavior

and

regulate interpersonal relations,

with two main purposes:

θ practical action guidance
θ conflict resolution
2

Morality in a Liberal Democratic Society

The extent and limits of individual behavior in a liberal democratic
society may be summarized as:




Individuals are free
to formulate & pursue their interests
with minimal interference
as long as they are not harming anyone


















3

The reasoning:

I want to promote as many of my interests as possible, which requires I
have as few impediments as possible

The more others, including the government, interfere with my interests
by telling me what to do–limiting certain behaviors, obligating others–
the more harm I experience

However, rules–both moral and legal–are necessary to create
cooperation and resolve conflicts, which cannot occur unless (almost) all
people follow them

Thus, I accept the burdens of (minimal) interference and comply with
moral and legal rules in order to create an environment where I’m as free
as possible to formulate and pursue my personal interests

Rules will be in favor of those behaviors that generate cooperation and
against those behaviors that impede cooperation or cause harm


From this we can conclude that:


An action is morally and/or legally wrong when the act impedes social
cooperation and/or interferes with or harms someone unjustly or
inappropriately




4


The aim of moral behavior is


Social cooperation



In order to achieve this, we must place


voluntary limitations on our actions



Cooperating with others provides us with


benefits


which justify accepting the responsibility of limiting my
behaviour



5
What are the benefits to me?


θ moral &/or legal rights/protection offered in
exchange for assuming responsibilities

θ social order

θ predictability of behaviour

θ freedom to pursue my individual interests
without fear & with only minimal
interference


People who place voluntary limitations on their behavior
and receive corresponding rights/protection are members
of the


The Moral Community



members of a moral community are called



Moral Persons
Moral Agents

6
The biggest problem in getting people to behave in a morally appropriate way
is the conflict of:


selfishness, self-serving behavior
(only me and my group really matter)

vs

putting the interests of others on equal level with one’s own
(everyone, or every rational being, matters equally)


Social Individual
Interests Interests


7


In order to promote moral responsibilities and make them binding or
obligatory, we have to convince egoistically-inclined people that
behaving morally really is in their long-term best interests



















Cooperation & Compromise
are essential
for functioning together successfully
and with minimal interference






8
The way to ensure that all parties’ interests are weighed equally, we
impose an obligation of

impartiality

when making moral and legal decisions:

> blind justice
> veil of ignorance
> impartial spectator or observer


However, weighing the interests of all parties equally can lead to
injustice when one party will be harmed significantly more than the rest

For example, 40% of Botswana’s population is infected with HIV.
Botswana’s government was counselled to spend their limited funds on
prevention of future infection rather than treating those already suffering.

 this choice calculates the interests of all equally and puts the money
where it will do the most good–a strong Utilitarian answer

 however, this has been labelled as ‘inhumane’, a morally
inappropriate choice because drugs do exist to help infected people










9

There may be strong reasons to assign more weight to the interests of
one party or group than others–impartiality is not always appropriate!


How can we lose the protection of impartiality and still make sure we
don’t put the interests of ourselves and our group ahead of others and
that others don’t to it to us?

θ make sure the relevant interests of all parties involved and directly
affected by the choice and its outcome are explicitly considered

θ require strong, sound reasoning to justify weighing the interests of
some differently than the rest





10

When an employer contracts with an individual to do work, that
individual agrees to promote the interests, values, and goals of the
company:


Good faith requires that the agent place the interest
of his principal above all else except the law



When there are conflicts between the interests of the company and the
moral interests of the individual, stakeholders, and/or society, then the
limitations and extent of the employee’s obligations to his employer
must be made explicit


–>this is done through the professionals’ Code of Ethics



However, appealing to the Code does not resolve all moral
conflicts!



How do you decide what to do?



11
Moral dilemmas occur when we have good reasons for two different
alternative action choices but if either set of reasons is acted upon the
outcomes will be desirable in some ways and undesirable in others
—>the dilemma will be broken based on the strength of the reasons
given and the type, amount, and degree of the desirable and
undesirable outcomes


Method for Resolving Moral Disagreements:


1. Obtaining Objective Information


2. Providing Definitional Clarity


3. Adopting a Code or Moral Theory


4. Using Examples and Counter-examples


5. Analysing Arguments

12
To what extent
does a professional employee
have the liberty, the right, or the obligation
to follow her own conscience,
setting aside her corporate obligations
when they conflict with other
relevant obligations and interests?




How can the professional
decide what to do
in conflict of interest situations?
How can she fulfill her moral obligations?








13

The way to determine the answer to any specific morally challenging
situation:



Step 1: Appeal to the professionals’ Code of Ethics





When that does not provide a clear answer, move to:





Step 2: Apply the 5 steps for resolving moral
disagreements






When that does not provide a clear answer, move to:





14

Step 3: Situating the decision within the broader
moral community

 identifying the nature and extent of the interests of all relevant parties:
employee, employer, shareholders, stakeholders, society at large, one’s
family, etc.

 Assign weight to each interest in accordance with:

1. the immediacy and degree of reasonably likely harms:
who has the most to lose, who will be harmed the most?

2. the reasoning for interests to be considered, usually based
on harm but other factors may be relevant: who is the most
vulnerable to and directly dependent on the decision to be made?






High vulnerability + high potential for harm
= high level of consideration








15
Two things must be kept in mind when making decisions:

1. One’s interest in continued life almost always
overrides one’s interest in earning more money

2. One’s interest in having a decent minimum quality of
life almost always overrides one’s interest in earning
more than a decent minimum of money

0 one must provide extremely strong, compelling justification to sacrifice
life or quality of life for money



For example, if a company can successfully exist elsewhere (even with
significant burdens such as relocation costs) but the ecosystem of a
region cannot survive the actions of the company, the needs of the
ecosystem must be given higher weight in our considerations, allowing
its interests to trump the company’s


16
Your aim is to:

θ Avoid or minimize harm to all parties directly affected by the
decision and/or its outcome

θ Fulfill as many moral, legal, and professional obligations as
possible, being able to provide sound, compelling reasons for
breaching or failing to fulfill any obligation(s)

θ Ensure that, as far as possible, benefits and burdens are distributed
according to a logically sound conception of justice that is
appropriate to the situation
• To each, an equal share
• To each, similar treatment for similar cases
• To each, treatment according to personal effort
• To each, treatment according to ability to pay
• To each, treatment according to merit
• To each, treatment according to seniority ....etc

θ Be ready to provide sound, compelling reasoning which justifies
your choice/action
• appeal to the Code
• appeal to a moral theory
• appeal to data and logic


1
The
Consul t i ng Engi neer i ng
I ndust r y
The
Consul t i ng Engi neer i ng
I ndust r y
Cl i ent s Def i ni t i on of a Consul t ant Cl i ent s Def i ni t i on of a Consul t ant
“ A consultant is someone you hire to tell you the time
(after explaining the concept of time to him),
he then borrows your watch and leaves with it.”
Engineering is the application of
technology to solve the perceived needs
of society.
Engineering is the application of
technology to solve the perceived needs
of society.
“ The imagination is more important
than knowledge.”
Albert Einstei n
“ The imagination is more important
than knowledge.”
Albert Einstei n
Consulting Industry Statistics
•Canadian Industry employs approximately 60,000
•Canadian Industry revenue is approximately $6 Billion
•B.C. Industry revenue is approximately $1 to $1.25 Billion
•Earnings and profits increased by more than 10% in 2003
•Approximately 50% of revenue is derived from sole source
contracts
Consulting Industry Statistics
•Approximately 40% of B.C. Revenue is export related
•Approximately 70% of firms employ 50 or fewer
•Typically firms employ as many technologists as engineers.
•The majority of firms are private corporations
•Leading sectors;
•Building Construction,
•Water & Waste,
•Transportation
2
• Most recent surveys of BC firms indicated that Public Work
represented only 20% of their revenues.
Consulting Contracts Consulting Contracts
•Hourl y Rates
•Upset Fee
•Cost Plus Fixed Fee
•Lump Sum
•Percentage Fee
•Incenti ve Based Contracts
34 10
56
over heads
pr e-t ax pr ofit s
dir ect salar y & benefit s
Elements of a Charge-Out Rate Elements of a Charge-Out Rate
DIRECT SALARY
& BENEFITS
OVERHEADS
PRE-TAX
PROFIT
Tax - 4%
After Tax Profit - 6%
Corporate Overheads Corporate Overheads
(80 empl oyees per annum)
>Rent $400,000
>Bank Interest $ 25,000
>Asset Maintenance & Replacement $350,000
>Office $200,000
>E & O Insurance $150,000
>Other Insurance $ 25,000
>Bad Debts $100,000
>Legal & Accounting $ 25,000
>Admini strati ve Staff $750,000
Total $2,000,000
Revenue Per Employee Revenue Per Employee
•Hourly Billing Rate ; Annual Salary of $60,000
Cost Per Hour $30.77
Benefits @ approx 28% $ 8.74
Overheads @ approx 73% $28.75
Profit @ 10% $ 6.74
Total Hourl y Rate $75.00
•Salary Multiplier = 2.45
•Available Chargeable Hours per year = 1950 hrs x 70% = 1365 hrs
•Annual Revenue per Chargeable Employee approx = $100,000
Profit Margins Profit Margins
• Pre-tax profit is approximately 10% of fee revenue.
• Net profit after tax is 5% to 6% of revenue.
• How the profit is used:
• Risk coverage
• Change in technology
• Funding growth in receivables
• Investment in infrastructure
• Investment in the community
• Return to shareholders
3
“ Val ue ” “ Val ue ”
The client pays based on value received
Trends in Consulting Engineering Trends in Consulting Engineering
•Consulting Supports a Client’s Business Growth
•Requires more than techni cal knowledge
•Consulting is a Global Industry
•International Competition
•Multi Cultural Experience
Alternati ve Forms of Project Deli very
•Conventional Design and Tender
•Design and Construct
•BOO, BOT, BOOT
• Public Private Partnerships
•Performance Based
•Multi-Project Partnering
Trends in Consulting Engineering Trends in Consulting Engineering
The Structure of Consulting Firms is Changing.
•Consolidation – Mergers & Acquisitions
•Program Management
•Niche Specialization
Trends in Consulting Engineering Trends in Consulting Engineering
A Focus on People
•Career Planning and Training
•Work Environment
•Security and Benefits
•Compensation
Trends in Consulting Engineering Trends in Consulting Engineering
•Excellent verbal and written communication skills
•Anal ytical ability tempered with an understanding of
design process
•Mental Energy – Being Thorough in your work
•A network of peers
•Willingness to learn from the experience of others
•Continuous Learning & Professional Development
Necessary Skills for Consulting Engineering Necessary Skills for Consulting Engineering
4
Listening
•Effective Listening is the most important communication skill.
•Einstein's Formula for Success in Life :
Success = X + Y + Z
X = hard work
Y = having fun
Z = “ keeping your mouth shut” or preferabl y
“ use it with care” (Amended by A. Duncan)
Necessary Skills for Consulting Engineering Necessary Skills for Consulting Engineering
•Excellent verbal and written communication skills
•Anal ytical ability tempered with an understanding of
design process
•Mental Energy – Being Thorough in your work
•A network of peers
•Willingness to learn from the experience of others
•Continuous Learning & Professional Development
Necessary Skills for Consulting Engineering Necessary Skills for Consulting Engineering
“ The mere formulation of a problem is far
more essential than its solution, which
may be merely a matter of mathematical
or experimental skill. To raise new
questions, new possibilities, to regard old
problems from a new angle requires
creative imagination and marks real
advances in science.”
Albert Einstei n
“ The mere formulation of a problem is far
more essential than its solution, which
may be merely a matter of mathematical
or experimental skill. To raise new
questions, new possibilities, to regard old
problems from a new angle requires
creative imagination and marks real
advances in science.”
Albert Einstei n
•Excellent verbal and written communication skills
•Anal ytical ability tempered with an understanding of
design process
•Mental Energy – Being Thorough in your work
•A network of peers
•Continuous Learning & Professional Development
•Willingness to learn from the experience of others
Necessary Skills for Consulting Engineering Necessary Skills for Consulting Engineering
5
“ you must learn from the mistakes of
others. You can’t possibly live long
enough to make them all yourself.”
Sam Levenson
“ you must learn from the mistakes of
others. You can’t possibly live long
enough to make them all yourself.”
Sam Levenson
•Integrity
•Imagination
•Flexibility, enthusiasm and energy
•Compassion
•Courage
•Instinct
Necessary Skills for Consulting Engineering Necessary Skills for Consulting Engineering
“ Experience is a great teacher.
The only trouble is that you get the
tests before you learn the lessons”
- Bulent Eczacibasi -
“ Experience is a great teacher.
The only trouble is that you get the
tests before you learn the lessons”
- Bulent Eczacibasi -
•Integrity
•Imagination
•Flexibility, enthusiasm and energy
•Compassion
•Courage
•Instinct
Necessary Skills for Consulting Engineering Necessary Skills for Consulting Engineering
“ All the mistakes I ever made were
when I wanted to say ‘No’ and said ‘Yes’.”
Moss Hart
“ All the mistakes I ever made were
when I wanted to say ‘No’ and said ‘Yes’.”
Moss Hart
6
•Established in 1988
•Employee Owned
•Staff of 200 Engineers and Support Personnel
•British Columbia Company based in North Vancouver
•Offices in Kitimat, Seattle and Portland
Corporate Information Corporate Information
•Port and Marine Terminal Planning and Design
•Maritime Structures
•Industrial Structures
•Offshore and Arctic Structures
•Industrial Site Servicing
•Bulk Materials Handling Systems Planning and Design
•Underwater Inspection Services
•Engineering Economics and Operations Simulation
Services Services
Mining and Materials Handling Mining and Materials Handling
Wol verine Coal Project
•2.4 million tonnes per year
•Approx. $250 Million investment.
•Complete EPCM servi ces.
•Ci vil
•Rail
•Power & Site Electrical
•Materials Handling Systems
• Construction Management
•15 Month Fast Track Schedule
•Scheduled completion Jul y 2006
Vancouver Convention Centre Expansion
Structures Structures
•43,000 Square Metre Marine
Structure Foundation
•Comprehensi ve Test Program of
Pile, Densification, Pits and Drill
Holes
•Over 800 Dri ven Steel Pipe Piles
With 1000 Tonne Ultimate Capacity
•Fast-tracked design and
construction
Hutchison Ports Mexico Hutchison Ports Mexico
Lazaro Cardenas (Mexico):
Container Terminal Development
•EPCM Services
•700 mof Quay Deck
•Container Storage Yard
•On Dock Intermodal Yard
•Total Capacity 1.9 M TEU’s per annum
7
• Location: B.C.
• Services: Detail Design,
Procurement and
Field Services
• Features:
• Fast Track Redesign and
Replacement of Two Collapsed
Quadrant Shiploaders
• Ist in Operation Jul y 4, 2003
• 2
nd
in Operation August 11, 2003
• $18 M Capital Cost
Westshore Terminals Westshore Terminals
• Condition Assessments & Repair
• Detailed Design of New Structure
• Contract Preparation & Negotiation
• Province’s Representative Services
William R. Bennet Bridge
Kelowna B.C.
3 P Delivery
British Columbia Ministry of Transportation British Columbia Ministry of Transportation
• Preliminary Design and
Construction Specifications for 3 Berths;
• Concentrate Shiploading,
• General Cargo
• Construction
• Desi gn Revi ew of EPC Contract
• Detailed Wave and Ship Motion Anal ysis
using Computer Based Numerical Models
• Concept Design of Shiploader
Fluor Daniel International : Batu Hijau Mine, Indonesia
• Desi gn Revi ew of Construction Berth
Newmont Mining Newmont Mining
CONCLUSION & EDITORIAL CONCLUSION & EDITORIAL
“ …when I say imagination I mean the
capacity to see all sides of a subject and
weigh all possibilities; I don’t mean
fantasy and poetry and moonshine;
imagination is a good horse to carry you
over the ground, not a flying carpet to set
you free from probability.”
Robertson Davies
“ The Manticore”
“ …when I say imagination I mean the
capacity to see all sides of a subject and
weigh all possibilities; I don’t mean
fantasy and poetry and moonshine;
imagination is a good horse to carry you
over the ground, not a flying carpet to set
you free from probability.”
Robertson Davies
“ The Manticore”
“ A sense of nobility in your
work is the only lasting motivation.”
Tom Morris
Notre Dame Philosophy Professor
“ A sense of nobility in your
work is the only lasting motivation.”
Tom Morris
Notre Dame Philosophy Professor
8
•Total number of
employees working for
ACEC firms in Canada
is54,179.
•Almost 70% of firms
employ 50 or less.
•Most firms employ
between 1 to 10
professionals with only
14% of the firms
employing 50 or more.
Firm
Size
Total Employees
(Thousands)
9
•Total revenue for 2001
for ACEC firms is
estimated at $6.3
Billion.
•BC based firms
account for
approximately $1.0
Billion in revenue.
•A percentage of the
revenue is derived from
employees working
outside of the province
or the country.
Vancouver Wharves: Berth 4 Shiploader Reconstruction
•2 x 3000 TPH Quadrant Loaders
•Project Management as well as Structural and Mechanical Re-Design to
Current Codes
Bulk Terminals Bulk Terminals
10
Westshore Terminals : Ongoing Engineering Services
•Complete Rebuild of Berth 2
Shiploaders
Bulk Terminals Bulk Terminals
•Berth 2 Surge Bin Rebuild
•Continuous innovation and improvements in production and efficiency.
Pacific Coast Terminals: New Sulfur Shiploading System
•4.5M TPY – 5,000 TPH
•Full Desi gn and Project
Management
•Shiploader Procurement
• Structural / Mechanical Desi gn of
Conveyors, Shiploader, Support and
Ship Berthing Structures
Bulk Terminals Bulk Terminals
Vancouver Wharves: Integrated Sulphur Project
•Sulphur Recei ving, Storage and
Reclaim
•1.5 MTPY – 5,000 TPH
•Rotary Rail Car Dumper Procurement
•Structural and Mechanical Desi gn
of Conveyors, Storage Bins, and
Dumper Vault
Vancouver Wharves Vancouver Wharves
“ If you can see, look.
If you can look, observe.”
- from the book of Exhortations -
“ If you can see, look.
If you can look, observe.”
- from the book of Exhortations -
WorkSafeBC and Engineers
George Matheson, P. Eng.
WorkSafeBC
(Workers Compensation Board of BC)
November 2005
Overview
• What is WorkSafeBC (WCB)?
• Workers Compensation Act and Regs
• Federal/Provincial Split
• Public Safety/Worker Safety
• Codes/standards and law
• Responsibilities for Health & Safety
• Cost of an accident
What is a WCB?
• statutory provincial agencies
• basically an insurance system
• cover work-related injury or disease
• funded by employers
• no fault coverage
• worker cannot sue employer/other worker
Functions of WorkSafeBC
• prevention (health and safety)
• compensation - administer claims for
injuries or occupational disease arising out
of work activity
• fund the system
(Note in other provinces the WCB generally
only does the last 2 functions.)
Prevention
• Aim is to prevent injuries and disease
• Health and safety legislation
• Education and awareness
• Consultation
• Enforcement (inspections/sanctions)
• Investigations
Compensation
• Pay health care cost
• Pay wage loss
• Pay for rehabilitation and return to work
• If permanently disabled, pay a pension for
loss of earnings or loss of function
• If a worker dies, spouse and dependant
children receive pension benefits
Funding of WC System
• Employers pay assessments
• a percentage of gross payroll
• No funding from government
• no tax revenue
• Investment portfolio (reserves capitalized to
cover pensions)
• earns interest income
Sample Assessment Rates
(2005)
• Manual tree falling 10.52
• Sawmill 4.05
• Heavy construction 13.44
• Building const. (non-residential) 7.19
• Geoscience field work 3.25
• Land surveying 1.24
• Consulting engineering 0.29
Experience Rated Assessment
Example:
Base Industry Rate = $6
Poor 100% Up to
Safety surcharge $ 12
Improved 50% Down to
Safety discount $ 3
Workplace Health and Safety Law
• Workers Compensation Act (in particular
Part 3) and the OHS Regulation set the
requirements for worker health and safety
under WorkSafeBC jurisdiction
• GOOD NEWS: generally the requirements
for health and safety are similar in other
provinces and in the United States
WC Act and OHS Regulation
• Laws for workplace health and safety
• Set minimum standards
• Adopt national/international standards
WC Act/OHS Regulation apply
• To most provincial undertakings
• factories, plants, shops
• construction, renovation, demolition
• service and maintenance activity
• retail, warehouse, schools, government
• roads, power, water, public works
• agriculture
Part 3 of Act and OHS Regulation
do not apply to:
• Federally regulated undertakings
• Mining operations in BC
WorkSafeBC administers claims and collects
assessments for operations regulated
federally and for mines.
Federal Jurisdiction
Federally regulated undertakings
(Labour relations – federal labour code)
• Human Resources and Skills Development
Canada - Labour Programs Office
Note claims administered provincially!
Other Health and Safety
Legislation
Public safety legislation
• Requirements exist federally and provincially
• Applies to workers as well as public
• Enforced by various agencies
We often take such standards for granted!
Public Safety Legislation
Examples
• Building code/fire code
• BC Safety Standards Act (electrical, gas, etc.)
• Motor vehicle safety standards
• Consumer product laws
BC Safety Authority
Codes/Standards vs Law
• Codes/standards
• usually developed through a consensus process
• development process and publication
administered by an organization, for example:
•Canadian Standards Association (CSA)
•American National Standards Institute (ANSI)
•National Fire Protection Association (NFPA)
Codes/Standards vs Law
• A code/standard only becomes a “legal
requirement” if it is incorporated by
reference in legislation (regulation/bylaw.)
• Example #1
• National Building Code is adopted (with some
amendments) as the BC Building Code, and is
the building bylaw in BC (except Vancouver).
Codes/Standards vs Law
• Example #2
• The CSA standard for mobile cranes is
incorporated into the OHS Regulation [Section
14.2(4)] making it a requirement for such
cranes used in workplaces under WorkSafeBC
jurisdiction.
Responsibility for workplace
health and safety
• Owner/Employer
• Corporate/site safety program
• Supervisors
• Workers
• J oint Committee (H&S Committee)
• Suppliers
Responsibility H&S on a multi-
employer worksite (construction)
• Owner
• Prime Contractor
• Subcontractors/sub-trades
• Consultants
• Workers
• Suppliers
Multi-employer site
• Owner/Prime Contractor
• Coordinates site safety
• Monthly meeting (all trades)
• Ongoing inspections (Site management/CSO)
• Subcontractors
• Each has own corporate safety program
• Weekly “tool box” meetings at site
• Ongoing inspections (site supervisor)
Pre-qualifying/Tendering
• Project owners now often require general
(prime) contractors provide evidence of an
established safety program as part of
eligibility to bid.
• Record with WorkSafeBC considered.
• Prime contractors require subcontractors to
have a safety program.
Engineer’s responsibility
• Arises in 2 ways in the workplace
• as an employer representative
•either as an owner or supervisor of work
• as the engineer responsible for engineering
work required under the WC Act or OHS
Regulation, either as an
•company employee and engineer
•consulting engineer
Engineer as Owner/Supervisor
• Represent the employer in the workplace
• Responsible for more than
engineering/technical things, such as
• health and safety program
• worker training and instruction
• controlling work activity
Engineer Responsible
• Certification of structures, machines or
equipment
• Design/specify criteria
• Oversee work
• Certify work has been properly completed
Engineer Responsible
• Certification of procedures or processes
• Excavation
• Complex crane lifts
• Structural erection (bridges, buildings)
• Tilt-up construction (lifting/temp. bracing)
• Concrete formwork (flyforms)
• Confined space entry
• Machine/process design
• Marine load rating required
• List indicators required
Your personal safety
• Site Orientation
• be aware of inherent hazards at the site
• Personal protective equipment
• set a good example for others
• Be careful around hazardous activities
• moving equipment
• overhead loads/overhead work
Refusal of Unsafe Work
A person must not carry out or cause to be
carried out any work process or operate or
cause to be operated any tool, appliance or
equipment if that person has reasonable cause
to believethat to do so would create an undue
hazard to the health and safety of any person.
(OHS Reg. s. 3.12)
Refusal of Unsafe Work
Procedure for refusal :
• Report unsafe condition to supervisor/employer.
• Supervisor must investigate matter
• Situation unresolved, further investigation with worker
representative.
• Still unresolved, contact a WorkSafeBC office
Note: employer can not discriminate against a worker
who follows these procedures.
Engineering in health and
safety
• Fall protection/scaffolds/ladders
• Construction/demolition
• excavation work
• concrete formwork
• falsework
• tilt-up construction
• erection procedures/temporary bracing
Roof truss collapse during construction
Roof truss collapse during construction
Engineering in health and
safety continued
• Cranes
• load testing bridge/overhead/gantry cranes
• annual certification of mobile cranes/boom
trucks/tower cranes
• repair following an incident, such as power line
contact, overloading, vehicle crash
Needs recertification!
Engineering in health and
safety continued
• elevating work platforms (vehicle mounted
and self-propelled)
• confined space entry
• machine design/safeguarding/process
control
• noise and vibration
• ventilation (mainly contaminant control)
Testing backward stability after accident
Engineering requirements
• Engineering certification of things
(structures, equipment, repairs)
• Certification is required for the completed
work.
Engineering requirements cont’d.
Common problem:
The engineer will design/specify the criteria,
but may not be engaged to oversee the work
and provide a certification the work has
been fully and properly done.
Engineering requirements cont’d.
• If your scope of involvement is limited to
providing only the design/specification, in
your documents and discussion, make it
clear to your employer/client there is a need
for additional engineering involvement as
the work proceeds, to meet WC Act and
OHS Regulation.
Engineering requirements
• Engineered procedures
(excavation work, complex erection schemes,
complex crane lifts, major maintenance)
• engineering must be done before work starts
• work may need to be done in stages following
an engineer’s certified plan and schedule
• the documents must be available on site
Engineering Certifications
• Conform to WC Act,
OHS Regulation and
good engineering
practice
• Clear and complete
• Sealed, signed and dated
Adequate paperwork?
Mistakes can happen
Cost of an Accident?
Lost production
• Work stops/everyone has a look
• Employer investigation
• WorkSafeBC investigation
• Replace critical materials
• Replace key equipment
• Project schedule disrupted
Crane collapse due to operator error
Summary
• What is WorkSafeBC (WCB?)
• WC Act and OHS Regulation
• Federal/Provincial Split
• Public Safety/Worker Safety
• Codes/standards and law
• Responsibilities for health and safety
• Cost of an accident
Questions?
Contact the Engineering Section
WorkSafeBC
Telephone 604-276-3114
Fax 604-279-7407
WorkSafeBC’s Internet Site
www.worksafebc.com
www.healthandsafetycentre.org
1
UBC APSC 450 November 15,
2005
Engineering &
Geoscience
A Guide to the
Professions in B.C.
Gillian Pichler, P.Eng
Director, Registration
Ross Rettie, P.Eng.
Director, Professional
Practice and Ethics
www.apeg.bc.ca
1. A MAJ OR PART OF THIS PRESENTATION WILL DEAL WITH THE
PRACTICE REVIEW PROCESS, WHICH IS HOPEFULLY THE ONLY
ONE OF THESE THREE TOPICS THAT ANY OF YOU WILL
ENCOUNTER IN YOUR PROFESSIONAL LIFE.
2. THE DISCIPLINE PROCESS, IN ADDITION TO THE INVESTIGATION
OF COMPLAINTS AGAINST MEMBERS FOR POSSIBLE BREACHES
OF THE ACT OR BYLAWS, INCLUDES THE INQUIRY HEARING
PROCEDURE USED TO DETERMINE IF A MEMBER HAS IN FACT
BREACHED THE ACT OR THE BYLAWS.
3. THE ENFORCEMENT PROCESS, IN ADDITION TO THE
INVESTIGATION OF COMPLAINTS AGAINST NON-MEMBERS FOR
POSSIBLE BREACHES OF THE ACT, INCLUDES THE COURT
APPLICATION PROCEDURE USED TO OBTAIN A COURT ORDER
RESTRAINING THE PERSON FROM CONTINUING TO BREACH THE
ACT.
4. THE PROFESSIONAL PRACTICE SIDE OF THE PROFESSIONAL
PRACTICE AND ETHICS DEPARTMENT ALSO SPENDS A LARGE
AMOUNT OF TIME PROVING ADVICE TO MEMBERS TO TRY TO
HELP THEM AVOID GETTING INTO TROUBLE ON THE
INVESTIGATION/DISCIPLINE SIDE. SO REMEMBER “ CALL
BEFORE YOU DIG” YOURSELF INTO A HOLE. REGULAR ADVICE IS
ALSO PROVIDED TO AUTHORITIES HAVING J URISDICTION AS
WELL AS TO MEMBERS OF THE PUBLIC.
2
The Plan for Today:
1. Professions in Canada
2. Canada’s Engineers
Unite
3. The Profession in BC
4. The Route to P.Eng.
5. P.Eng. ‘Plus’
6. Professional Practice &
Ethics
7. …and more
3
Professions in Canada:
What’s a Profession?
A field that requires extensive study and
mastery of specialized knowledge
For example:
Law
Medicine
Accounting
Engineering
4
Professions in Canada:
Characteristics
Stringent Entry Requirements
Academic
Experience
Peer Oversight
Practice Standards
Practice Inspection
Continuing Competence
Specialization
5
Professions in Canada:
A (very) short history lesson
BNA Act of 1867
• Created Canadian Confederation
• Defined the split of power
between two levels of
government, federal and
provincial
• Regulation of professions became
a provincial/territorial
responsibility
6
Engineering in Canada:
A short history lesson
Then…
• 1910’s..Engineering Failures
(e.g.Quebec Bridge)
• 1919…representatives from the
Engineering Institute of Canada
created Model for Provincial
Legislation to protect the public
from “ Quackery” & “ Charlatans”
• 1920 Regulation of BC Engineers
7
Engineering in Canada:
A short history lesson
Similarly…
• Other provinces & territories
introduced similar legislation and
• In 1936 the Canadian Council of
Professional Engineers was formed
By the provincial & territorial
organizations to provide
coordination of programs,
standards, practice
8
More on CCPE
• Accredits University programs
• Provides national guidelines for
qualification and practice
• Facilitates National Mobility
• Negotiates international agreements
• Researches trends in the profession
• Liaison with Federal Government
9
Engineering Regulation in
British Columbia:
1920 fast fwd to 1990
• 1920 - APEBC created by Act of
Legislature to Regulate The Practice
of Engineering
Defined “ Engineering”
Provided Exemptions
Gave Framework for Licensing, Discipline and
Enforcement
Governed by a Council elected by Members
• 1990 - Geoscience Added to create
APEGBC
10
Canada’s
Professional Engineers/ingénieur(e)s
• 172,000 (2002 survey)
• Includes students, retirees, an
multiple memberships
• BC has 11%
• By Discipline across Canada
•Civil 20%
•Electrical 16%
•Mechanical 16%
11
Canada’s
Professional Engineers/ingénieur(e)s
•‘Newer” disciplines
•Software
•Biosystems
•Engineering Management
12
Canada’s
Professional Engineers/ingénieur(e)s
• Major Employers
•Professional Services
(consulting) 24%
•Manufacturing 22%
•Resources 12%
•Utilities 9%
•Construction 9%
• 10% are self-employed
13
Canada’s
Professional Engineers/ingénieur(e)s
• Age
•<16% are under 30
•>50% are under 43
• 25% are over 50
•Major Employers
14
APEGBC – How It’s Run
Through the Act of the
Legislature that requires
A Council with
14 APEGBC Members
chosen by the
Membership; and
4 non-APEGBC members
appointed by the
Provincial Government
15
Association Governance
Government responsible for public safety
(delegates via the Act)
Members
(Responsibility & Authority)
Elected & Appointed Council
(Governance)
Staff
(Management)
16
APEGBC isits members
Members
Are elected to Council to
Set Policy
Provide Strategic Direction
Make Financial decisions
on behalf of the Members
Report back to the owners
of its legislation:
BC Government
17
APEGBC isits members
Members
Volunteer (1,000+)
Develop Policy through
Committees/Boards
Develop National Policy at CCPE
Represent professions on
outside Boards
Review Qualifications
Practice Reviews
Investigations
18
APEGBC The Membership
At a Glance
~ 22,000 Members & Licensees
16,300 P.Eng.
1,100 P.Geo.
1,800 EIT
100 GIT
40 Limited Licensees
2,600 Student (MAPS)
17,000 (92.4%) of non-student
members are men
(National Average is 92%)
19
APEGBC The Membership
At a Glance
~ 22,000 Members & Licensees
2,900 live elsewhere in Canada
2,700 live outside of Canada
~ 30% have post-graduate
degrees (mostly MEng, MSc)
of ‘first time’ P.Eng./P.Geo.
Applications each year
45% have non-Canadian
degrees
20
The Route to P.Eng.
…a reminder
The Iron Ring
Conferred at Graduation
By Corporation of the Seven
Wardens
Independent Body
Not affiliated with licensing
body
Does not mean Professional
Engineer with practice rights
Ritual reminds of societal
obligations
21
The Route to P.Eng.
1. Education
Accredited Bachelors Degree or
‘Equivalent’ or
Examinations
2. 4 Years Satisfactory Experience
under Professional Supervision
1 year in ‘Canadian Environment
3. Law & Ethics
Seminar
Professional Practice
Examination
4. Good Character
22
The Route to P.Eng.
Experience, Training, Development
gain variety of experience
progress in responsibility
apply knowledge in different
situations
know limitations
use judgment
23
The Route to P.Eng.
Experience, Training, Development
Satisfactory Engineering
Experience
• Application of theory
• Practical Experience
• Management of Engineering
• Communication Skills
• Social Implications of
Engineering
24
The Route to P.Eng.
Support for the Member-in-Training
• Mentoring Program
• APEGBC or Employer-
Based
• Peer Advice from outside
‘chain of command’
25
The Route to P.Eng.
Support for the Member-in-Training
• Online Experience Reporting
& Feedback
• Member in Training,
Supervisor, Reviewer
participate
• Credit and advice on
progress
• Begins with 2
nd
year Co-op
26
The Route to P.Eng.
Support for the Member-in-Training
Continuing Professional
Development
CPD Policy and Guide supports
members’ life-long learning
Web-based CPD Database of offerings
Over 50 APEGBC-sponsored events
On-line CPD Activity Recording Centre
APEGBC offerings focus on technical
as well as business/personal skills
Discounted courses from outside
agencies
27
The Route to P.Eng.
Support for the Member-in-Training
Branches & Divisions
• Networking, Training,
Policy and Social
• Geographic Branches
around Province
• Special Interest Divisions
28
The Route to P.Eng.
Support for the Member-in-Training
In the Works (2006/7)
•Accredited Employer-
Based EIT ProgramsS
•Competency-Based
•‘Guaranteed’ Registration
29
The Route to P.Eng.
What Employers Tell Us They Want fromToday’s
Engineer:
excellent and specialized skills, depth of
experience; hands-on skills
Enthusiasm, ambition, intelligence, positive
attitude, ability to ‘fit in’ and ‘come up to speed’
quickly
Customer service, communications, business
development skills
Good English Language Skills
Understanding of the Industry
Willingness to relocate
Outside confirmation of abilities (references,
peer recommendation)
30
The Route to P.Eng.
Experience, Training, Development
References – who can give
them?
• P.Eng/P.Geo.
• Equivalent for work outside
Canada
• Others assessed on case-
by-case basis
31
One Year in a
‘Canadian
Environment’
Outside Canada- may be
credited, where there is a
strong demonstration of good
knowledge of certain elements:
32
Elements
Canadian laws,
Climates,
Codes,
Conditions,
Customs,
Practices, and
Standards
33
How Experience is
Reported and
Reviewed
In a chronological format
Describe what you did
34
Keys to a good
chronology:
record: job title,
company’s name, and
supervisor’s name/title
35
…More Keys
Give a description of
the work you did.
•Including details
of responsibilities
36
…Still More
how did you do it?
methods,
resources,
options considered,
standards/codes, etc.
37
And finally
New knowledge
gained
Lessons learned
Brief overview of
project
No overlapping
periods
Explain any gaps
38
Online Reporting
(Spring 2003)
What is it?
Allows student members
and EITs to record
experience and to submit
it for review each 6
months
39
Online Reporting
Who reviews it ?
Supervisor verifies it
APEGBC reviewer gives
comments and
experience credit
40
Online Reporting
1-2 summaries per 12 month
period
Do a 2
nd
summary if you
change employers
Do a separate summary for
Masters thesis (abstract)-
possible 1 year credit
41
Online reporting
What happens with results?
Given to student/EIT
Credits are accumulated
until 42 months-then
application for P.Eng is made
at 48 month point
42
What does not
count
Unsupervised work
Work unsupported by
academic foundation
No application of theory
43
What does not
count
No evidence of follow
through from concept to
implementation
Work only in review of
others’ work
No progression of
responsibility
44
What does not
count
Insufficient understanding
of personal/professional
limitations
Pure science, not applied
science
45
And finally
Level – ‘cookbook
engineering’
No experience in Canadian
Environment (Masters,
PhD in Canada does not
count)
46
What Counts
Work in related fields
Pre-grad/Co-op
experience
47
What Counts
Types of Experience
Postgraduate research
Teaching
Work outside Canada
48
Pre-Graduation Experience
•After second of four years
•Verified by P.Eng
•Meet experience criteria
•Max of 12 months credit
49
What Counts
Specific to Discipline
Examples
•Guidelines –Software
Engineering
•Environmental
Engineering
50
The Professional
Practice Exam
When can you write the
exam?
Rule of Thumb 3 years
from degree
Written Quarterly
Multiple Choice and Essay
51
Law & Ethics Seminar
Available in Person & CD
Rom version
tfrazer@apeg.bc.ca
52
Questions?
53
UBC APSC 450 November 15,
2005
PROFESSIONAL
PRACTICE &
ETHICS
Ross Rettie, P.Eng.
Director, Professional
Practice and Ethics
APEGBC
PRIMARY RESPONSIBILITIES ARE:
1. INVESTIGATION OF COMPLAINTS AGAINST MEMBERS OF THE
ASSOCIATION RELATING TO BREACHES OF THE ACT, THE
BYLAWS OR THE CODE OF ETHICS;
2. THE INVESTIGATION OF COMPLAINTS AGAINST NON-
MEMBERS OF THE ASSOCIATION RELATING TO BREACHES OF
THE ACT.
3. OF NECESSITY, I’M FAMILIAR WITH THE PRACTICE REVIEW
PROCESS AS SOME PRACTICE REVIEWS HAVE RESULTED IN
COMPLAINTS BEING FILED BY THE PRACTICE REVIEW
COMMITTEE IN CASES WHERE A MEMBER’S PRACTICE WAS
FOUND TO BE BADLY OUT OF COMPLIANCE WITH THE
EXPECTED STANDARD.
4. I EMPHASIZE THE WORD “BADLY” AS, IN THE VAST MAJORITY
OF THE REVIEWS CONDUCTED TO DATE, THE MEMBERS’
PRACTICES HAVE BEEN FOUND TO BE IN COMPLIANCE OR
SIMPLY IN NEED OF SOME IMPROVEMENT TO BE IN
COMPLIANCE.
54
Professional Practice & Ethics
Topics of Discussion:
1. Practice Review
2. Discipline Process
3. Enforcement
55
1. Practice Review
Selection Process…
1. Random Basis
2. Council Request
3. Disciplinary Requirement
4. Voluntary Request
APEGBC FUNDED
MEMBER FUNDED
1. THE NAMES OF MEMBERS ELIGIBLE FOR A PRACTICE REVIEW ARE
MAINTAINED ON AREA OF PRACTICE DATA BASES AND MEMBERS ARE
SELECTED ON A RANDOM BASIS; OR
2. IF THE ASSOCIATION BECOMES AWARE OF A POSSIBLE PROBLEM WITH A
MEMBER’S PRACTICE THEN COUNCIL CAN DIRECT THAT A REVIEW BE
CONDUCTED ON THAT MEMBER. IN THE TEN YEARS SINCE THE INCEPTION
OF THE PRACTICE REVIEW PROGRAM THERE HAVE BEEN SIX COUNCIL
DIRECTED REVIEWS.
3. THE DISCIPLINE COMMITTEE, AFTER AN INQUIRY HEARING, CAN ORDER
THAT A MEMBER BE SUBJECT TO A REVIEW AT THE MEMBER’S EXPENSE,
WITH AN ESTIMATED COST OF $2,000. IN THE TEN YEAR LIFE OF THE
PRACTICE REVIEW PROGRAM THERE HAVE BEEN TWELVE ORDERED
REVIEWS; OR
4. A MEMBER CAN REQUEST A REVIEW OF THEIR PRACTICE, WHICH IS AT
THE MEMBER’S EXPENSE. IN TEN YEARS THERE HAVE BEEN TWO
REQUESTS.
56
1. Practice Review
Three Outcomes…
☺ Compliance
Requires Improvement
Investigation
1. THE MEMBER’S PRACTICE IS FOUND TO BE IN COMPLIANCE WITH THE
EXPECTED STANDARD OF PRACTICE FOR A REGISTERED PROFESSIONAL; OR
2. THE MEMBER’S PRACTICE IS GENERALLY IN COMPLIANCE WITH RESPECT TO
THE PRODUCT BUT REQUIRES IMPROVEMENT IN SOME SPECIFIC AREAS OF
PROCESS. IN THIS EVENT THE MEMBER IS REQUIRED TO SUBMIT A
PROPOSAL ON THE STEPS THAT WILL UNDERTAKE CHANGE TO BRING THE
MEMBER”S PRACTICE INTO COMPLIANCE. IF THE PROPOSAL IS ACCEPTED
BY THE PRACTICE REVIEW COMMITTEE THE MEMBER WILL BE SUBJECT TO
A FOLLOW UP REVIEW IN TWELVE MONTHS; OR
3. THE MEMBER’S PRACTICE IS NOT IN COMPLIANCE WITH THE EXPECTED
STANDARD OF PRACTICE IN SIGNIFICANT WAYS WHICH MAY INCLUDE
SERIOUS DEFICIENCIES IN THE ENGINEERING?GEOSCIENCE PRODUCT AND
THE PRACTICE REVIEW COMMITTEE FINDS THAT THE DEFICIENCIES ARE
SUFFICIENT TO WARRANT FILING A COMPLAINT WITH THE
INVESTIGATION COMMITTEE. IN THE TEN YEAR LIFE OF THE PRACTICE
REVIEW PROGRAM THIRTY COMPLAINTS HAVE BEEN FILED BY THE
PRACTICE REVIEW COMMITTEE.
57
Considering all disciplines
together:
68% In Compliance
24% Required Improvement;
and
8% Referred to Investigations
1. Practice Review
INITIAL PRACTICE REVIEW STATISTICS
58
Considering only structural
engineering:
52% In Compliance
34% Required Improvement;
and
14% Referred to Investigations
1. Practice Review
INITIAL PRACTICE REVIEW STATISTICS
59
Current Council Random Selection Focus:
Structural EOR 30%
Mechanical EOR 10%
Electrical EOR 10%
Other EOR (Geotech, Fire Protection) 20%
Forestry Sector 5%
Geoscience 5%
Building Envelope 5%
Environmental Engineering Consulting 5%
Environmental Geoscience Consulting 5%
General Membership 5%
1. Practice Review
60
Considering all disciplines together:
80% In Compliance;
17% Need Improvement; and
3% Referred to Investigations
1. Practice Review
CURRENT PRACTICE REVIEW STATISTICS
61
Considering only structural engineering:
67% In Compliance;
26% Need Improvement; and
7% Referred to Investigations
1. Practice Review
CURRENT PRACTICE REVIEW STATISTICS
62
Common Practice Deficiencies
Lack of implementation of Quality
Assurance Bylaws Involving:
Design files
In-house design checks
Concept reviews of structural
designs
Field reviews of designs by
members
1. Practice Review
63
Common Practice Deficiencies (Cont.)
Improper or lack of seismic design for
structures including:
Failure to meet Building Code;
Failure to beware of seismic design
requirements
Lack of shear wall provision when
required, particularly
in wood frame multi-family
residential construction
1. Practice Review
64
1. Practice Review
Common Practice Deficiencies (Cont.)
Failure to use seal in accordance
with Section 20(9) of the Act
Failure to disclose Professional
Liability Insurance Coverage in
accordance with Bylaw 17
65
Two Part Process…
Investigation (Confidential)
Discipline (Public)
2. Discipline Process:
Members
66
Complaints against Members
Review of complaint
Report to Investigation
Committee
Consideration by Investigation
Committee
2. Discipline Process:
Members
INVESTIGATION COMMITTEE
C
O
N
F
I
D
E
N
T
I
A
L
67
C
O
N
F
I
D
E
N
T
I
A
L
Reasonable and probable
grounds to believe:
a breach of the Act, Bylaws
or Code of Ethics; or
unprofessional conduct,
negligence or incompetence
INVESTIGATION COMMITTEE
2. Discipline Process:
Members
INVESTIGATION COMMITTEE”S TEST IS:….
68
C
O
N
F
I
D
E
N
T
I
A
L
Outcome:
File closed with no further action
File closed with recommendation
File passed to Discipline
INVESTIGATION COMMITTEE
2. Discipline Process:
Members
69
C
O
N
F
I
D
E
N
T
I
A
L
2. Discipline Process:
Members
DISCIPLINE
Legal Counsel prepares Notice
of Inquiry
Offer of Stipulated Order
70
P
U
B
L
I
C
Notice of Inquiry issued
Inquiry Hearing
Discipline Panel J udgment
Case published including
penalty
2. Discipline Process:
Members
DISCIPLINE
71
Outcome:
Not Liable
Liable
Penalties (including Fines)
Conditions
Costs
Recourse:
Act Section 39 – Appeal
INQUIRY HEARING
2. Discipline Process:
Members
72
85
89
9
0
107
120
124
115
144
131
124
161
108
82
99
106
95
4 6
8
3 7 6
10
30
6
5 6 5 5
0
20
40
60
80
100
120
140
160
180
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
YEAR
N
U
M
B
E
R
Investigation
Discipline
2. Discipline Process:
Members
73
Prohibition on practice
Use of title
Practice by an individual
Practice by a company/entity
Use of a restricted word
3. Enforcement:
Non-Members
74
Action:
Request Voluntary Compliance
Confirmation of Compliance
Continued Non-compliance
Letter from legal counsel
Application for Injunction
Constraining Order
Costs and Fines
3. Enforcement:
Non-Members
75
Code of Ethics Code of Ethics
1. Public Interest
2. Know your limits
3. Don’t fake it
4. Conflict of interest
5. Respect your value
6. Lifelong learning
7. Do unto others…
8. Stand your ground
9. Be Brave
10. Spread the Word
76
Discipline Cases
CHARGE:
Electrical Engineer…does
Structural Design Incompetently…
PENALTY:
- Reprimand
- Forced Retirement
- Return of Seal
77
Discipline Cases
CHARGE:
Fraud…Engineer pleads guilty
to Income Tax and GST
payments evasion…
PENALTY:
Membership Revocation
78
Discipline Cases
CHARGE:
Civil Engineer fraudulently signs
faulty/inaccurate payment
certificates on construction
project and also has a serious
conflict of interest.
PENALTY:
Twelve Months Suspension
plus Conditions
79
Discipline Cases
CHARGE:
Fraud …Engineer forges
signature on performance bond.
PENALTY:
Membership Revocation
80
Discipline Cases
CHARGE:
Civil Engineer…undertakes
project without the necessary
training or experience…
design deficiencies…
PENALTY:
Six Months Suspension
81
Discipline Cases
PENALTY:
Membership Revocation
CHARGE:
Fraud …Engineer steals $ 2 m in
bonds…cashes $ .6 m in
coupons…attempts to sell $ .2 m of
bonds
82
Discipline Cases
CHARGE:
Mechanical Engineer…incompetently
and negligently undertakes structural
design of building…without lateral
restraint…disregarding protection of
the public.
PENALTY:
Fourteen Months
Suspension plus Conditions
83
Discipline Cases
CHARGE:
Mechanical Engineer…gives
inaccurate information as
Expert Witness on tractor
brakes…inappropriate
contingent fee arrangement…
PENALTY:
Three Month Suspension
84
Discipline Cases
CHARGE:
Civil Engineer…asked for…
and received a bribe…
PENALTY:
Membership Revocation
85
Discipline Cases
CHARGE:
Geoscientist issued reports
indicating economic
quantities of gold – did not
strive to use pertinent facts…
PENALTY:
Twenty Four Months
Suspension plus
Costs
86
UBC APSC 450 November 15,
2005
PROFESSIONAL
PRACTICE &
ETHICS
THANK-YOU
REMEMBER – “ CALL BEFORE YOU
DIG” yourself into a hole.
www.apeg.bc.ca
Guidelines for Professional
Excellence – Appendix C –Code
of Ethics Guidelines
EDITORIAL COMMENT AT END OF LECTURE
BY STAN COWDELL
PRESIDENT WESTMAR CONSULTANTS

IN CLOSING, I WOULD LIKE TO MAKE A SOMEWHAT EDITORIAL COMMENT ON THE
PROFESSION AND ON CONSULTING ENGINEERING.

FOR OVER 10 YEARS THE CONSULTING ENGINEERING FIRMS IN CANADA HAVE
RANKED THIRD IN THE WORLD AS EXPORTERS OF ENGINEERING SERVICES, AND
SECOND ON A PER CAPITA BASIS.

EVEN THE MOST BIASSED OF US HAVE TO AGREE THAT A KNOWLEDGE-BASED
INDUSTRY OF THIS SIZE IS TRULY REMARKABLE.

HOWEVER, THERE ARE STILL SOME AREAS WHERE WE COULD BE MORE
SUCCESSFUL.

ENGINERING IS STILL STEREOTYPED IN THE MEDIA AND BY MANY AS BEING
INSENSITIVE, TECHNICALLY ORIENTATED AND SOCIALLY STERILE AND PRACTISED
BY BACKROOM TECHIES.

A PARTICULARLY INTERESTING EXAMPLE OF THIS IS HOW WALL STREET
CHARACTERIZED THE LATE ROBERTO GOIZUETA WHEN HE TOOK OVER AS CEO OF
COKE IN 1981:

A BORING ENGINEER WHO IS HOPELESSLY BOGGED DOWN IN THE
DETAILS OF HIS COMPANY

THIS OF A MAN WHO TOOK COKE FROM A MARKET VALUE OF $4.3 BILLION TO $180
BILLION DURING HIS TENURE WITH COCA-COLA.

THE EMPHASIS BY OUR INDUSTRY ON TECHNICAL KNOWLEDGE, TO THE
EXCLUSION OF OTHER KNOWLEDGE AND SKILL, HAS CREATED THIS PERCEPTION
OF ENGINEERS; HOWEVER BIASED AND UNFAIR THIS MAY BE TO THE MAJ ORITY OF
PRACTITIONERS.

THIS PERCEPTION HAS BEEN REINFORCED BY THE CONSULTING ENGINEER’S
RELUCTANCE TO BE A PUBLIC FIGURE OR TO INVEST IN OUR OWN IMAGE.

THERE ARE CHANGES OCCURRING.

SOCIETY IS DEMANDING GREATER INVOLVEMENT IN THE DEVELOPMENT AND
EVALUATION OF ENGINEERING SOLUTIONS.

THESE SOLUTIONS, WHILE STILL TECHNOLOGY BASED, MUST SATISFY BROADER
CRITERIA WHICH INCLUDE ECONOMIC, SOCIAL, AND AESTHETIC VALUES.

TO MEET THESE DEMANDS CONSULTING ENGINEERS HAVE BEEN FORCED OUT OF
THE DESIGN OFFICE AND INTO MANY DIFFERENT FORUMS.


THEY HAVE BECOME THE INTERPRETERS OF TECHNOLOGY FOR SOCIETY,
EXAMINING NEEDS, IDENTIFYING EFFECTS, AND ARBITRATING VALUES.

BECAUSE ENGINEERS ARE KNOWN TO WORK WITHIN A HIGHLY ETHICAL
PROFESSION, WHICH HAS, AS ITS FUNDAMENTAL TENET, THE PROTECTION OF
SOCIETY, THEIR OPINIONS, WHEN ADEQUATELY EXPRESSED, ARE ACCEPTED BY
WIDE AUDIENCES.

CONSULTING ENGINEERS TO GAIN GREATER RECOGNITIION AS PUBLIC FIGURES,
MUST HAVE SENSITIVITY IN ADDITION TO EXTENSIVE TECHNICAL KNOWLEDGE.

THIS INCREASED PUBLIC FOCUS REQUIRES THAT THE EDUCATION AND TRAINING
OF ENGINEERS INCLUDE THE DEVELOPMENT OF COMMUNICATION AND
INTERPERSONAL SKILLS IN ORDER THAT ENGINEERS ARE ABLE TO PRESENT AND
SUPPORT A PARTICULAR COURSE OF ACTION WHILE HAVING THE SKILLS TO LISTEN
TO AND UNDERSTAND CONTRARY VIEWPOINTS.

ADDITIONALLY, THE TRAINING MUST INCLUDE A MORE CLASSICAL EDUCATION
WHICH ALLOWS FOR A GREATER UNDERSTANDING OF SOCIAL STRUCTURES AND
VALUES SYSTEMS.

ABOVE ALL, I BELIEVE THAT ENGINEERING EDUCATION MUST MAKE A SHIFT FROM
TRANSFERRING A LARGE VOLUME OF TECHNICAL INFORMATION TO USING
TECHNICAL KNOWLEDGE AS ONLY ONE INPUT IN THE PROCESS OF PROBLEM
FORMULATION AND SOLUTION.

THERE MUST ALSO BE A FOCUS ON CREATIVITY OR, IF YOU WILL, IMAGINATION.

I HAVE GIVEN YOU THE QUOTES FROM EINSTEIN ON IMAGINATION, BUT WHILE I AM
BORROWING FROM THE GREAT THINKERS, I WOULD LIKE TO GIVE YOU ONE MORE:

NEXT SLIDE

ROBERTSON DAVIES, THE WORLD RENOWN CANADIAN AUTHOR, IN HIS BOOK
THE MANTICORE DESCRIBED WHAT I BELIEVE WE, AS ENGINEERS, MEAN BY
IMAGINATION:

A... WHEN I SAY IMAGINATION I MEAN CAPACITY TO SEE ALL
SIDES OF A SUBJ ECT AND WEIGH ALL POSSIBILITES; I DON’T
MEAN FANTASY AND POETRY AND MOONSHINE;
IMAGINATION IS A GOOD HORSE TO CARRY YOU OVER THE
GROUND, NOT A FLYING CARPET TO SET YOU FREE FROM
PROBABILITY.

IF CONSULTING ENGINEERING FIRMS HAVE ONE CONCERN WITH OUR RAW
MATERIALS TODAY, IT IS THAT TOO MANY OF THE NEW ENGINEERS ARE ABLE TO
ANSWER THE QUESTION BUT NOT FORMULATE THE PROBLEM.

THEY CAN FOLLOW A DESIGN CODE BUT NOT VISUALIZE THE STRUCTURE OR
MACHINE.


SETTING CREATIVITY FREE IS A CHALLENGE FOR ALL OF US.

FOR THE INDUSTRY, IT MEANS GIVING GREATER CHALLENGES EARLY IN AN
ENGINEER” S CAREER AND ACCEPTING THAT THEY WILL MAKE MISTAKES AND TAKE
WRONG DIRECTIONS.

FOR EDUCATORS, IT MEANS CHANGING THE STRUCTURE OF THE COURSE TO
ALLOW FOR MORE DAYDREAMING; NOT SIMPLY REQUIRING THE STUDENT TO
WRITE THE ANSWER IN THE BOX.

FOR ALL OF US IT MEANS, INVESTING IN LEARNING BEYOND TECHNOLOGY.



FINALLY;

IT IS MY BELIEF THAT YOU CANNOT DO THIS WORK UNLESS YOU BELIEVE IT HAS A
LASTING VALUE FOR SOCIETY.

STEVE JOBS IN HIS RECENT ADDRESS TO THE STANFORD GRADUATING CLASS PUT
IT THIS WAY

“ YOU’VE GOT TO FIND WHAT YOU LOVE. AND THAT IS AS TRUE FOR YOUR
WORK AS IT IS FOR YOUR LOVERS. YOUR WORK IS GOING TO FILL A LARGE
PART OF YOUR LIFE, AND THE ONLY WAY TO BE TRULY SATISFIED IS TO
BELIEVE WHAT YOU DO IS GREAT WORK”

EVERYTHING THAT AN ENGINEER DESIGNS AND BUILDS - UNLESS YOU HAPPEN TO
BE THE MOST FORTUNATE OR GIFTED- WILL BE RUSTED, ERODED OR RENDERED
OBSOLETE WITHIN A RELATIVELY SHORT PERIOD OF TIME.

WHAT WILL NOT BE CHANGED HOWEVER IS THE IMPACT THAT YOU HAVE ON
SOCIETY AND THE PEOPLE WHOM YOU WORK WITH. THESE NON TANGIBLE
IMPACTS WILL HAVE THE LASTING VALUE WHICH YOU WILL BE MOST PROUD OF.

FINAL SLIDE

ENGINEERING IS INDEED A NOBLE PROFESSION.

Employment Law
In British Columbia













Presented By:
Christian Petersen

University of British Columbia

Applied Science 450:
Professional Engineering Practice

October 5, 2004
© 2004 Bull, Housser & Tupper






BULL, HOUSSER & TUPPER
_______________

BARRISTERS & SOLICITORS
Patent & TradeMark Agents

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E-MAIL: CJ P@BHT.COM
BULL, HOUSSER & TUPPER FALL 2004
INTRODUCTION

The relationship between a non-union employee and employer is governed by the following
regimes:

1. the common law, which includes written contracts;

2. the Human Rights Code, R.S.B.C. 1996, c. 210;

3. the Workers’ Compensation Act, R.S.B.C. 1996, c. 492; and

4. in some cases, the Employment Standards Act, R.S.B.C. 1996 c. 113.

From the above legal regimes, this paper will touch upon the following topics:

• Common Law obligations
• Confidentiality
• Employment Contracts
• Non-Competition Agreements
• Employment Standards in British Columbia
• Human Rights Code
• Workers Compensation Act

THE COMMON LAW

Most employment relationships are not governed by a written employment agreement.
Furthermore, in many instances where there are documents between an employee and employer,
the document does not include all of the terms of the employment relationship. Where there is
no written contract or where the written contract is not complete, the common law will imply
terms into the relationship and impose duties onto both the employer and the employee.

Under the common law, an employer owes the following duties to an employee:

• an employer must not dismiss an employee without cause or reasonable notice.
• in carrying out any dismissal, the employer must not act in bad faith.
• an employer must not force an employee to take a demotion, without notice or cause.

Under the common law, an employee owes the following duties to an employer:

• to attend at work;
• to carry out the lawful orders of an employer;
• to perform his or her duties in a competent manner;
• to serve his or her employer honestly and faithfully;
• not to engage in a “conflict of interest”.

BULL, HOUSSER & TUPPER FALL 2004
Page 2
In addition to the above, some employees owe increased duties of confidentiality.

Disputes arising under the common law are resolved through the Court.

DUTIES OF AN EMPLOYER

Reasonable Notice

It is an implied term of every employment contract that, absent cause, an employer must provide
an employee with “reasonable notice” of termination. Such notice, to be effective, must be clear
and unequivocal.

The purpose of providing “reasonable notice” is to provide the employee with time to find
alternative employment. What constitutes reasonable notice varies from case to case. There is
no set formula under the common law upon which to determine reasonable notice. The usual
refrain of one month per year is not accurate. “Reasonable notice” under common law is also
different from the notice required to be given under the Employment Standards Act, which will
be discussed below.

When determining what would be a reasonable notice period, employers often consider Court
decisions in similar cases. The Court determines reasonable notice on an individual basis but
considers the following factors:

• age of the employee;
• length of service;
• character of the employment; and
• availability of similar employment given the training and education of the employee.

In some cases, the notice period will be lengthened where the employee was induced to leave
secure or long-term employment to join the employer and was then terminated by the new
employer without cause.

Notice periods vary widely. Although the Court had indicated that the upper limit of the
reasonable notice period was twenty-four months, recent awards exceeding twenty-four months
have been made by the Court where the employer has acted in bad faith.

Cause

An employer is entitled to dismiss an employee without reasonable notice for cause. The
employer will bear the onus in any subsequent litigation to prove that it had cause to dismiss the
employee without providing reasonable notice. In British Columbia, the Court is generally
very reluctant to find that cause exists. The onus placed upon employers is a high one. The
employer must show that the employee’s conduct went to “the root of the employment
contract” with the result that the relationship was “too fractured” to expect the employer to
provide a second chance.

BULL, HOUSSER & TUPPER FALL 2004
Page 3
Examples of the type of conduct which has been found to warrant immediate dismissal
include:

• Theft
• Dishonesty such as lying, and in some instances silence.

Not all acts of dishonesty will give the employer the right to dismiss an employee for
cause. The Supreme Court of Canada has held that such a determination depends upon
the nature and circumstances of the dishonest conduct. The court made the following
comments:

… I am of the view that whether an employer is justified in dismissing an employee on the
grounds of dishonesty is a question that requires an assessment of the context of the alleged
misconduct. More specifically, the test is whether the employee’s dishonest conduct gave rise to a
breakdown in the employment relationship. …

In accordance with this test, a trial judge must instruct the jury to determine (1) whether the
evidence established the employee’s deceitful conduct on a balance of probabilities; and (2) if so,
whether the nature and degree of dishonesty warranted dismissal. …

* * *
Underlying the approach I propose is the principle of proportionality. An effective balance must
be struck between the severity of an employee’s misconduct and the sanction imposed.

Dishonesty may take the form of omission of important information, particularly where
the employee is in a position of trust or where the information is of fundamental
importance to the employer. Whether the employee lied or whether the employer simply
avoided the issue when she knew the issue to be important, the result is the same.

• Wilful disobedience to clear instructions or well-known policies or procedures, without
reasonable excuse. The Court has stated:

I begin with the proposition that an employer has a right to determine how his business shall
be conducted. He may lay down any procedures he thinks advisable so long as they are
neither contrary to law nor dishonest nor dangerous to the health of the employees and are
within the ambit of the job for which any particular employee was hired. It is not for the
employee nor for the court to consider the wisdom of the procedures. The employer is the
boss and it is an essential implied term of every employment contract that, subject to the
limitations I have expressed, the employee must obey the orders given to him.

It is not an answer for the employee to say: “I know you have laid down a rule about this, that
or the other, but I did not think that it was important so I ignored it”.

But it may be an answer, on the question of whether disobedience is repudiatory, that the
employer so conducted himself that the reasonable man would conclude, and the employee
did in fact, conclude, that the employer considered the rule of little or no importance. For
instance, if an employer had a rule that equipment was to be covered at the end of the day and
the rule was ignored by the employees to the knowledge of the employer, he could hardly
come to work one morning and discharge the lot for failing to obey the rule.

BULL, HOUSSER & TUPPER FALL 2004
Page 4
To justify the dismissal on such grounds there is an onus on the employer to establish
there were acts wilfully carried out by the employee in defiance of clear and unequivocal
instructions of a superior or refusal to carry out policies or procedures well known by the
employee as being necessary in the fulfilment of the employer’s objectives.

• Insolence and insubordination
• Conflict of interest, by acting in a manner which adversely affects the interest of the
employer;
• Incompetence

Serious or gross incompetence gives rise to the right of an employer to dismiss the
employee. Where incidents are sufficiently serious, the plaintiff may be dismissed
without warning.

• Intoxication, causing harm to the employer.
• Absenteeism or lateness

Even with respect to theft and dishonesty, the employer must show that it has not “accepted
or condoned” the conduct by not dismissing the employee or delaying in dismissing the
employee.

In most cases, to succeed in dismissing an employee for incompetence, absenteeism or
intoxication, the employer must show that it has warned the employee of the consequences of
his conduct (that is that the employee’s job is in jeopardy) and given the employee a
reasonable time to correct the conduct. Again, the employer must not delay in taking action.

Bad Faith

In carrying out a dismissal, an employer must not act in “bad faith”. Bad faith has not been
defined definitively. The Supreme Court of Canada, however, has stated:

The obligation of good faith and fair dealing is incapable of precise definition. However, at a
minimum, I believe that in the course of dismissal employers ought to be candid, reasonable,
honest and forthright with their employees and should refrain from engaging in conduct that
is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.

The obligation not to act in bad faith is not an independent obligation, there must also be a
wrongful dismissal. Therefore, if an employer provided reasonable notice but acted in bad faith
when carrying out the dismissal, there is no course of action by the employee.

Where an employer is found to have acted in bad faith, the notice period to which the employee
is entitled is increased. The purpose of so doing is twofold:

• to compensate an employee for the negative impact such conduct may have on his or her
ability to find alternative employment (thereby mitigating his or her damages); and
• to punish employers for callous and insensitive treatment.
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In British Columbia, at least one Court has commented that the duty imposed upon an employer
is “not [to] treat an employee unfairly or to create impediments to his or her search for new
employment”. The Court is careful not to define too rigidly the types of conduct which may
constitute bad faith, nor does the Court merely look at the effect of the conduct on the
employee’s ability to find alternative employment. Conduct which does not affect the ability to
find alternative employment may be compensated if it caused humiliation, embarrassment or
damage to the employee’s self-esteem.

Some examples of conduct which amounted to “bad faith” are:

• dismissing an employee abruptly, shortly after he had received a favourable review and using
“hardball” tactics, including alleging cause, which made it more difficult for the employee to
find alternative employment;
• dismissing an employee one day after giving her a message complimenting her on her
performance and making untrue and derogatory comments about her in the close-knit
industry in which she worked;
• wrongfully accusing an employee of theft or fraud and telling potential employers;
• alleging fraud and refusing to provide a letter of reference;
• making knowingly false misrepresentations about future employment prospects upon which
the employee relies;
• dismissing a disabled employee on the employee’s return to work from leave;
• hiring a replacement worker for an employee who was laid-off temporarily, without telling
the employee of the termination;
• dismissing an employee for cause based upon allegations which were not investigated
properly, were unsubstantiated and in some cases untrue; and where the employee was
employed in a specialized industry with little hope of finding alternative employment in the
circumstances;
• abolishing the employee’s position while the employee was on vacation, and alleging and
maintaining cause against the employee after his termination when it was clear that there was
no basis;
• alleging cause after the termination and telling persons outside the company that the plaintiff
had been dishonest and had come to work under the influence of alcohol;
• giving the employee ninety days to improve her performance, but then firing her after forty
days for ‘incompetence’;
• making false statements to potential and an actual future employers; alleging “illegality” and
fraudulent conduct, which allegations were only abandoned shortly before trial; and
suggesting, then withdrawing, an allegation that monetary incentives were being paid by the
plaintiff to salesmen of the defendant;
• making unfounded allegations in the close-knit industry against the employee of forgery,
insurance fraud, mortgage fraud, incompetence, unprofessional organisational abilities,
disobedience, drug and/or alcohol abuse, and misuse of a cellular phone;
• carrying out the dismissal in public, alleging that the employee had resigned but alleging
cause as an alternative, and subsequently offering the same employee a new job with much
reduced responsibilities and salary.
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The following are examples of conduct which did not constitute bad faith:

• dismissing an employee without cause or reasonable notice;
• failing to negotiate a severance package;
• failing to provide a reference and making an allegation of cause which although not
successful, was made on some objectively justifiable grounds, coupled with the fact that
there was no evidence of emotional trauma or “hard ball” tactics on the part of the employer;
• maintaining an allegation of just cause until after examinations for discovery;
• maintaining an allegation of cause unsuccessfully, but where the employee had committed
serious errors of judgment;
• telling an employee that he was being “laid off” when he was, in fact, being terminated,
coupled with the fact that there was no significant impact of the conduct on the employee;
• offering a “take-it-or-leave-it” offer of income continuance, then later attempting to induce
the employee to accept the minimum statutory payment in settlement of his claim, where the
employer was forthright and did not allege cause;
• reducing the amount of severance pay offered after the employee refused to sign a release;
• delay in paying the statutory minimum severance pay and vacation pay;
• irritability or rudeness on the part of the employer prior to the termination, when the
dismissal itself was conducted in private and the fact of the dismissal was kept confidential
during the notice period, the employer gave the plaintiff an explanation for her firing which
attributed no blame to the plaintiff and gave a laudatory letter of reference;
• failing to offer an employee who was being terminated at the age of 50, with 31 years service
with the government, to ‘bridge’ him to retirement or pay out his accumulated sick time;
• making a comment to other employees after the termination that the employee “was given
‘umpteen’ chances to improve but never did;
• eliminating a bonus which constituted constructive dismissal and advising of the elimination
in a written memorandum dropped in the employee’s mailbox, all in the context of a
deteriorating relationship between the parties;
• failing to extend early retirement benefits to two employees who had resigned and were
working through their notice periods;
• making an allegation of cause then withdrawing it soon thereafter, coupled with the sudden
dismissal of an employee after a long-running dispute between the employee and her
superior.

Quantifying the bad faith element of the dismissal is not an easy task. Typically the more
egregious the conduct, the higher will be the award, particularly where the conduct hinders the
employee’s ability to find alternate employment. In many of the decisions in British Columbia,
the Court has not specified the extent to which the notice period was extended as a result of bad
faith conduct and the Court of Appeal has stated that the existence of bad faith is just one more
of the factors to be considered in determining a reasonable notice period. However, a few cases
have indicated extensions of two to six months.



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DUTIES OF AN EMPLOYEE

All employees owe a general duty of good faith and fidelity to their employer. In addition,
certain senior employees, known as fiduciaries, owe special duties to the employer. Such duties
exist during the employment and after the employment relationship is terminated.

Confidential Information and Trade Secrets

It is clear that employees are not entitled to use confidential information obtained during the
course of employment. However, determining what information is truly confidential is often
problematic.

One particular type of confidential information which an employee may obtain from an employer
is a “trade secret”. Trade secrets include a process, tool, mechanism, formulae, or recipe which
is known only to the employer and the employees who are required to know it due to their
employment The employer must in fact keep the trade secret “secret”, and must intend to
protect the secrecy of the information. A classic example of a trade secret is the recipe or
formula for making Coca Cola.

It is difficult to establish that certain information is a “trade secret”, but when that is established,
employees are bound by their obligations of loyalty and good faith not to disclose or make use of
the trade secret in competition with the employer or in circumstances where that information
may be used in competition with the employer.

In contrast, customer lists often are not considered to be confidential. For example, if a list of
customers can be generated from a public document, such as a telephone book or a trade journal,
it is difficult for the employer to persuade the Court that the customer names are confidential.
However, where a list of the employer’s customers would be difficult to generate, the Court is
more inclined to consider the information to be confidential and to deserve protection.

Absent a written agreement to the contrary, the current law allows a regular (non-fiduciary)
employee to resign from his or her position with a company, start up or join a competitive
business, and immediately begin soliciting clients of his or her former employer. This is
provided that the employee does not remove any physical property belonging to the former
employer, including physical or electronic customer lists, pricing information, client portfolio
information or the like. The employee may memorize customer names, then later look up the
names of customers in the telephone book, and contact them directly for the purpose of soliciting
their business in competition with the former employer. In other words, ordinarily customer
names are not necessarily confidential nor is the fact that they are customers of the company.
What remains confidential is the document on which their names are printed or the database on
which the names are stored.

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Competition with Former Employer

Unless there is a written contract or the former employee was a fiduciary, the former employee is
entitled to compete with the former employer and solicit the former employer’s customers, so
long as the former employee does so without using the former employer’s confidential
information.

A fiduciary is more restricted in competing with a former employer. A fiduciary may not directly
solicit business from customers of the former employer for a reasonable period of time following
the termination of the employment. In most cases a fiduciary may not secure a business
opportunity belonging to or offered to his or her former employer, even where the company did
not and could not have taken advantage of the opportunity, and when the employee did not
pursue the opportunity until after the termination of the employment relationship.

It is often difficult to determine whether an employee was sufficiently senior to be considered a
fiduciary. Senior executives of the companies are likely fiduciaries. Employees who were so
involved in the direction and management of a company that he or she was equivalent to a
director or officer will generally be considered fiduciaries. Usually a significant senior
managerial role, involving greater responsibility than minor supervisory duties, must be
established before an employee will be considered by the court to be a key employee with
fiduciary obligations to the employer.

Before an individual can be considered to be a “key” employee, the following circumstances
must exist:

1. the responsibilities of the employee in question must include the exercise of some
discretion or power;

2. the employee must be able to exercise that power or discretion unilaterally so as
to affect the legal or practical interests of the employer; and

3. the employer must be peculiarly vulnerable to or at the mercy of the fiduciary
holding the discretion or power.

EMPLOYMENT CONTRACTS

Employment contracts allow employers and employees to address up front the implied common
law duties. Written employment contracts often address such issues:

• what constitutes reasonable notice;
• confidentiality;
• ownership of intellectual property;
• unfair competition.

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In most cases, but not all cases, the Court will enforce the terms of a written contract. In
particular, the Court is wary of enforcing contracts which restrict an employee’s ability to earn
income after being terminated by the employer. The Court will also not enforce a written
contract which violates the Employment Standards Act, which issue will be discussed below.

CONFIDENTIAL AND PROPRIETARY INFORMATION

Written contracts stipulating what information is proprietary, and what information the employee
must treat as confidential, can assist an employer to protect its information. An employer can
make clear to an employee its expectations of what is confidential and remove or minimize
ambiguity. A strong provision in an agreement will also act as a deterrent to an employee who
may be inclined to release such information.

Simply describing particular information as confidential is not enough. Where the information
was not treated as confidential or cannot reasonably be considered proprietary, the Court may
decline to enforce the contract against the employee. Generally confidential information is
defined in an agreement as widely as possible but confidential information does not include
information which is in the public domain or information possessed by the employee before they
commenced employment. Accordingly, it is important for employers to take steps to maintain
the confidentiality of information it does not want third parties to know.

Whether or not confidential information is protected in a contract, proving a breach will often be
difficult.

An employer may also use Confidentiality Agreements to protect and retain intellectual property
developed by the employee during the course of his/her employment and require that any such
interest be assigned or transfer to the employer. The scope of the protection can cover work
conceived outside regular working hours and work not specifically instructed to be undertaken
by the employer. This can remove any dispute as to whether the property was truly developed
outside work.

NON-COMPETITION AGREEMENTS AND RESTRICTIVE COVENANTS

In general, the Court seeks to protect employers against unfair competition while protecting a
former employee’s ability to earn income through fair competition with the employer. The line
between what the Court considers to be fair and unfair competition is exceedingly difficult to
draw and will depend on the particular facts relating to the specific employment relationship in
question.

As a general rule, the Courts refuse to enforce contracts that are in restraint of trade on the basis
that all interference with individual liberty of action in trading is contrary to public policy and
therefore void. If a contract which interferes with trade falls within certain exceptions, the Court
may enforce it. Restrictive Covenants will be enforceable only if they fall within an exception to
the general rule, in that they are reasonable in the circumstances.

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Restrictive covenants typically will restrain an employee from engaging in a competitive
business in any capacity for a certain period of time in a certain geographic area. The Court will
allow enforcement of a non-competition agreement where the restriction is reasonable with
reference to the interest of the parties concerned and the interest of the public at large. The
employer’s primary interest is to prevent an employee from unfairly using the employee’s
confidential knowledge or special relationship to compete.

The scope of the restriction must be reasonable when viewed against each individual employee’s
interests. “One size fits all” contracts are at risk of being too broad to be enforced against a
specific employee unless the lowest common denominator is used.

The courts will not fix the clause if it is found to be too restrictive. The whole clause will be
unenforceable. The Court will not ‘blue pencil’ restrictive covenant clauses. The term ‘blue
pencil’ refers to the practice of inserting alternatives into a restrictive covenant clause. For
example, the clause may state that the employee will not compete in (a) Canada or, in the
alternative, (b) British Columbia, for a period of (a) 5 years, or, in the alternative, (b) one (1)
year.

The Court often focuses on whether the scope of the restriction on the employee is overly broad.
For example, an employer who seeks to restrain an employee from competing altogether with the
employer’s business will often find that the Court will not enforce the contract. By contrast, the
Court is more likely to enforce a contract which restrains an employee from contacting only
those particular customers with which the employee had contact during a limited time before the
termination of the employment relationship, or prohibits competition only in that aspect of the
business in which the employee was involved or prohibits an employee from soliciting remaining
employees. Other circumstances such as the source of the business connection may be relevant
in determining whether such clauses would be enforceable.

Restrictions which are too broad geographically, or too long in time will be unenforceable on the
basis that they are an illegal restraint of trade.

EMPLOYMENT STANDARDS ACT IN BRITISH COLUMBIA

INTRODUCTION

Employment standards in British Columbia are governed by the Employment Standards Act (the
“Act”). The purpose of the Act is to provide employees in British Columbia with at least basic
standards of compensation and conditions of employment.

The Act provides minimum standards. Employers and employees are free to enter into
agreements which provide higher standards than the Act but cannot enter into an agreement
which offers less than the Act.

TO WHOM DOES THE ACT APPLY?

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The Act applies to all employees in British Columbia unless the employee is specifically
exempted from the Act. The exemptions are contained within the Employment Standards
Regulation. Some employees, such as professional engineers and lawyers, are exempted from
the operation of the Act as a whole. Other employees, such as managers and “high technology
professionals” are exempt only from portions of the Act.

WHAT IS THE SCOPE OF THE ACT?

The Act regulates the following areas:

• minimum wages
• pay days
• how wages are paid
• deductions and assignments
• wage statements and payroll records
• hours of work and overtime
• statutory holidays and vacations
• pregnancy leave and parental leave
• jury duty
• notice periods and termination

MINIMUM WAGES

The minimum wage is currently $8.00 per hour. The only exceptions to the minimum wage are
in respect of live-in home support workers, live-in day camp leaders, resident caretakers and
farm workers. The minimum wage is calculated on a different basis for such workers.

For employees who have no paid work experience before November 15, 2001, the first job/entry
level minimum wage of $6.00 per hour applies. However, after they have worked for a total of
500 hours with one or more employers, these employees are entitled to the regular minimum
wage.
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HOURS OF WORK AND OVERTIME

The following is a table which outlines the rights of various employees.

REGULAR EMPLOYEES LAWYERS, HIGH
TECHNOLOGY
PROFESSIONALS
OTHER EMPLOYEES OF HIGH
TECHNOLOGY COMPANIES
Must pay overtime after:
8 hours per day OR
40 hours per week
No overtime pay (But no excessive
hours)
Must pay overtime after:
12 hours per day OR
80 hours per two weeks
Must pay statutory holiday pay. No statutory holiday pay Must pay statutory holiday pay.
Must give 24 hours’ notice of any
change in shift.
No notice required Must give 24 hours’ notice of any
change in shift.
Must give a 30 minute meal break
after 5 hours of work.
No meal break Must give a 30 minute meal break
after 5 hours of work.
Split shifts must be completed
within 12 hours.
No limit on split shifts. Split shifts must be completed
within 12 hours.
Must pay a minimum daily pay of 2
hours.
No minimum daily pay. Must pay a minimum daily pay of 2
hours.
Must give 32 hours free from work
each week.
No work-free period. Must give 32 hours free from work
each week.

VACATIONS

Under the Act, employees are entitled to two weeks of vacation per year after one year of
employment and after five years of employment, the employee is entitled to three weeks.

After one year of employment an employee is entitled to vacation pay of 4% of his annual
income and after five years of employment, 6%.

MATERNITY LEAVE

This part of the Employment Standards Act applies to most employees.

An employee wishing to commence maternity leave may do so commencing no sooner than 11
weeks immediately before the anticipated date of birth. The employee must request the leave in
writing at least 4 weeks before the day the employee proposes to begin the leave. The employer
may require that the leave request be accompanied by a medical certificate stating the expected or
actual date or the date the pregnancy terminated or the reasons requesting additional leave.

The employee is entitled to up to 17 consecutive weeks leave of absence without pay which may
commence at any time up to 11 weeks prior to the delivery. Additionally, if, for reasons related to
the birth of the child the employee is unable to return to work, further leaves of absence may be
taken for up to an additional 6 consecutive weeks.

An employee shall not return to work before the expiration of 6 weeks following the actual date of
birth of the child unless:
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(a) the employee makes a request in writing to the employer at least one week prior to
the date of return to work; and

(b) if required by the employer, she furnishes the employer with a certificate from a
medical practitioner stating that she is able to resume work.

In cases where a pregnancy has terminated prior to actual birth or where birth was premature
resulting in the employee being unable to make the normal written request for leave of absence, then
upon the employee’s request, the employee may be granted a leave of absence without pay for up to
6 consecutive weeks.

A request for maternity leave must be made in writing at least 4 weeks before the employee
proposes to begin his or her leave. An employer may require requests for maternity leave be
accompanied by a medical practitioner’s certificate stating the expected or actual birth date
or the date the pregnancy terminated.

The Employment Standards Act prohibits the employer from terminating an employee for reasons
relating to the pregnancy. Additionally, an employer is prohibited from changing the conditions of
employment for reasons related to the pregnancy unless it first obtained the employee’s written
consent.

PARENTAL LEAVE

In addition to the 17 weeks of maternity leave, a birth mother may take up to an additional 35
unpaid weeks as parental leave. A maternity leave and a parental leave must be taken
consecutively for a maximum total leave of absence of 52 weeks. If no maternity leave is
taken, a birth mother may take an unpaid parental leave of 37 weeks, to be completed within
52 weeks after the birth of the child.

Birth fathers and adoptive parents are entitled to a parental leave of absence, without pay, for
a period of up to 37 weeks, to be completed within 52 weeks after the birth of the child or
after the child is placed with the adoptive parent.

A birth father, birth mother, or an adoptive parent may take up to 5 additional weeks of
unpaid leave, beginning immediately after a parental leave, if the child has a physical,
psychological or emotional condition requiring an additional period of parental care.

A request for parental leave, with the exception of a request for parental leave made by a
birth father or an adopting parent, must be made in writing at least 4 weeks before the
employee proposes to begin his or her leave. An employer may require requests for parental
leave be accompanied by a medical practitioner’s certificate or other evidence of the
employee’s entitlement to leave.

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EFFECT OF MATERNITY AND PARENTAL LEAVES

An employer is not required to pay an employee during maternity or parental leave. Employees can
claim benefits for these leaves under the Employment Insurance Act.

The service of an employee who is absent from work due to pregnancy is considered continuous for
the purposes of vacation entitlement, vacation pay, severance pay and notice of termination, and any
pension, medical or other plan beneficial to the employee. The employer shall continue to make
payments to such plans in the same manner as if the employee were not absent if the total cost of the
plan is normally paid by the employer. The employee may elect to continue to pay his or her share
of any plan that is paid jointly by the employer and the employee, in which case employer
contributions must continue as well.

The employee is entitled to all increases in wages and benefits the employee would have been
entitled to had the leave not been taken.

NOTICE PERIODS AND TERMINATION

The following notice periods are required under the Act:

Length of Service Notice Required

0-3 months 0
3-12 months 1 week
1-2 years 2 weeks
2-3 years 3 weeks
3-4 years 4 weeks
4-5 years 5 weeks
5-6 years 6 weeks
6-7 years 7 weeks
7 years plus 8 weeks

The notice periods required by the Act are lower than the notice periods required by common
law. Accordingly, an employee may seek both common law notice and notice under the Act.

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EFFECT OF WRITTEN EMPLOYMENT CONTRACTS

Written contracts may appear to offer a way to avoid some of the provisions of the Act.
However, section 4 of the Act provides that any provision of an employment agreement which
violates the Act is of no effect. Upon that basis, the Employment Standards Tribunal and the
Court will only give effect to a contract which meets or exceeds the provisions of the Act

Under section 4, an employee cannot agree to waive the protections guaranteed by the Act. Even
if the employee agrees in writing to waive the protections under the Act, he can change his mind.
Upon the basis of section 4, the Employment Standards Tribunal has struck down the following
types of agreements:

• waiver of minimum wage;
• working for free, on a trial basis;
• paying wages late;
• paying straight time for overtime worked;
• working as an independent contractor;
• permitting deductions for salary of such items as property damaged or lost by the
employee;
• calculation of salary to include overtime;
• setting the reasonable notice period at thirty days.

An employer and an employee may enter into a contract which provides better terms than an
employee would get under the Act alone. In such an instance, the employer would be bound by
the contract.

HOW ARE COMPLAINTS MADE UNDER THE ACT?

Beginning in 2002, in an effort to encourage employees to try to solve problems in cooperation
with their employer, the Branch implemented a new complaint resolution process.

The Branch now requires that, except under very unusual circumstances, a new Employment
Standards Self-Help Kit be completed and given by the employee to his or her employer before a
complaint can be made. The Kit attempts to help define the problem and provides materials to
assist in resolving the problem prior to the formal complaint process. For example, in order to
assist with wage problems, the Kit includes a letter to the employer, written by the Branch, along
with a detailed Request for Payment form. If the use of the Self-Help Kit does not resolve the
problem, the employee must make a written complaint to the Branch.

Complaints may be made at any time while an employee is still employed but must be made
within six months of the last day on which the employee worked. Complaints can go back for a
period of six months. For example, if an employee claims she is entitled to overtime, she can
make a claim for overtime pay up to six months after she stops working and that claim would
cover the previous six months of her employment.

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After a complaint is made, the Director must accept and review the complaint and may conduct
an investigation. Prior to making a determination, and in accordance with the complaint
resolution process, the Director may arrange a mediation session between the parties. If the
parties agree on a solution, the Director may draft a settlement agreement. Otherwise, the
Director of Employment Standards will issue a Determination. A party may appeal a
Determination to the Employment Standards Tribunal. The Tribunal may:

• refuse to hear an appeal;
• decide the appeal on the information it already has before it;
• accept submissions in writing;
• conduct a full hearing.

If the Tribunal conducts a hearing, it will not hear evidence which was not made available to the
investigator. Accordingly, the parties to a complaint should co-operate fully with the Director
when an investigation is being carried out.

REMEDIES UNDER THE ACT

Under the Act, the usual remedy is that an employees are paid compensation. However, if the
employee is dismissed as a result of requiring leave under the Act or the employer misrepresents
the nature of the position to a potential employee, that employee may be re-instated to the
original position or paid compensation in lieu of reinstatement. The employer may also be
required to pay the employee or other reasonable and actual expenses incurred because of the
contravention.

Section 79(4) provides the remedy:

(4) In addition, if satisfied that an employer has contravened a requirement of section 8 or
Part 6, the director may require the employer to do one or more of the following:
(a) hire a person and pay the person any wages lost because of the contravention;
(b) reinstate a person in employment and pay the person any wages lost because of
the contravention;
(c) pay a person compensation instead of reinstating the person in employment;
(d) pay an employee or other person reasonable and actual out of pocket expenses
incurred by him or her because of the contravention.

In the Tribunal decisions thus far, reinstatement has not been awarded. In most cases,
compensation is awarded. The Tribunal has described the remedy as follows:

In our opinion, Section 79(4) is perhaps the most restorative remedial provision in the Act, giving
the Director broad jurisdiction to place the terminated employee in the same position he or she
would have been in but for the wrongful action of the employer. As a remedial provision, it calls
for a liberal and broad interpretation: Machtinger v. Hoj Industries Ltd. (1992) 91 D.L.R. (4th)
491 (S.C.C.).

In our view, the remedies under the Act must be fair, compensatory and promote compliance.
These principles are reflected in the purposes of the Act set out in Section 2 and the Act itself.
With respect to compensation, the general principle of damages must be to put the individual in
the same position the individual would have been in but for the breach of the statutory obligation.
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Section 79(4) permits a remedy not available at common law. We are not in any way limited to,
for example, such damages as might have been awarded in an action for wrongful dismissal. In
our view, the statutory remedy should not be narrowly constructed and we have the power to
fashion a remedy that is fair, compensatory and promotes compliance with the Act. In short, the
remedy depends on the extent of the injury suffered because of the breach. Some of the factors
we have considered are those relied on by the Tribunal in a recent decision Afaga Beauty Service
Ltd. (BCEST #D318/97): length of employment with the employer; the time needed to find
alternative employment; mitigation efforts undertaken; other earnings during the period of
unemployment; projected earnings from previous employment; etc. The Tribunal is not limited to
considering only those factors as which factors are appropriate will depend on the specific
circumstances of each appeal. We do not agree with the Director that Ms. Prickrell's entitlement
to compensation extends to the date of the Determination (November 4, 1997). As noted above,
there was an inordinate and unexplained delay between the date of Ms. Prickrell's complaint and
the date of the Determination. We consider that compensation for "loss of employment" is
included in the total amount of compensation to which Ms. Pickrell is entitled when we adopt and
apply the various factors enunciated above and in Afaga Beauty Service Ltd. (BCEST #
D318/97).

In that decision, the pregnant employee was dismissed on September 20, 1995, ostensibly for
cause. She gave birth to her child in October, 1995. The compensation she was awarded was in
the Determination was lost wages from the date of her dismissal to the date of the Determination,
some two years later.

There have been determinations where damages have been awarded for emotional pain and
suffering - usually under the heading of “expenses”. However, the Tribunal has found that such
damages are not provided under the Act but fall within the scope of the Act.

OVERLAP BETWEEN THE COURT AND THE ACT

The following actions are ones which can be pursued through the Court:

• a claim for damages for wrongful dismissal;
• a claim for damages for the breach of any term of an employment contract;
• an action in debt to recover amounts owing to the employee.

The above actions overlap with certain provisions of the Act: such as the right to severance pay,
unpaid wages. There may also be overlap where there is a contract of employment which deals
with vacation pay, overtime and statutory holiday pay.

THE EFFECT OF SECTION 118 OF THE ACT

The Act itself contemplates that there will be an overlap of rights and avenues to pursue. Section
118 of the Act provides:

Subject to section 82, nothing in this Act or the regulations affects a person's right to commence
and maintain an action that, but for this Act, the person would have had the right to commence
and maintain.

Section 82 of the Act provides:
BULL, HOUSSER & TUPPER FALL 2004
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Once a determination is made requiring payment of wages, an employee may commence another
proceeding to recover them only if
(a) the director has consented in writing, or
(b) the director or the tribunal has cancelled the determination.

Thus, section 82 prohibits concurrent actions to recover wages which are the subject of a
determination.

What claims may not be brought in the Courts?

• Claims in respect of which a determination is made: section 82. However, since the
limitation period for unpaid wages extends back only two years under the Act, there may still
be a right on the part of the employee to seek unpaid wages going back beyond that time.
• Claims for vacation pay, overtime, minimum wage, etc. where there is no contractual right to
such pay.

HUMAN RIGHTS CODE

In 1974, the Human Rights Code came into operation. This legislation has now been superseded in
1984 by the Human Rights Code.

DISCRIMINATORY PUBLICATION

The Human Rights Code prohibits any person (which includes an employer) from publishing or
displaying before the public a notice, sign, symbol, emblem or other representation indicating
discrimination or an intention to discriminate against a person or class of persons in any manner
prohibited by the Act.

DISCRIMINATION IN EMPLOYMENT ADVERTISEMENTS

The Human Rights Code prohibits any person from publishing an advertisement in connection with
employment or a prospective employment that expresses a limitation, specification or preference as
to race, colour, ancestry, place of origin, political belief, religion, marital status, physical or mental
disability, sex, sexual orientation or age unless a limitation, specification or preference is based on a
bona fide occupational requirement.

DISCRIMINATION IN WAGES

The Human Rights Code provides that an employer shall not discriminate between his male and
female employees by employing an employee of one sex for work at a rate of pay that is less than
the rate of pay at which an employee of the other sex is employed by that employer for similar or
substantially similar work. The concept of skill, effort and responsibility is used to determine what
is similar or substantially similar work.

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The Human Rights Code provides that a difference in the rate of pay between employees of different
sex based on a factor other than sex does not constitute a failure to comply with the Human Rights
Code where the factor on which the difference is based would reasonably justify the difference.
Examples might include a seniority system or an incentive program. The Human Rights Code also
prohibits an employer from reducing the rate of pay of one employee in order to comply with this
section.

In situations where an employee is paid less than the rate of pay to which he is entitled under this
section, he is entitled to recover from his employer the difference between the amount paid and the
amount to which he is entitled, together with the costs, but no action can be commenced later than
12 months from the termination of the employee’s services and the action applies only to wages of
an employee during the 12 month period immediately preceding the date of the termination of his
services or the date of the commencement of his action, whichever date occurs first.

DISCRIMINATION IN EMPLOYMENT

The Human Rights Code prohibits a person from refusing to employ or refusing to continue to
employ a person or discriminating against a person with respect to employment or any term or
condition of employment because of the race, colour, ancestry, place of origin, political belief,
religion, marital status, family status, physical or mental disability, sex, sexual orientation or age of
that person or because of his conviction for a criminal conviction charge that is unrelated to the
employment or to the intended employment of that person. Age discrimination is prohibited only in
respect of persons between the ages of 19 and 65.

This provision does not apply as it relates to age, to any bona fide scheme based on seniority, or as it
relates to marital status, physical or mental disability, sex or age, to the operation of any bona fide
retirement, superannuation or pension plan or to a bona fide group or employee insurance plan. Also
the provision does not apply with respect to a refusal, limitation, specification or preference based on
a bona fide occupational requirement.

THE QUESTION OF INTENTION

The prohibitions in the Human Rights Code apply to practices whether or not there was an intention
to discriminate.

WHAT IS A BONA FIDE OCCUPATIONAL QUALIFICATION?

The Human Rights Code provides for discrimination in employment decisions if it is based on a
bona fide occupational qualification or requirement.

Bona fide occupational qualifications or requirements, depending on the legislation in use, have been
dealt with extensively in human rights cases. It is the employer’s obligation to show that a bona fide
occupational requirement exists. This was addressed in Ontario Human Rights Commission et al. v.
The Borough of Etobicoke (1982) 40 N.R. 159 (S.C.C.), where Mr. Justice McIntyre stated at
pp. 165-66:

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To be a bona fide occupational qualification and requirement a limitation, such as a mandatory retirement
at a fixed age, must be imposed honestly, in good faith and in the sincerely held belief that such limitation
is imposed in the interests of the adequate performance of the work involved with all reasonable dispatch,
safety and economy, and not for ulterior or extraneous reasons aimed at objectives which could defeat the
purpose of the Code.

In addition, it must be related in an objective sense to the performance of the employment concerned, in
that it is reasonably necessary to assure the efficient and economical performance of the job without
endangering the employee, his fellow employees and the general public.

The answer to the second question will depend in this, as in all cases, upon a consideration of the evidence
and of the nature of the employment concerned.


WORKERS’ COMPENSATION ACT

British Columbia employers are required to register with the Workers Compensation Board
(“WCB”) and abide by its scheme.

The scheme set up under the Workers’ Compensation Act allows workers to be compensated for lost
wages and expenses as a result of work place injuries and illnesses. The employer pays for this
scheme through assessments as a percentage of payroll. The amount of assessments are based on the
inherent danger of the employer’s industry and on the employer’s experience rating. The more
accident prone the employer’s work place is, the higher its assessments will be.

The benefit of the scheme to the employer is that the Act bars employees from suing their employers
or other employers for additional monies as a result of a work place injury or illness.

Occupational health and safety is also governed by this Act. The WCB has many inspectors
responsible for enforcing safety standards and the WCB is given extensive powers to compel
employers to provide a safe work environment.
BULL, HOUSSER & TUPPER FALL 2004






APPLIED SCIENCE 450
PROFESSIONAL ENGINEERING PRACTICE


ELEMENTS OF ENGINEERING LAW IN
CANADA




September 2005




APSC 450 Professional Engineering Practice 2
Elements of Engineering Law in Canada
I NTRODUCTI ON
Society today has placed considerable responsibility and trust upon the engineering profession as
a whole. In turn, the law has imposed heavy obligations upon the engineering profession. Given
the complexity of the engineering profession, engineers will commonly come into contact with
various legal institutions. In order to practice the profession of engineering effectively, it is
imperative that one be aware of the law and the corresponding duties that have been imposed
upon the profession. Therefore, an understanding of the basic concepts of the interrelationship
between engineering and law has become a necessity for today's engineer.

These notes have been assembled from notes originally written by staff at Lindsay Kenny,
Vancouver, BC. Additions have been made from three texts:

Marston, D. L., 1996. Law for Professional Engineers, 3
rd
edition. McGraw-Hill, Toronto.

Smyth, J . E., Soberman, D. A., and Easson, A. J ., 2004. The Law and Business Administration in
Canada. 10
th
edition. Pearson Education, Canada.

Willes, J . A. and Willes, J . H., 2004. Contemporary Canadian Business Law. 7
th
edition.
McGraw-Hill Ryeson.

Credit has been given where such additions have been made. However, all kinds of copyright
violations may exist. You may print one copy of these notes for your personal use.

DO NOT make additional copies or give your copy to anyone.

DISCLAIMER
These notes are provided strictly for educational purposes and to supplement lectures. They are
intended to provide a basic introduction to legal concepts. As such, they cannot be used as a
basis for making legal decisions that, in any case, should be made by legal professionals.




APSC 450 Professional Engineering Practice 3
Elements of Engineering Law in Canada
THE LEGAL SYSTEM IN CANADA
In Canada, as in the United States and the United Kingdom, there are two sources of law; the
common law and the statue law. Common law consists of rules or precedents developed by the
courts of the time. Statute law is found within the enactment of the legislative bodies, at the
federal, provincial and municipal level.

Common Law
Doctrines of contract and tort law that are applicable to engineers are common law doctrines.
These doctrines espouse rules and principles found in the decisions of the Courts. Common law
legal issues are determined by application of the principles of judicial precedent. J udicial
precedent is the process of extracting principles from previous decisions of superior courts which
are then binding upon inferior courts. Only principles that are essential to a superior court's
decision are binding on the inferior courts. In Canada, the highest court is the Supreme Court of
Canada, followed in descending order are the Provincial Courts of Appeal, and the trial courts.
There are also the Federal Appeal and the trail courts which deal with matters of federal
jurisdiction. Each court is bound by the decision of its higher court with all courts being bound
by the decisions of the Supreme Court of Canada. Foreign legal doctrine, such as from the
United States and the United Kingdom, which share legal systems and construction practices
similar to those in Canada, may be of considerable importance in the Canadian courts.

Statute Law
Statute law, like the common law, is also a primary source of law. Statutes serve several different
roles. On the one hand, some statutes codify law which has been developed by court decisions.
On the other hand, some statutes establish a principle of law, effectively overriding principles
previously set out by a series of court decisions. Statute law enacted by duly elected bodies is
paramount to court decided law, unless otherwise restricted by the Canadian Constitution.

Quebec
In England, and in the common law provinces of Canada, law is based on the decisions of the
courts as modified by statute. However, the province of Quebec is an exception. The province of
Quebec having its origins in the French legal system, follows the civil law, governed by the Civil
Code. The difference between the common law system and the civil law system is that judges do
not rely as heavily on precedent, instead the law in Quebec is deduced from principles laid down
in Codes enacted by the Legislature. From a practical standpoint, this difference means that when
configuring the law relating to engineers in Canada, one must note that rules established by case
law from provinces other than Quebec may not be applicable in Quebec, or vice versa.

Administrative Law
Both common and statue law have within them a body of law known as administrative law. It
relates to the limitation of and control over governmental power. Administrative bodies are
sometimes delegated the power to resolve disputes and complaints relating to economics, social
and professional matters, or to ensure that certain standards imposed by law are enforced. The
Workmen’s Compensation Board and the various provincial and territorial associations of
professional engineers are examples of administrative bodies.
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Elements of Engineering Law in Canada

Liability Insurance
Engineers may incur liability to their clients and third parties for their failure to perform their
professional obligations with reasonable skill, diligence and competence. Engineers
contemplating purchasing liability insurance must consider the following factors:

a) the scope of insurance coverage offered;
b) claims handling and defence capability;
c) other insurance related matters;
d) the financial strength and performance of an insurer; and
e) costs

When considering the scope of insurance coverage, an engineer must consider the time period
which the policy covers and the types of claims it will insure. Coverage is often on a claim to
claim basis. That is, claims are covered provided the claim is made within the period covered by
the policy.

The type of insurance coverage is also important. Some policies state that they cover services
customarily performed by engineers, while other policies may be more restrictive, limiting
coverage to the professional services for which the engineer is qualified.

When choosing an insurer, consideration should also be given to the insurer's claim handling
experience, ability and procedures, and financial strength and endurance.

An insurance policy will assist the engineer in two ways. First, it will provide financial
protection to the engineer against third parties who claim the engineer has been negligent.
Secondly, most insurance policies provide that the insurer will retain and pay a lawyer to defend
the engineer in the event of any court proceeding.
APSC 450 Professional Engineering Practice 5
Elements of Engineering Law in Canada
BUSI NESS RELATI ONSHI PS AND ORGANI ZATI ONS
An understanding of the forms in which individuals may associate for the purpose of carrying on
their professional business is important to the engineer. As an employee, he or she should
understand the business organization that he or she is part of. As a private practitioner he or she
should be aware of the different forms of association available. A fundamental relationship,
perhaps the “atom” of the business organization “molecules”, is that of the principal-agent.

Principal-Agent Relationship
As an engineer, you will quite likely initially be an employee of a business organization or
company which may be a sole proprietorship, a partnership, or a corporation. Owners of the
company (principals) may not practice engineering directly but will rely on skilled employees
(agents) such as you. This principal-agent relationship is a business relationship in its own right
and is typically established by an express agreement such as an employment contract.
1

Eventually you may find yourself in the position of employer. Consequently a basic
understanding of the principal-agent relationship (or master-servant relationship) and the relevant
law of agency will be helpful.

Authority of the Agent
An important aspect of the relationship is the ability of the agent to enter into contracts with third
parties. Thus, if you are employed by a company, you may be given the authority to purchase
items from suppliers or to form engineering contracts with clients. The rights and duties under
such agreements then become those of the principal and the agent has no rights or liabilities in
these agreements. The agent only has a duty to the principal and may not act for the principal and
a third party without the express consent of the principal. Thus, you cannot help the supplier
secure other sales or perform engineering services directly for a client without consent of the
company you work for.

Obligations of Principal and Agent
According to agency law, the principal has a duty to pay you, the agent, a reasonable fee for the
engineering services you render. The principal must also compensate you for any expenses
incurred in performing the services. Examples of such expenses might be airfares to job sites,
hotels at or near job sites, car rental, use of one’s personal vehicle, etc.

You, the agent, have a number of obligations to the principal. You must carry out all instructions
of the principal, assuming they are lawful. You must also maintain the confidentiality of any
information acquired as a result of your employment with the principal. Examples of such
information would certainly be engineering reports, company procedures, or compensation
packages of company employees. However, one can think of situations where the occurrence of
an argument between two co-workers or the fact that the president fell off his bicycle should be
kept confidential.

More generally, as an agent, you must place the principal’s interests above that of your own. You
must always act in the best interests of the employer; for example, obtain the lowest prices for

1
In special cases it may be established by conduct of the agent or principal or by necessity such as in an emergency.
APSC 450 Professional Engineering Practice 6
Elements of Engineering Law in Canada
items purchased from suppliers and the highest possible fees from clients. If you discover any
information that may materially affect the principal, you must bring that information to the
principal’s attention.

Liabilities
Your employment with the principal as an engineer implies that you have the competence or
special skills to perform the required work. Some employers may assist you with maintaining
such competence or special skill.

What happens if you fail to carry out the required engineering work according to accepted
standards and the principal you work for becomes liable for any consequent loss? This rarely
happens in a larger company where there exist many checks and balances to avoid such losses.
However, there are circumstances where the agent may become liable to the principal and/or a
third party for the loss. For example, if you are a free lance consultant to the principal, the
principal is your client and, unless the principal has assumed liability for your work via the
consulting contract, your liability insurance can be used to fully or partially compensate the
principal, depending on the size of the loss.

Termination of the Agreement
In the case of an employee contract, either the principal or agent, may terminate the agreement
by giving the other party a specified period of notice after which the agreement will terminate.
For example, if you find another job, you must inform your employer of your intent to leave after
the specified notice period. Likewise, if the company falls on hard times and cannot meet
payroll, they are required to inform you that your services will no longer be required after the
notice period. (You will then have experienced a “lay off”.) The employer is required to pay you
up until the end of the notice period and may be required to give you a severance package. This
is discussed in more detail under Employment Law.

“You’re fired!” Hopefully this never happens to you. However, in the absence of an agreement
to the contrary, an employer has the right to dismiss an employee without notice if the employee
has exhibited incompetence, negligence, or has engaged in conduct unbecoming a professional.
This is discussed in more detail under Employment Law.

If the agreement was established in order to complete a certain task, the agreement terminates
when the task is completed. This is typical in the case of free-lance consultants who may work
for several companies.

Sole Proprietorship
Sole proprietorship is the most basic form of business organization. It consists of an individual
professional who is alone and personally responsible for his or her work and the work of his or
her employees.

APSC 450 Professional Engineering Practice 7
Elements of Engineering Law in Canada
Partnership
A partnership is defined as an association of two or more persons in business sharing the risks
and profits. The rules and procedures that apply to partnership are generally set out in the
partnership acts of the various provinces.

Partnership is usually thought of as a legal entity as it can be sued, or sue, as a legal entity in
most jurisdictions.

When forming a partnership particular attention should be given to one's prospective partners.
Unlike other forms of association, in partnerships, each partner in the partnership carries
considerable say in how the partnership is run. Also, liability is not limited to the partnership's
assets.

Where the assets of the partnership are insufficient to cover the liability, the claimant may claim
against the partners' personal assets.

A partnership, as a contractual relationship, rests on the confirmed assent of its members to carry
on business together and, therefore, any event which destroys assent, or renders a party incapable
of carrying out business, will terminate the partnership. The partnership will be terminated in
situations of death or bankruptcy of a partner or by a unilateral declaration by one of the partners
that he or she is removing oneself from the partnership.

Incorporation
A corporation, unlike a partnership, is itself a legal entity, or person. It can hold and dispose of
property, sue and be sued in its corporate name. It is taxed as a legal entity. Its advantages
include perpetual duration, centralized management in the board of directors, free transferability
of interest, and, subject to limitations with respect to particular types of corporations, limitation
of shareholder liability for debts and the corporation to the extent of the obligation to pay for
corporate shares purchased.

In Canada, there are both federally incorporated companies as well as provincially incorporated
companies. If a company is incorporated as a federal company, it will be governed under the
Federal Canadian Business Corporations Act, (CBCA). If a company is incorporated as a B.C.
company it will be governed under the corresponding British Columbia statute called the British
Columbia Company Act (BCCA).

Unlike sole proprietorships which end with death or bankruptcy or a declaration of withdrawal
by one of the parties, a corporation will survive such events.

Choice of the Form of Business Organization
Several factors may affect the choice of a particular form of business organization. There are
advantages and disadvantages of each form. These are summarized in the table on the next page.
Note that in individual cases the importance and degree of the factors will vary.
APSC 450 Professional Engineering Practice 8
Elements of Engineering Law in Canada

FACTORS RELEVANT TO CHOOSING A FORM OF BUSINESS ORGANIZATION

Factor Sole Proprietorship Partnership Corporation
Difficulty in
establishment
Easy, little beyond
registration
Agreement and
registration
Significant, can be
complex
Cost Low Medium High
Maintenance Low Medium High
Ability to generate
capital
None beyond the
owner’s capital and
credit
J oint resources of
owners in capital and
credit
Highest, including
share offering
Difficulty in
management
Easiest, owner only Significant Highest
Liability of owner Near absolute Shared Little or none
Transfer of
ownership or
responsibility
Sale of assets only, with
assignment of contracts
More complex Easiest, by sale of
shares
Term of operation Maximum term
governed by life of
owner
Not beyond death or
bankruptcy of any
partner
Unlimited
Dissolution Easy More complex, can be
contentious
Most complex,
costly, often
contentious
Source: Willes and Willes, 2004, p. 250

Labour Law and Human Rights
In each province and in the federal domain there exist labour standard codes and other legislation
which establish a floor of rights regarding an array of employment benefits. They deal with such
areas as minimum wage, rest periods, holidays and vacation, maternity and parental leave, equal
pay for men and women, rights to notice and severance payments in termination of employment
situations, and protection against unjust dismissal.

In addition, there are human rights codes which protect against discrimination in the employment
context. Furthermore, there is also special legislation relating to areas of employment matters
that determine rights and obligations of employees and employers with respect to pension
benefits; labour relations; health and safety; non-payment of wages; workers compensation; and,
unemployment insurance.

In some cases, the terms of the employment contract between the employer and the employee
may trump the legislative scheme alluded to above. In other cases, in spite of the terms of the
employment contract, the rights and obligations as specified in the legislation may be binding.
Much depends on the drafting of the legislation and the terms of the employment contract.
Where the legislation makes mandatory and specific provisions, through its drafting, it cannot be
overridden by agreement. Consequently, to fully appreciate what one's rights and obligations are
APSC 450 Professional Engineering Practice 9
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as an employer or employee, one may have to look beyond the employment contract to the
corresponding legislation; a sometimes tedious but necessary task.

Ethical Obligations
Engineers owe a professional obligation to the public, their profession and their colleagues to
conduct themselves and practice their profession in accordance with ethical standards.

Engineering, as a self governing profession, is composed of members who qualify to practice in
their profession by attaining standards of education and practical experience. Typically, due to
the complex nature of engineering, a client is often ignorant of the services provided by
engineers. As a result, a client will place considerable trust and confidence in the ability of the
engineer. For this reason, the governing council of professional engineers in each province has
established a Code of Ethics which designates the standard of conduct required of professional
engineers in their relationship to the public, to their clients, and towards their colleagues. This
Code of conduct applies to engineers acting in their professional and even personal capacities.

In order to maintain the integrity of the profession in the eyes of the public, the governing
councils have the power to discipline members of the profession who are guilty of unprofessional
conduct, negligence or misconduct, or who otherwise violate the terms of the Professional Act
bylaws or Code of Ethics. To effectively exercise these powers, the council has the power to
inquire into the conduct of their members. Although the decision of the governing council is not
final as it is open to review by the Court, the Court rarely replaces the decision of the council.

APSC 450 Professional Engineering Practice 10
Elements of Engineering Law in Canada
TORT LAW
Tort law is a significant part of common law. The basic idea of the law of tort is that anyone is
under a duty not to cause foreseeable harm to another by wrongful act or omission. Tort law is
designed to compensate an injured party for the damage resulting from the wrongdoer's breach of
this duty. In order for an engineer to be liable under tort law, he or she must have breached an
obligation owed to the injured party by virtue of the specialized knowledge or skill possessed by
the engineer. (In other words, the engineer must have messed something up – big time.)

Negligence
Negligence law deals with claims for compensation from damage that result from a breach of a
standard of care. For an action in negligence to succeed, three elements must be established:

1) a duty of care owed by the Defendant to the Plaintiff;
2) a breach of the duty of care; and
3) damages caused by the breach of the duty of care.

As a general rule every person owes a duty of care not to cause injury to persons whom they
ought to reasonably anticipate would be injured by their act or omission.

Once it has been established that a duty of care does exist, it must be shown that the standard of
care has been breached by the defendant's conduct. This first requires establishing what
constitutes that standard. What is that standard of care? It is considered to be that of the ordinary
“reasonable person on the street”.

The standard of care for professionals such as engineers is determined in a different way. Owing
to their special place in society, professionals must exercise the same degree of skill and possess
the same level of knowledge as is generally expected of members of the profession. Two sources
are employed to determine those standards: written standards for conduct or written standards for
certain types of engineering design, and practitioners who will testify as expert witnesses what
they consider to be a proper standard. For example expert witnesses may be asked: Is this widget
normally used? Would other engineers design the system differently to avoid risks?

In addition to written standards and expert testimony, the courts also consider whether the skill
and knowledge of the engineer are commensurate with the engineering task to be undertaken. If a
professional has the required skill and knowledge and applies it, the required standard of care
would be met even though the design turned out to be defective or the advice turned out to be
wrong.

Once it has been established that the standard of care has been breached, it must further be
established that the damages for which compensation is sought are caused by a breach of the
duty of care by the engineer.

Damages recoverable under tort law are those which can be said to have been in the reasonable
contemplation of the parties at the time of the tort. This has been understood to mean that
APSC 450 Professional Engineering Practice 11
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damage of the sort which occurred was in a generally way foreseeable. Consequently, where the
damage that occurred is of a different type than that which was foreseeable, it is not recoverable.

Generally, where the negligence causes no physical damage to persons or property, but rather
affects only financial interests, the loss is not recoverable. But where such so called pure
economic loss arises from deliberate, non-accidental negligence, or fraudulent conduct, such loss
is recoverable.

Negligent and Fraudulent Misrepresentation
In addition to exercising care in one's conduct, the law also imposes a duty of care on
professionals or other skilled individuals who use their skills and knowledge to provide
information or advice to another party. It is not required that the information or advice provided
be accurate, only that the provider use care and skill to avoid misleading the other party.
Negligent misrepresentation is where both the duty of care and the duty to use the skill have
been breached. Negligent misrepresentations may also include the failure to disclose significant
matters.

For liability to be found it must be established that the provider of the information or advice
failed to take reasonable steps not to mislead, and that the plaintiff had relied upon the negligent
statements to his or her detriment, and such a reliance on the information or advice were
foreseeable to the reasonable person.

Example
Negligent misrepresentation can occur inadvertently in engineering reports or tender
documents. Disclaimer statements in such documents are required to inform the reader
that the contents of the document are for the use of the client only and apply to a certain
time frame. A disclaimer in a report written by an environmental consultant follows:
2

This report was prepared by Arthur D. Little of Canada, Limited for the account
of Noranda, Inc. The material in it reflects Arthur D. Little’s best judgment in
light of the information available to it at the time of preparation. Any use which a
third party makes of this report, or any reliance on or decisions to be made based
on it, are the responsibility of such third parties. Arthur D. Little accepts no
responsibility for damages, if any, suffered by any third party as a result of
decisions made or actions based on this report.

The report had to do with some mining properties owned by Noranda. Five years after the
report was issued, Noranda sold the properties to Wolverine Tube (Canada) Inc. and told
Wolverine that there was no need for an updated report. However, there was such a need
and Wolverine sued Noranda for negligent misrepresentation. Noranda then tried and
failed to sue Arthur D. Little. The disclaimer clearly absolved Arthur D. Little of any
duty of care to Noranda or to Wolverine at the time of the property sale.


2
Marston, D. L., 1996. Law for Professional Engineers, 3
rd
edition. McGraw-Hill, Toronto.
APSC 450 Professional Engineering Practice 12
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Notice in the above example that Wolverine tried to sue Noranda who then tried to sue Arthur D.
Little. Why did Wolverine not sue Arthur D. Little directly? The answer is they could have and
may have succeeded were it not for the disclaimer. A professional is normally responsible only
for information or advice provided to his/her client. However, in cases where it is intended or
foreseeable that the information or advice could be used by a third party (or parties) and the
professional was aware of this, the professional owes a duty of care to the third party.

Given the number of potential third parties that may rely on the advice of a professional, one
might think this duty of care to third parties could lead to unlimited liability and restrict the
ability of the professional to say anything useful or provide any meaningful information to a
client. The courts recognize this. Over the years a large body of case law led to a two part test for
liability to third parties:

1. Proximity of the relationship: Could carelessness on the part of the professional lead to
damage to the third party and could the professional reasonably know this?
2. Purpose and audience of the information or advice: The information or advice provided
by a professional is normally intended for a particular audience and only for a particular
purpose.

The first item is particularly relevant in cases where engineers prepare designs to be used by
others. In such cases there is a direct and foreseeable relationship between the engineers and the
users. The second item has been well tested in the courts in the case of accountants who prepare
financial statements of a company. These statements are to be used only to assist the
management of the company, not a person who may use the information to make a decision to
buy or sell the shares in the company. Despite this, accountants still insert disclaimers in
financial statements to define the audience. However, technical and engineering information is
perhaps different in that it can be used in a wide variety of ways and this makes it essential that
disclaimers be used to clearly state the intent and audience.

Here is an example of potential negligent misrepresentation that could be relevant after you
graduate.

“I’ve studied engineering hard and now I are one. Can I call myself an engineer?”
3
Generally, if you are not registered with a provincial association, you have to be careful
about this. Context is everything. In a social situation if someone asks what you do for a
living, you can say that you are an engineer. (Warning: this might be a conversation
stopper.) However, in other situations, care is required. As stated in Osborne
4
“… a duty
of care most commonly arises where the defendant has some special expertise,
knowledge, skill, information, or access to information that is not possessed by the
ordinary person.” In this statement, the defendant could be you if you said to a person
that you are an engineer, offered the person some design, advice, or other service based
on your special knowledge, the person acted based on your design or service, and damage
resulted.


3
Please ignore the bad grammar.
4
Osborne, P. H., 2000. The Law of Torts. Irwin Law, p. 162.
APSC 450 Professional Engineering Practice 13
Elements of Engineering Law in Canada
When you graduate and become employed, your employer may give you a business card
labeling you “J unior Engineer”, “Systems Engineer”, or something with the word
engineer in it. Again, context is everything. If the company normally engages in
engineering work, then the ordinary person, usually a client, could be expected to know
this and would also expect that your advice or work would be reviewed by the
experienced, registered engineers in the company. (They should be, so don’t go giving
advice or providing designs if you are not sure.) However, if you are the only engineer in
a company of say, bicycle manufacturers or programmers, then calling yourself an
engineer of any kind could lead to trouble.

Registered or not, deliberately misleading someone is a very bad thing to do. An engineer may
be liable for fraudulent misrepresentation if:

a) he or she makes a misrepresentation;
b) knowing it to be false;
c) intending it to be acted upon by its recipient;
d) which was in fact acted upon by the recipient;
e) resulting in damages to the recipient.

Vicarious Liability
In the context of employer/employee relations, the employer may be held liable for the
negligence of the employee. This is known as vicarious liability and it is based on the idea that
those who profit from an activity should also be liable for losses due to that activity. To establish
vicarious liability, negligence must be proven and in addition it must also be shown that the
employee's negligent conduct occurred while acting in his or her role as an employee.

It is important to establish whether an employer/employee relationship exists. Generally, if an
employer directs what work is to be done by a person and the manner in which it is to be done,
and remunerates the person for the work, then the person is considered an employee. If such
control is not present, then the person is an independent contractor. However, if the relationship
between an owner/employer and a person is complicated (e.g., part-time work, casual or
intermittent work, outsourcing of non-core activities, short-term contracts, etc.), this test for
employment is inadequate. As a result of several cases, the courts have specified four factors as a
test for employment of a person:

1) the degree of control by the owner/employer over the person as to what work will be
done and how it will be done
2) the ownership of tools or equipment
3) the opportunity for profit – if there is no opportunity for profit (i.e., income from work
exceeds costs associated with doing work), then the person is an employee
4) the risk of financial loss

A finding of vicarious liability of the employer for the acts of the employee, however, does not
necessarily excuse the employee from being found independently liable in tort. The possible
APSC 450 Professional Engineering Practice 14
Elements of Engineering Law in Canada
relationships are shown below.
5
Suppose the victim V is injured by A while A is acting in the
course of his employment. V can sue A in tort [1]. V can also sue the employer B [2], who will
normally have a greater ability to pay damages. (In practice, V will likely sue both A and B.) If
V does sue A, it is possible that A will be indemnified by B [3] as part of an employment
contract. Alternatively if B has to compensate V, B may be able to sue A [4]. In all these
potential lawsuits, consideration must be given to the ability of the various parties to pay.
6

V
1
2
3
4
A
B


For the above relationships to hold, it is not necessary that there be an employer/employee
relationship. If the wrongful actions or omissions are the result of activities of volunteers,
independent contractors, or others as sanctioned by an employer, the employer may be liable.

Example
7
Imperial Contractors contracted with Parkinson Corp to build a waste processing plant.
During testing of the plant, several workers suffered respiratory damage as a result of the
release of toxic gases. The accident is the result of inadequate protection provided by
Imperial Contractors against such releases. Imperial Contractors and not Parkinson Corp
would very likely be liable for the injuries.

On the other hand, Parkinson does have a duty to take reasonable care to hire competent
engineers and contractors. Also, if the construction and testing work is inherently
dangerous to third parties, Parkinson has an obligation to see to it that the contractor takes
reasonable precautions to avoid damage or injury.

5
Smyth, J . E., Soberman, D. A., and Easson, A. J ., 2004. The Law and Business Administration in Canada. 10
th

edition. Pearson Education, Canada. p. 48
6
Commonly phrased as the question: “Should we try to extract blood from this stone?”
7
Smyth, J . E., Soberman, D. A., and Easson, A. J ., 2004. The Law and Business Administration in Canada. 10
th

edition. Pearson Education, Canada. p. 386 (with adaptation)
APSC 450 Professional Engineering Practice 15
Elements of Engineering Law in Canada
Product Liability
The area of tort law which concerns itself with products having caused damage is called product
liability. Here the same principles of tort law, such as negligence and fraud apply. However,
some complexities arise. Consider the following examples and ask who should be liable.
8

Example 1
X runs a small refreshment booth at a beach and buys supplies from Y Bottling Co. He
sells a dark green bottle of ginger ale to A who gives it to her friend B. B drinks half the
contents and becomes violently ill. The remainder of the bottle is found to contain a
decomposed snail. B is hospitalized and is unable to return to work for several weeks.

Example 2
P buys a Q company sports car from a dealer R. On being driven away from the
showroom, the car loses a defective front wheel and collides with a parked vehicle,
injuring the occupant, S.

Example 3
M bought from ski shop N a set of thermal underwear manufactured by O company.
Although it was inspected, the underwear contained a toxic acid and when it came into
contact with perspiration caused M a severe burn.

Example 4
J buys a bottle of cough medicine, manufactured by K company, from her local
drugstore. To try to get rid of her cold she drinks two stiff whiskies, takes a dose of the
medicine, and goes to bed. During the night she has a heart attack. The cough medicine is
extremely dangerous if taken with alcohol, but there was no warning to that effect on the
bottle or package.

A retailer may be liable to the buyer for breach of an implied contractual undertaking that the
product is not defective. Thus the injured party may seek compensation by suing for breach of
contract. However, where there is no contract between the injured victim and the party
responsible for the product, the victim can sue the provider in tort for the damage caused by the
product. In Example 1, X sold the soft drink to A, not to B the injured party. Thus there is no
contract with B and B must sue X and/or Y Bottling in tort to claim damages. Similarly, in
Example 2, the injured party S has no contractual relationship with the dealer R, but could sue
company Q in tort.

Example 3 illustrates the principle that manufacturers may be liable for all defects in their
products which, given the available technology, can be reasonably expected to de detected. The
claim that additional inspection will add to the cost of production will not be accepted – you
cannot knowingly make defective products that could cause harm. This has implications for
methods of detecting defects. If the defect is such that the product could cause harm, then
detection by sampling methods is not acceptable.

8
Smyth, J . E., Soberman, D. A., and Easson, A. J ., 2004. The Law and Business Administration in Canada. 10
th

edition. Pearson Education, Canada.
APSC 450 Professional Engineering Practice 16
Elements of Engineering Law in Canada

Example 4 goes one step further. Although the product may not be defective, there may be
dangers if it is not used properly or if dangers could result from its use. Manufacturers owe a
continuous duty of care to consumers to warn of such dangers, even after the product is on the
market. However, to successfully claim damages, a plaintiff must satisfy the court that had a
warning been given, the product would not have been used in the way it was used.

Disclaimers
Sometimes the liability associated with the use of a product can be avoided by means of a
disclaimer statement that specifically describes the conditions under which the product is to be
used. These are useful and essential to avoid “obvious” potential liabilities. However, one can
well imagine the difficulty of wording a disclaimer that deals with all possible uses.

Example
The text of part of the disclaimer of a manufacturer of computer and electronic products
is shown below:

Warranty does not apply if the product has been altered, modified, or damaged.
xxxxxxxx makes no other warranty of any kind, expressed or implied, including
any warranty of merchantability, fitness of the product for any particular purpose
even if that purpose is known to xxxxxxxx, or any warranty relating to patents,
trademarks, copyrights or other intellectual property. xxxxxxxx shall not be liable
for any injury, loss, damage, or loss of profits resulting from the handling or use
of the product shipped.

For things like computers and electronic products which can be used in a variety of
applications, this might keep them out of trouble. Wording is everything and lawyers
should write such disclaimers. However, note that this applies to all their products. What
if one of the products could only be used in a very small number of applications for
which the risks are or could be well known?

Disclaimers cannot absolve a manufacturer or provider of services in the case of gross
negligence which is the failure to use even the slightest amount of care in a way that shows
recklessness or willful disregard for the safety of others. It is difficult to conceive of cases in
engineering practice where gross negligence would occur since engineers are, by training,
sensitive to the safety and well-being of the public. However, for the sake of an example,
consider a company that offers rock climbing tours, a high risk recreational activity. If a tour
member is injured when safety equipment provided by the company unexpectedly fails, a valid
release form (read, disclaimer) signed by the tour member may protect the company from a
lawsuit. However, if the company knows beforehand that the equipment is defective and uses it
anyway, it would not be protected by the release.

The complexity and sophistication of manufactured products makes it difficult for
manufacturers, distributors and consumers to detect dangers in a product. Thus, failing to
discharge the continuous duty of care and to warn consumers or users of the potential dangers of
a product becomes an expected risk of doing business.
APSC 450 Professional Engineering Practice 17
Elements of Engineering Law in Canada

The learned intermediary
There is a variation of the continuous duty to warn. This is where the product is technically
complicated and requires expert knowledge for its use, or where the nature of the product is such
that it is impossible for the consumer to receive a warning directly from the manufacturer. In
such cases the duty to warn may be discharged by issuing a warning to a learned intermediary
who then has a duty to transmit the warning to the ultimate consumer or user.

There are many opportunities for engineers to become learned intermediaries. Manufacturers
may warn them of the dangers or risks of products or equipment to be used in the design of other
systems. It is then essential that the engineers tell the owners or ultimate users of the system of
the dangers or, if possible, make changes to the design that will mitigate the risks. This is
important for engineers involved in sales or as consumers of products used in the course of their
work.

However, a manufacturer cannot assume that an engineer or similar technical professional
becomes a learned intermediary once informed of any dangers associated with use of its product.
The following case illustrates this.

Bow Valley v. St. John Shipbuilding et al
Bow Valley Industries retained Saint J ohn Shipbuilding to construct a drilling rig off the
Grand Banks of Newfoundland. Bow Valley wanted a heat trace system provided by
Raychem to help prevent the pipes from freezing during winter operation. Bow Valley
specified insulation known as Thermaclad, also manufactured by Raychem, to keep
moisture from the insulation and the heat trace wires.

A fire broke out on the rig which caused extensive damage to electrical and
communication cables. The Thermaclad insulation was completely incinerated and this
may have contributed to the extent of the damage. The rig had to be towed back to shore
and was out of commission for several months. Bow Valley sued St. J ohn and Raychem
for negligence, claiming that they had a duty to warn Bow Valley of the fire risks
associated with using Thermaclad.

Raychem had detailed knowledge of the inflammability characteristics of Thermaclad
through its own testing. St. J ohn requested Raychem for these test data. However, it was
held that Raychem could not treat St. J ohn as a learned intermediary between itself and
Bow Valley for three reasons: 1) St. J ohn was not as “learned” as Raychem, 2)
Thermaclad was not a technically complex product requiring supervision in its use, and
3) because it was possible for Raychem to directly inform Bow Valley of the risks. It was
also held that Bow Valley, despite the fact that it knew that Thermaclad would burn
under some circumstances, had not accepted the risks of using Thermaclad. It therefore
followed that both St. J ohn and Raychem owed Bow Valley a duty to warn.

Product liability is one of the most common forms of potential liability facing an engineer today.
Unless liability is clearly, reasonably, and responsibly disclaimed, and/or the duty to warn has
APSC 450 Professional Engineering Practice 18
Elements of Engineering Law in Canada
been discharged, an engineer who designs or manufactures a product which causes damage as a
result of a defect which arose from the engineer’s negligence, the engineer can be found liable,
regardless of who is injured or to whom the damage resulted.

The principal relationships in product liability
The various relationships associated with product liability are illustrated below.
9
A manufacturer
M sells a product to retailer R which sells it to purchaser P. The product is defective and injures
P and a third party T. P can sue R in contract and R can sue M for its loss, also in contract. P and
T can sue M in tort. T might also be able to sue R in tort, if R should have discovered the defect.
A learned intermediary L may be present who, based on information from M, would inform R, P
and possibly T of problems or dangers associated with the use of the product.

R M
T P
contract
c
o
n
t
r
a
c
t

tort
t
o
r
t

L



Other Torts
Tort law is continuously developing as more people find more ways to sue their fellow occupants
of this planet. The list includes: public and private nuisance, trespass, assault and battery, false
imprisonment, defamation, and economic torts.
10
Assuming that your future engineering practice
falls into the “normal” category, only the torts of private nuisance, trespass and defamation will
be relevant.

Private Nuisance
A private nuisance is the interference with an occupier’s use an enjoyment of his or her land.
11

Property owners (and tenants who may be on the property) have a right to normal use and
enjoyment of their property, free from interference such as noxious fumes, excessive noise, or

9
Adapted from Smyth, J . E., Soberman, D. A., and Easson, A. J ., 2004. The Law and Business Administration in
Canada. 10
th
edition. Pearson Education, Canada. p. 57
10
Smyth, J . E., Soberman, D. A., and Easson, A. J., 2004. The Law and Business Administration in Canada. 10
th

edition. Pearson Education, Canada. pp 60-64.
11
A public nuisance involves such things as misconduct in a public place or emitting dangerous gases or substances.
Most of these nuisances may be dealt with by the criminal code but the perpetrator may be liable to those who
suffered more damage than other members of the public.
APSC 450 Professional Engineering Practice 19
Elements of Engineering Law in Canada
liquids that find their way into the structures or water (including groundwater) that normally
occupy the property.

Trespass
Trespass is defined as entering another's land without justification or authority. There are some
points to remember with regard to trespass.

• Defense of Property: A verbal request for trespasser to leave is required prior to using
reasonable force if verbal request is unsuccessful.
• Necessity: - Trespass may be defensible if the trespasser’s presence is of necessity (e.g.,
seeking shelter in a life-threatening situation)
• Legal Authority: - For example, a police officer with a search warrant has legal authority

Trespass may not necessarily be the entry of one or more people onto a property. Trespass can
occur, for example, by drilling under a property
12
, by using a property to transport materials,
even for a brief time, or by installing something on or near a property boundary such that even a
small part of it lies on both properties.

Defamation
Defamation is making an untrue statement that causes injury to the reputation of another. There
are two types: libel, a written defamation and slander, a spoken defamation. The test to
determine if defamation has occurred is whether the character, ability, and business reputation of
the plaintiff were harmed in the eyes of the public.

There are some defenses to the accusation of defamation:

• Truth of statement: The alleged defamatory statements are true. However, the
defendant must prove that they are true and this could be difficult.
• Absolute privilege: Complete immunity from liability for defamation exists in courts,
parliament, inquiries etc. This is considered to be in the public interest.
• Qualified privilege: There is immunity from liability for defamation provided a
statement was made in good faith and with an honest belief in the accuracy of the
statement. For example, letters of reference are subject to qualified privilege; if the
statements had to be defended in court, it would be difficult to get such letters.
Criticism in the press and statements made in administrative tribunals are other
examples of qualified privilege as long as there is an honest belief in the opinions.




12
There is one famous case of a mine in the southern US that mined under a resort area. One day the lake in the
resort drained rather quickly. Fortunately this happened early in the morning and no one was on the lake or in the
mine. This could be both trespass and private nuisance.
APSC 450 Professional Engineering Practice 20
Elements of Engineering Law in Canada
CONTRACT LAW
Engineers are involved in a variety of contracts. One of the more important types of contract is
between an engineer and an owner of a project. Engineers are often involved in administering
contracts between owners and contractors; contractors and sub-contractors; employment
contracts and contracts for supply of goods and services.

A contract is a legally enforceable promise. Contract law is unique, it permits the parties to
contract their own legal relations to determine what obligations it will accept.

The rules of contract law define when a contract arises, how it is interpreted and what legal
consequences that flow from it.

Elements of a Contract
There are three essential elements of a contract:

• an agreement between the parties;
• consideration made by the promisee to the promisor; and
• intention to create legal obligations.

Agreement
The first of the essential elements of a contract is to know when and how one is formed.
Generally, a contract is formed when one side makes an offer and the other side communicates
an acceptance of that offer. This may occur in one of the following three ways:

1) an act for a promise - the offerer by his or her act indicates that he or she is willing to
provide a service of goods, and the offeree accepts by taking the service of goods,
impliedly promising to pay for them,
2) a promise for an act - such as a situation involving an invitation to submit irrevocable
tenders; when the tenders are submitted, a contract precluding withdrawal of the tenders
is created,
3) a promise for a promise - such as a situation where an offer by an owner to promise to
pay in exchange for a promise by an engineer to provide design and supervisory services.

The Offer
The following characteristics of an offer should be kept in mind:

• An offer is a tentative promise made by the offeror, subject to conditions or involving a
request to the other party, the offeree.
• An offer must contain sufficiently definite details, such that upon its acceptance the
contract is formed.
• An offer is distinguished from an invitation to treat; upon acceptance of an offer a
contract is formed; whereas an invitation to treat merely indicates a willingness to receive
offers.

APSC 450 Professional Engineering Practice 21
Elements of Engineering Law in Canada
The Acceptance
The following characteristics of an acceptance should be kept in mind:

• The offeree must agree to the conditions or request made in the offer.
• For acceptance to create a contract, it must be in the same terms as the offer.
• For a valid contract, the acceptance must be communicated to the offeror; once accepted
and communicated, a contract is formed and the offer cannot be withdrawn.

The general rule is that an offer is not considered accepted until the offeror receives the
acceptance. However, an exception to this rule was made in England in the 1800s for offers and
acceptances posted in the mail. This has become known as the post-box rule and it may be
written as:

An offeror who uses the post office to send an offer is assumed to be willing to have the
same means used for acceptance. The offeree completes an acceptance when a properly
addressed and stamped letter of acceptance is placed in the mail.

From this it follows that the offeror may be bound by a contract without knowing it exists but the
offeree would know that it exists. The reason for this is related to an allocation of risk: The
offeror took a chance that the post office will deliver the offer on time and therefore should be
willing to accept the risk that the letter of acceptance will not arrive. However, an offeror could
require a specific means of communication in the offer.

The making of a counter-offer is quite common in most business transactions. However, it must
be noted that when a counter-offer is made, the earlier offer has been rejected and ends.

Example
A sent a fax to B offering to sell her car for $2000. B replied (counter-offered) by fax: “I
will give you $1900 for your car.” Nothing was heard from A for two days. B, who had
(ahem) non-business interests in A and did not wish to offend her, finally sent a fax to A
saying: “I have reconsidered and will buy your car for $2000.” (i.e., B will accept A’s
original offer to sell.) However, there is no contract since B’s counter-offer brought A’s
original offer to sell for $2000 to an end. For a contract to exist B must explicitly make an
offer to buy and A must accept it.

B has made a new offer that A may or may not accept. If instead of counter-offering, B had
simply asked if A were willing to consider a lower price, the original offer would still stand and
B would be free to accept it within a reasonable period of time.

Consideration
For a promise to be legally enforceable the recipient of a promise must give something in
exchange for that promise. That something is called consideration. Consideration may take the
form of: another promise; an act; or the payment of money.

APSC 450 Professional Engineering Practice 22
Elements of Engineering Law in Canada
Engineers are typically really nice people and some have an annoying tendency to provide
services to friends or friends of friends without fee. Such offers are called gratuitous promises.
Even though the offer of such services is accepted, there is not adequate consideration (in fact,
there is no consideration) and there is therefore no enforceable contract.

Despite the lack of enforceable contract, once a promisor begins to perform a service without
consideration, he or she has a duty to carry it out with reasonable care. If damage results from the
performance, the promisor may be liable according to the law of torts.

Gratuitous promises can cause trouble even when a contract is in place.

Example
A held an option to purchase certain mining claims from B provided a certain amount of
work was done on the claims before an expiry date. However, before the expiry date A
realized that he would not be able to complete the work. B understood this and agreed to
allow A to proceed with the work. As a result, A did not hurry to complete the work
before the expiry date, but did complete it soon after. However, B then refused to sell the
claims saying that the original expiry date applied. A brought the case to court. The court
did not allow B to revert to the original expiry date.

This is a case of promissory estoppel or equitable estoppel.
13
B made a gratuitous promise to A
by agreeing to extend the expiry date. However, there was no consideration (e.g., a signed
document or payment of cash by A to B) to make the promise enforceable. Thus there should be
relief for the party that relies on the gratuitous promise, in this case A, who acted on B’s
agreement that A could proceed with the work after the expiry date.

Intention to Create Legal Obligations
In looking at the various elements required to find a contract, the courts are really trying to
ascertain whether it can be reasonably inferred from the conduct of the parties that they intended
to create legal obligations. The mere fact that one party may have private reservations about
entering into legal relations with the other party may not suffice to render the agreement
unenforceable.

Problems Arising out of a Contract
Numerous other problems may arise to make the contract unenforceable:

Certainty of Terms
A disagreement may arise over what the terms of the contract really mean. Where the terms are
so unclear, the contract may be held to be unenforceable for lack of certainty. This is rarely
found where the parties themselves treated the contract as binding.

Situations may arise where work proceeds before a contract is formally accepted or before all
details of the contract have been agreed upon. In such cases the question may arise whether the

13
estopped =prevented
APSC 450 Professional Engineering Practice 23
Elements of Engineering Law in Canada
formal contract, once formed, applies to the work already performed. Whenever possible, the
courts will imply a term of retrospective operation of the contract provisions or will view the
final acceptance as applying retrospectively to work done in anticipation of the eventual
acceptance.

Agreements to Agree
Some agreements may be found to be unenforceable as they may constitute agreements to agree.
An agreement to agree differs from a binding contract, in that it leaves a central matter to be
agreed upon at a later date. However, where the parties indicated a genuine intention to enter into
a binding contract and the missing terms are not essential, the court may find the contract
enforceable.

Misrepresentations
J ust as misrepresentations are cause for concern in tort law, they are equally a concern in
contract law. Where a representation is false and is relied upon by the other party, the contract
may be held to be unenforceable. Misrepresentations may be innocent or fraudulent. Fraudulent
misrepresentations occur when the parties knew it was untrue or acted recklessly, without
concern for its truthfulness. The distinction between fraudulent and innocent misrepresentations
is relevant because the legal remedies differ for each.

Termination of Contract
A contract can be terminated in the following ways:

• when all parties have performed all obligations under it;
• at any time by mutual assent of all the parties; and
• where one party to the contract breaches the contract by indicating, either by word or
conduct, that it no longer intends to be bound by the contract. When this occurs, the
innocent party has two options: maintaining the contract in force and suing on it, or
alternatively, accepting the repudiation as terminating the contract.

Classification of Contracts
In addition to expressed terms when all terms are expressly stated, the court may find terms
which are implied in the contract. The court may imply terms where it is satisfied that the parties
actually intended the term in question and would have included it, had it been drawn to their
attention at the time the contract was made, although this is rare and only happens when
necessary. An example of implied terms - that materials and workmanship shall be of proper
standard or quality and the design shall be suitable to the task.

An agreement may also be purely oral, with the exception of those sorts of contract which fall
under the Statute of Fraud found in most Canadian provinces. These statutes provide that certain
contracts, such as those involving the sale of land, must be in writing. Notwithstanding this
requirement, it is still advisable to have agreements in writing for purposes of certainty and
proof. A valid oral agreement, even one accepted by the courts, cannot contradict a term or terms
in a written contract.
APSC 450 Professional Engineering Practice 24
Elements of Engineering Law in Canada
FIDUCI ARY DUTY
In addition to duties under tort and contract, the engineer (or any professional, for that matter) is
a fiduciary as a result of the special nature of relationships with employers, sub-contractors, or
clients and has a fiduciary duty to these parties. There are three general characteristics of a
fiduciary relationship
14
:

• The fiduciary has scope for the exercise of some discretion or power.
• The fiduciary can unilaterally exercise that power or discretion so as to affect the
beneficiary’s interests.
• The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the
discretion or power.

Duties of Confidentiality
Often the engineer will have or be privy to trade secrets or special know-how of an employer or
client. Consequently, it is likely that the contract between the engineer and his or her client or
employer will require a duty of confidentiality, which will apply during and after the period of
engagement. Where the engineer is serving strictly as an employee, it is likely, that his or her
employment contract will spell out the extent of his or her duties to keep information gathered on
the job confidential. Where the engineer simply has a contractual relationship with another party,
the duty of confidentiality may be spelled out in the contract to supply goods or services.

The drafting of these clauses may imply more than simply a duty to keep information
confidential. It may impose upon the engineer a greater degree of loyalty. It may restrict the
engineer's future activities, such as limiting with whom he or she can work. Therefore, it is
recommended that the engineer get a clear picture of the scope of his duties to the employer at
the time of contracting.

Possibly, due to the nature of the relationship, even where the contract does not expressly state
the duties of confidentiality, the courts may imply such duties into the contract. Therefore, in
sum, the engineer should bear in mind, that often, whether expressly stated or not, there is a duty
to keep information learned confidential.

Conflict of Interest
Situations involving a conflict of interest are another example of a breach of fiduciary duty. A
simple definition of a conflict of interest is where a duty is owed to two or more parties whose
interests may be competing. Many examples of these occur in engineering practice. A large
consulting engineering company may have employees whose sole task is to ensure that the client
for one contract is not in competition with another client. Another example is where your sister
works for a supplier of equipment to one of your clients. If you recommend only the supplier’s
equipment to the client, perhaps to keep your sister employed and despite the higher price and
lower quality of the equipment, you could be in a serious and obvious conflict of interest. Often

14
Smyth, J . E., Soberman, D. A., and Easson, A. J., 2004. The Law and Business Administration in Canada. 10
th

edition. Pearson Education, Canada. p 71.
APSC 450 Professional Engineering Practice 25
Elements of Engineering Law in Canada
these cases have ethical implications only. However, if damage to a client results from the
conflict of interest, the court may find the fiduciary liable for the loss.

UNJ UST ENRI CHMENT
Outside of the areas of tort and contract law, there exists a growing area of law which has its
roots in the notions of equity and fairness. This area is known as the law of restitution. The law
of restitution provides compensation for situations of unjust enrichment, which occur when one
party is enriched at the expense of another without legal justification. When this is found to have
occurred, there are two possible remedies: quantum meruit or a finding of a constructive trust.

For a finding of unjust enrichment, there is a three part test:

For the principle to succeed, the facts must display an enrichment, a corresponding
deprivation, and the absence of any juristic reason, such as contract or disposition of law
for the enrichment.

It should be noted that doing something for free may not lead to an unjust enrichment.

An example of the situation where an unjust enrichment may be found to have arisen, is when an
engineer may perform some work for a property owner on the expectation of receiving some
benefit, such as future referrals, but such referrals are not forthcoming due to a falling out
between the parties. It may be said, that the services provided by the engineer constituted an
unjust enrichment to the other party, and compensation may still be possible under the law of
restitution. The property owner was enriched, the engineer suffered a corresponding deprivation,
and there was no legal reason for the enrichment because there was no contract between the
parties. This example illustrates the power of the law of restitution and the possibility of recovery
where otherwise not possible under contract or tort law.

Quantum meruit is the amount a person deserves for services rendered. When goods or services
are requested, there is an implied promise for payment of what the goods or services are
reasonably worth. The court may order the paying of money by the party unjustly enriched to the
other, equivalent to the value of services rendered, as valued by the court.

Example
A asks an engineer B for technical assistance with an electronic circuit. Afterwards A asks
B what her fee is and B suggests a certain sum. A refuses to pay it. In an action for
payment for services performed, the court may give judgment in favour of B in the
amount she requested or for some other amount it finds reasonable.

If instead, A had agreed to the figure suggested by B but later changed his mind about
paying, the court would not concern itself with what it considered reasonable. It would
give judgment in favour of B for the amount agreed upon.

Alternatively, the court may find that the other party has constructive trust over the property
owned by the unjustly enriched party as a result of the unjust enrichment and, therefore, the true
owner of that property is the other party. Constructive trust remedy is only found where the
APSC 450 Professional Engineering Practice 26
Elements of Engineering Law in Canada
unjust enrichment was of a nature that it made substantial contributions to the property in
question. This might arise in the above example if B made substantial contributions to the circuit
design – the court may grant her ownership of all or part of the circuit and even related
components.

CRI MI NAL LI ABI LI TY
In addition to be civilly liable under tort and contract law the engineer, like anyone else in
society, may be held criminally liable for the same acts, should they be in violation of the
provisions set out in Canada's Criminal Code. The two systems of liability, civil and criminal,
are independent of each other; consequently it is possible to be found liable in both for the same
act, or for different acts.

Unlike a civil proceeding, in criminal proceedings it is the state, in the form of a crown council,
that brings the action against the party charged with committing a criminal offence. The most
significant difference in the proceedings is that standards approved in criminal proceedings are
greater than in civil proceedings. In criminal proceedings, to convict, the crown must establish its
case beyond a reasonable doubt, whereas in a civil proceeding the Plaintiff must establish its case
on the preponderance of the evidence, or a balance of probabilities.


APSC 450 Professional Engineering Practice 27
Elements of Engineering Law in Canada
DI SPUTE RESOLUTI ONS
Where a dispute arises between an engineer and another party, there are various methods of
resolving dispute.

The Court System in B.C. consists of two types of trial courts and a Court of Appeal. The lower
trial court is called the Provincial Court. It deals with criminal matters, family matters, youth
matters, traffic and municipal bylaw matters and small claims matters. The Supreme Court of
B.C. is the province's superior court. It hears all kinds of civil cases. The Court will likely also
hear very serious criminal cases. Where a civil action is brought for a sum below $10,000.00 it
likely will be heard in Small Claims Court (a less expensive process) part of the Provincial
Court. Where the sum is for $10,000.00 or greater, it will be heard in the Supreme Court of B.C.

Once a dispute has gone to trial and a decision has been rendered, a party to the dispute may
want to appeal the decision. The Court of Appeal, the highest court in the province, will hear the
appeal. This court sits three to five judges, and hears appeals from both the Provincial Court and
the Supreme Court. The Supreme Court of Canada, the highest court in the land, which sits in
Ottawa, is the only court which hears appeals from the B.C. Court of Appeal. There is also the
Federal Court system, with trial and appeal courts. This court has jurisdiction to hear matters of
maritime law, judicial review of federal powers, intellectual property law, and the like.

CIVIL LITIGATION
The process of civil litigation involves strict procedures and deadlines. To initiate a lawsuit, the
Plaintiff's lawyer files a Writ of Summons and a Statement of Claim. This document spells out the
facts alleged by the Plaintiff and his or her grievance. Within a prescribed period, the Defendant
must file an Appearance, which indicates who his or her lawyer will be and his or her intention
of defending against the claim. Shortly thereafter, the defendant's lawyer files a Statement of
Defence, wherein the Defendant responds to the Plaintiff's Statement of Claim, admitting,
denying or providing his or her own version of events. In the Statement of Defence the
Defendant may also counter sue the Plaintiff. The Plaintiff then has the opportunity to respond to
the Defendant's filings.

Once both parties have filed their respective documents, they agree to set down the dispute for
trial. In preparation for the trial, each party may examine the other under oath in what is called an
Examination for Discovery. Other procedural requirements include Discovery of Documents and
written questions and answers in the form of Interrogatories. Failure to comply with the
procedural requirements may result in various motions to the Court for relief.

Finally, it should be noted that where the issues are clear and the facts not greatly in contention,
the parties may agree to proceed with a streamlined trial under Rule 18A of the B.C. Supreme
Court Rules.

Alternative Dispute Resolution Techniques
There are a variety of forms of dispute resolution other than litigation. These other forms include
arbitration; conciliation; mediation; and, fact finding.

APSC 450 Professional Engineering Practice 28
Elements of Engineering Law in Canada
Arbitration
Arbitration is a process of dispute resolution by an independent third party, outside the court
system which is governed by the Arbitration Act in force in the province in question. The basis
of the process lies in a written agreement by the parties to submit present or future differences to
arbitration. Such an agreement may have been entered into as a term in the written contract
between the parties or may be entered into separately by the parties after the dispute has arisen.
Furthermore, unless the arbitration specifies otherwise, the standard provision of the various
provincial acts governing the conduct of arbitration apply.

The independent third party may be an arbitration board or a sole arbitrator. An arbitration board
typically consists of three members, one selected by each of the parties in the dispute, the other
selected by the persons so nominated.
15
The board or sole arbitrator is expected to hold a hearing
or hearings during which each party is given the opportunity to present their side of the dispute.

Although the exact procedures of the hearings may be established by the parties involved,
arbitration must be carried out in a fair and unbiased manner in which witnesses are examined
under oath and a thorough investigation is made of the circumstances of the dispute. If it is
determined that the procedures do not satisfy the conditions of fairness and lack of bias, then the
decision of the arbitration board may be quashed by the courts.

Conciliation
Conciliation involves a neutral party, known as the conciliator. The function of the conciliator is
to move back and forth between the parties involved in an attempt to find a common ground
upon which to resolve the dispute.

Mediation
Not unlike a conciliator, a mediator plays a neutral role while trying to establish common ground
between the parties in dispute. The key difference between a mediator and a conciliator is that,
generally, a mediator will play a more intrusive role in the proceeding than would a conciliator.
For instance, a mediator will set an agenda for the discussion and will try to keep the parties on
track.

Fact-Finding
A fact-finding process, also known as a non-binding arbitration, involves a neutral fact finder,
who collects relevant information and other such evidence that supports the parties' positions and
issues an advisory opinion. The role of the opinion is to aid the parties in their negotiations.

Administrative Tribunals
Administrative tribunals are specialized tribunals created by law, which possess quasi-judicial
powers. They are created because the area in which they adjudicate is so specialized that it is
better run by members with certain expertise.


15
Odd numbers of members of an arbitration board should be selected for obvious reasons.
APSC 450 Professional Engineering Practice 29
Elements of Engineering Law in Canada
There are generally two kinds of administrative tribunals. There are the permanent authorities
that come to life and function under enabling legislation such as the Workers Compensation
Board. There are also tribunals of a less permanent type such as ad hoc authorities like royal
commissions or public inquiries.

Common Tribunals
The following are some common Tribunals:

a) The Association of Professional Engineers and Geoscientists of BC has jurisdiction to
deal with complaints about registered members. Upon hearing such a complaint,
APEGBC may form an investigative committee to determine whether disciplinary
action is necessary.
b) The Commercial Appeals Commission has jurisdiction to hear appeals from decisions
made under 13 statutes, including the Real Estate Act and the Company Act.
c) The Labour Relations Board oversees the implementation and enforcement of the
Labour Relations Code. It has exclusive jurisdiction to hear and determine an
application under the Code and to make relevant orders. Further the Board's decisions
are not open to judicial review by the courts.
d) Workers Compensation Board is responsible for the administration and management
of the provincial workers compensation system. It compensates all workers injured in
the province and sets health and safety standards, while monitoring the work place to
ensure compliance with those standards.
e) B.C. Utilities Commission holds hearings throughout the year dealing with the
regulation of public utilities under the following legislation: Utilities Commission
Act, Hydro & Power Authority Act, Hydro & Power Authority Privatization Act, Gas
Utility Act, Vancouver Island Natural Gas Pipeline Act. The hearings usually relate to
revenue requirements or the rate design of regulated utilities, although the
Commission also addresses the granting of certificates of public convenience and
necessity, energy projects certificates, the deregulation of the gas industry and
conservation issues.

Example
An example of the results of the deliberations of an investigative committee of
APEGBC is shown on the next page. It was considered decent to obscure the
identities of the individuals. However, if you are really curious you can find this
case (and others) in the archives of the Association’s magazine Innovation at the
website www.apeg.bc.ca.
16


16
The first thing that most APEGBC members do upon receipt of the magazine Innovation is look at who is in
trouble with the Association – “show me the dirt”. Everybody loves trouble as long as it’s not happening to them. It
is interesting that most of the cases have to do with Civil or Geotechnical engineers. This is interpreted by cynics as
indicating that other engineers don’t do anything since they are never in trouble.
APSC 450 Professional Engineering Practice 30
Elements of Engineering Law in Canada

S T I P U L A T E D O R D E R

In the Matter of Xxxxx X Xxx PEng
Whereas:
1. Xxxxx X Xxx PEng understands that the Investigation
Committee of the Association of Professional
Engineers and Geoscientists of BC (the “Association”)
has reasonable and probable grounds to believe and
does believe that he, Xxxxx X Xxx PEng, contravened
the Engineers and Geoscientists Act, RSBC 1996,
Chapter 116 as amended (the “Act”), the Bylaws or
the Code of Ethics of the Association; specifically:
a) That he demonstrated unprofessional conduct by
signing, sealing and submitting Schedules C-B on
J une 4 and J une 19, 2002 to the chief building
official for a single family residence (first project)
when the construction of the structural elements of
the residence was not in accordance with the plans
and supporting documents submitted by Mr Xxx in
support of the building permit.
b) That he demonstrated unprofessional conduct by
signing, sealing and submitting Schedules C-B on
May 28 and J une 19, 2002 to the chief building
official for a single family residence (second
project) when the construction of the structural
elements of the residence was not in accordance
with the plans and supporting documents submitted
by Mr Xxx in support of the building permit.
c) That he demonstrated unprofessional conduct by
signing, sealing and submitting Schedules C-B on
August 29, 2002 to the chief building official for a
single family residence (third project) when the
construction of the structural elements of the
residence was not in accordance with the plans
and supporting documents submitted by Mr Xxx in
support of the building permit.
2. Mr Xxx understands that the Discipline Committee of
the Association, after an Inquiry and a finding that the
allegation set out in the Notice of Inquiry has been
proven, has the power and authority, in accordance
with Section 32 of the Act, to do one or more of
reprimand, impose conditions on membership, or
suspend or revoke membership for each
contravention the Discipline Committee finds Mr Xxx
to have committed.
3. Mr Xxx understands that he has the right at an Inquiry
to make full answer and defence and to be
represented by counsel.
4. Mr Xxx, after seeking and obtaining independent legal
advice, wishes to expedite the resolution of this
matter by means of this Stipulated Order and does
not wish to proceed to an Inquiry.
5. This Stipulated Order will become binding when
accepted by Mr Xxx and the Reviewing Member of
the Discipline Committee.
6. Mr Xxx understands that particulars surrounding this
Stipulated Order will be published in Innovation and a
notice of this Stipulated Order may be otherwise
published or distributed.

Therefore:
In recognition of the foregoing, Mr Xxx and the
Reviewing Member hereby agree as follows:
1. Mr Xxx accepts that he is in breach of the Act as
alleged in the Notice of Inquiry dated April 3, 2003.
2. The Reviewing Member, after a careful review of all
the information provided, has determined that an
appropriate penalty is as follows:
Mr Xxx is hereby reprimanded and the following
conditions will apply to his membership:
a) He must write and pass the Association’s
Professional Practice Examination within six (6)
months of the date of this Stipulated Order.
b) He must practise under the direct supervision
of a Professional Engineer, approved in
advance by the Registrar of the Association, for
a period of six (6) months and in the event that
he does not pass the Professional Practice
Examination within the six (6) month period, he
must continue to practise under the direct
supervision of the approved Professional
Engineer until he does pass the Professional
Practice Examination.
3. Mr Xxx understands and accepts that his acceptance
of the above penalty has the same force and effect as
if the penalty had been ordered by the Discipline
Committee after an Inquiry pursuant to Section 32 of
the Act, and that Section 34 of the Act therefore
applies to the conditions imposed on his membership.
4. Mr Xxx, after carefully considering this matter,
accepts the above penalty.

G S Prince PEng, Reviewing Member
May 28, 2003

Notice — Xxxxxxx X Xxxxxxx PEng
A Discipline Committee Panel (the “Panel”) of the
Association of Professional Engineers and Geoscientists
of BC (the “Association”) heard an application by the
Association on May 27, 2003 pursuant to Section 31(7)
of the Engineers and Geoscientists Act proposing that
the membership of X X Xxxxxx Xxxxxxx PEng in the
Association be suspended immediately.
A Notice of Inquiry had been served on Mr Xxxxxxx
and a hearing before a Panel was scheduled to take
place the following week; however, Mr Xxxxxxx’s
physician was of the opinion that Mr Xxxxxxx was not fit
to attend and participate in the Inquiry Hearing.
After hearing the Association’s application, the
Panel concluded that Mr Xxxxxxx was not fit to practise
professional engineering and ordered that his
membership be suspended immediately. Mr Xxxxxxx’s
membership in the Association is suspended
effecti ve May 28, 2003 at 12 noon.
The suspension will remain in effect until Mr
Xxxxxxx is considered fit to attend and participate in an
Inquiry Hearing and to undertake his professional
responsibilities.
Since Mr Xxxxxxx no longer has the right to practise
as a professional engineer, professional responsibility for
any of his currently active projects must be transferred to
another registered professional.
For further information please contact Harry McBride
PEng, Deputy Director, Professional Ethics at (604) 412-
4852, toll free at 1-888-430-8035 ext 233 or e-mail:
hmcbride@apeg.bc.ca.
APSC 450 Professional Engineering Practice 31
Elements of Engineering Law in Canada

J udicial Review
The decisions of administrative tribunals may be open to review. In some cases that review is
conducted by separate tribunals as created and prescribed by statute, such as the Commercial
Appeals Commission. In other cases the decisions are open to review by the courts as in the case
for the B.C. Utilities Commission. In such cases, the review is made by the B.C. Supreme Court
pursuant to the J udicial Review Procedure Act. There is also an internal review procedure. Much
depends on the drafting of the statute which creates the tribunal and gives it its powers.

EXPERT WITNESSES
Engineers and other professionals are sometimes called to give expert opinion evidence in court
proceedings. Where inferences to be drawn in court relate to technical matters sometimes a party
to the dispute will seek the help of a qualified expert who can express opinions about such
matters.

The expert's opinion may be based on first-hand evidence, on facts or data presented at trial, or
even on data not admissible in evidence, provided it is the type of data reasonably relied upon by
experts in forming opinions on the subject in their particular field of competence.

The decision as to whether or not a person is qualified to testify as an expert witness is made by
the trail judge, who has considerable latitude in this respect. The usual bases for qualification
include educational background, work experience, professional registration, membership and
activity in professional societies, research, writings, etc. The question is whether the professional
has met the standard of ordinary and reasonable skill and expertise in his or her field.

Fees
It is suggested that one determine from the outset whether the lawyer or the client will be
responsible for the expert's fees.

An expert's work can have several phases, and therefore careful record keeping is strongly
suggested. The phases may include: (1) investigation and gathering of evidence and reference
materials, (2) analysis, (3) conclusion and opinion, (4) reporting, and (5) testifying in court.

Ethical Considerations
Although often an expert will be engaged by a lawyer because the lawyer expects the opinion to
support his or her client's position, the engineer or expert should try to remain neutral and seek to
discover the truth sought from the facts and data as complete and unvarnished as possible.

Harper Grey Easton Law www.hgelaw.com/environmental/

Harper Grey Easton 1
Consultant Liability: Are Environmental Consultants Really
“Exempt” from Liability when Working on Contaminated Sites?

By Richard E. Bereti and Jonathan Corbett of Harper Grey Easton

Introduction

Environmental consultants are front-line players in the clean-up of contaminated sites in British
Columbia. Consulting firms and their individual consultants are hired to carry out investigations
and remediation for the benefit of landowners, on-site operators, and governments, as well as for
the community and the environment. As a result of this key role in the fight against
environmental degradation, the provincial government has extended protections to consultants in
order to reduce their potential liability for clean-up activities on contaminated sites.

Unfortunately, the so-called consultant “exemption” - which is contained in the Environmental
Management Act (EMA) - is not an absolute exemption from liability. The exemption is
qualified and, when coupled with a decision of the Environmental Appeal Board, places
environmental consulting firms and their individual partners, directors, officers, and employees
at risk of facing liability far in excess of that which a negligent professional might normally face.
The problem with the exemption is that it does not apply if the consultant is negligent in carrying
out a clean-up. Consultants could thus face liability as “operators” under the EMA, and find
themselves exposed to the same potential liability as the actual polluter of the site.

The Language of the Consultant Exemption

Responsibility for the clean-up of a contaminated site lies with what the EMA terms “responsible
persons.” Current and previous owners and operators of a contaminated site are responsible
persons, unless they can avail themselves of an exemption. The consultant exemption, found at
section 46 (1)(h) of the EMA, is designed to exempt an environmental consultant from
responsible person status. The section states that among those not responsible are:

(persons) who provide assistance respecting remediation work at a contaminated
site, unless the assistance or advice was carried out in a negligent fashion;
[emphasis added]

The consultant exemption is necessary because, absent the exemption, the activities of
environmental consultants at a contaminated site could bring them within the broad-sweeping
definition of “operator” found in section 39(1) of the EMA. That section states that:

“operator” means, subject to subsection (2), a person who is or was in control of
or responsible for any operation located at a contaminated site…

As an “operator,” the consultant would be a “responsible person”, and thus be potentially liable
for the total cost of cleaning up the site. The consultant exemption would never have been
included in the EMA if the legislature did not recognize that activities carried out at a
contaminated site by environmental consultants could very likely bring those consultants within
the definition of operator.
Harper Grey Easton Law www.hgelaw.com/environmental/

Harper Grey Easton
2

Any person seeking to rely on an exemption is required under the EMA to prove every element
of that exemption on the balance of probabilities (section 46 (3)). Therefore, if the Director of
Waste Management (the “Director”) considers an environmental consultant to fall within the
definition of operator and proposes to name that consultant in a remediation order, the onus is on
the consultant to prove (1) that its only role at the site was to provide assistance respecting
remediation work, and that (2) the assistance or advice was not carried out in a negligent fashion.
Establishing the first element of the exemption is relatively straightforward. However, it may be
difficult to establish that one was not negligent in carrying out consulting duties on a
contaminated site. This is particularly so given that there will already be a contamination
problem at the site. Where consultants cannot prove the negative (i.e. that they were not
negligent), they lose the exemption altogether.

Once the “Consultant Exemption” is Lost

In the event that a consultant is negligent while working on a contaminated site, the consultant
faces three primary challenges. First, the consultant may be sued for damages in negligence.
Second, the consultant may be named a “responsible person” by the Director in a remediation
order requiring participation in the clean-up of the site. Such an order may be issued days, years,
or decades after the consultant has completed work at a site. Third, the negligent consultant may
face joint, several, absolute, and retroactive liability for the whole of the site’s contamination,
regardless of his or her role on site, if found to be a responsible person in a cost recovery action
(a lawsuit under the EMA). The allegation would be that the consultant, as a result of his or her
negligence, is an operator on the site and, therefore, a responsible person. Only responsible
persons can be successfully sued under the EMA, which makes the loss of the consultant
exemption due to negligence so serious. Such lawsuits can be complex, lengthy and very costly
to defend, so being named by the Director and/or sued in a cost recovery action can have a
serious impact on consultants regardless of their ultimate portion of liability.

The Good News: Added Protection at Trial

At the point where remediation has been completed and a cost recovery action has made its way
to trial, the EMA and the Contaminated Sites Regulation (CSR) provide added protection to the
environmental consultant, even where that consultant was negligent and is therefore alleged to be
a responsible person. It can be considered an “added” protection because it does not protect a
party from being ordered to participate in the clean-up of a site by the director or the
Environmental Appeal Board. The protection only applies to a cost recovery action under the
EMA. It is found in section 35(2) of the CSR, which reads as follows:

35(2) In an action between 2 or more responsible persons under section 47(5) of
the Act, the following factors must be considered when determining the
reasonably incurred costs of remediation:

(a) the price paid for the property by the person seeking cost recovery;

(b) the relative due diligence of the responsible persons involved in the
action;
Harper Grey Easton Law www.hgelaw.com/environmental/

Harper Grey Easton
3

(c) the amount of contaminating substances and the toxicity
attributable to the persons involved in the action;

(d) the relative degree of involvement, by each of the persons in the
action, in the generation, transportation, treatment, storage or
disposal of the substances that caused the site to become
contaminated;

(e) any remediation measure implemented and paid for by each of the
persons in the action;

(f) other factors relevant to a fair and just allocation.

[emphasis added]

Section 35(2) provides the court in a cost recovery action with leeway as to how it applies the
language of the EMA in determining who ought to pay what proportion of the costs of
remediation. Together, subsections (b) (due diligence), (d) (degree of involvement) and (f)
(other factors relevant to a fair and just allocation of the costs of remediation) are of particular
benefit to consultants. Joint and several liability is thereby tempered by the court’s freedom to
seek a fair and just result, which result may even include the virtual absolution of a relatively
innocent, albeit technically negligent, environmental consultant. The consultant who
significantly exacerbates the contamination on the site will naturally shoulder greater liability.

Again, given the cost of getting to and completing a trial, this “extra protection” may be of little
comfort. Consultants would be far better off to avoid being named as responsible persons in the
first place.

Personal Liability of Consulting Firms’ Directors, Officers and Employees

In the decision of Lawson v. Deputy Director of Waste management (“Lawson”) the
Environmental Appeal Board determined that, where a company is found to be responsible for a
contaminated site, its directors, officers, and employees are automatically “responsible persons”
simply by virtue of their position within the polluting company. The Lawson decision means
that any director, officer, or employee of a consulting firm that has lost its exemption due to
negligence can be named in a remediation order and sued in a cost recovery action, just as the
firm they work for and any of the original polluters or owners of the contaminated site may be
sued. While a court may overturn the Lawson decision at some point in the future, it today
represents the view of the Environmental Appeal Board. The legislature has made no effort to
contradict or modify this far-reaching interpretation of the EMA in recent amendments.

According to the Lawson decision, the definition of “person” in the EMA includes corporations,
directors, officers, and employees. Accordingly, such individuals should automatically be
responsible for the wrongs of the company for which they work. Arguably, however, the
definition of “person” is simply meant to make clear that a person, and therefore a “responsible
person,” may include directors, officers, and employees, where such individuals are properly
found to be responsible persons on a fair application of the definitions of owner, operator, etc.
Harper Grey Easton Law www.hgelaw.com/environmental/

Harper Grey Easton
4

The Lawson decision has potentially far-reaching impact on any individual involved with a
corporate entity found to be a responsible person. An employee, for example, with absolutely no
knowledge or control of his or her company’s operations, could, under Lawson, be just as
susceptible to being named a “responsible person” as the polluting company, and then ordered to
fund the clean-up. Where the company itself is without assets, all directors, officers and
employees would have reason to worry.

Again, there is added protection for individuals named in a cost recovery action under the EMA.
Section 35(4) of the CSR provides directors, officers, and employees with the following
protection:

35(4) In an action under section 47(5) of the Act against a director, officer,
employee or agent of a person or government body, the plaintiff must
prove that the director, officer, employee or agent authorized, permitted or
acquiesced in the activity which gave rise to the cost of remediation.

[Emphasis added]

As a result of this provision, the innocent director, officer, or employee, who the plaintiff cannot
prove has authorized, permitted or acquiesced in the contaminating activity, will be relieved
from liability under the EMA. Claims in negligence, however, would not be affected. Moreover,
for many directors and officers (as well as employees and agents), mere “acquiescence” may not
prove particularly difficult for a Plaintiff to establish; it certainly doesn’t set the bar very high.

Errors and Omissions Insurance Coverage May Only Go So Far

Errors and omissions insurance is designed to cover negligence. It may, in many cases, not be
designed to cover the liability of environmental consultants as “responsible persons” even where
responsible person status is achieved through negligent conduct on the part of the consultant.
Such insurance is often “claims made”, which means a policy may or may not respond to a claim
arising many years after the consultant’s activities on site have concluded. Therefore, each
consultant and consulting firm should examine their relevant policies and seek professional
advice as to the type of coverage that would be extended to them as “responsible persons.”

Directors and officers of consulting firms should consider the same issues in order to ensure that
the desired coverage is in place.


Conclusion

Environmental consultants are familiar with the prospect of being sued for negligence in carrying
out their professional responsibilities; it goes with the territory. However, in the context of
contaminated sites, the application of the EMA means that a consultant, when negligent, faces
more than simply a potential claim in negligence for damages directly attributable to the conduct
of that consultant. Rather, negligent consultants lose their “immunity” under the EMA, and are
exposed to the potential liability of the full cost of cleaning up a contaminated site. As a result,
Harper Grey Easton Law www.hgelaw.com/environmental/

Harper Grey Easton
5
in addition to facing a claim for damages in negligence, the consultant faces all the potential
liability of an “operator” and, therefore, a “responsible person.” under the EMA.

Negligent consultants who become responsible persons carry a far greater burden than they
would if their liability was limited to that of a traditional negligent professional. As responsible
persons, they may be ordered by the Director to clean up all or a portion of a contaminated site or
contribute money toward the clean-up carried out by someone else. Consultants as responsible
persons also face joint, several, absolute and retroactive liability, which is critical when all or
some of the real polluters are without assets. At the very least, consultants could be swept along
in complex and costly litigation.

In addition to consulting firms, individual directors, officers, employees and agents may also be
named as responsible persons. Such individuals can then be ordered to clean up a contaminated
site. This same broad group of individuals may also face cost recovery lawsuits. If the Plaintiff
is successful, then joint, several, retroactive and absolute liability lurk in the background until a
“just” allocation of the costs of remediation is arrived at by the courts. Such costs increase for
each responsible person as other responsible persons either disappear or demonstrate they have
no assets with which to pay for the remediation. In this way, remediation costs allocated to the
negligent environmental consultant or consulting firm could exceed significantly the damages
that would be sought against them solely under a claim of negligence.

Errors and omissions insurance is designed to cover losses due to the insured consultant’s
negligence, and any suggestion that errors and omissions insurance will, in all cases, extend to
cover damages resulting from a consultant’s status as a “responsible person” under the EMA is
optimistic. Coverage will depend on the specific language of the insurance policy and the origin
of any judgment against the consultant, i.e., damages in negligence versus damages resulting due
to a consultant’s status as a “responsible person.” This question should be resolved by each
environmental consultant by examining the relevant insurance policy, reviewing it with the
insurer, and seeking professional advice where doubt remains.


OYEN WIGGS GREEN & MUTALA L L P
I N T E L L E C T U A L P R O P E R T Y L A W Y E R S
__________________________________________
Registered Patent & Trademark Agents
480—The Station, 601 West Cordova Street
Vancouver, British Columbia, Canada V6B 1G1
Tel: 604.669.3432
Fax: 604.681.4081
www.patentable.com
mail@patentable.com
Gerald O. S. Oyen*
Bruce M. Green *
David J. McGruder *
Gavin N. Manning *
Hilton W. C. Sue
Richard A. Johnson
Grace S. Law
David H. Takagawa
Blake R. Wiggs
Catherine D. Mutala
Thomas W. Bailey
George F. Kondor
Craig A. Ash
Todd A. Rattray
Mark A. Hopkinson
*
*
*
* Law Corporation
UBC APSC 450 Page 1 ©BlakeR. Wiggs, 1989, 1994, 1997, 2002, 2004, 2005
Engineering Law: Patents, Trade Secrets,
Copyright, Industrial Designs and Trademarks
Patents
A patent is a monopoly granted by the Federal government, giving the patent owner the exclu-
sive right to make, use or sell an “invention.” Most novel, useful and unobvious products,
processes, machines, etc. qualify as inventions. But public use, sale or other non-confidential
disclosure of an invention may destroy one’s ability to patent that invention. In Canada, a
patent application must be filed before any disclosure which makes the invention available to the
public anywhere in the world. Disclosures by or derived from the inventor do not bar the grant
of a Canadian patent unless they occur more than one year before the patent application is filed.
In the United States, a patent application must be filed no later than one year after any public
use or sale of the invention in the USA, or description of the invention in any printed publica-
tion anywhere. In many other countries any public use, sale or other non-confidential disclo-
sure of the invention before the filing of a patent application bars the grant of a valid pat-
ent—unlike Canada and the United States, most countries provide no grace period for disclo-
sures by or deriving from the inventor.
Only the actual inventor or her assignee or other legal representative may obtain a valid patent.
If two or more applications to patent the same invention are co-pending then, in Canada, the
patent is granted to whoever filed the first Canadian patent application. In the United States,
conflicts of this sort are settled by adversarial proceedings in favour of whoever first conceived
the invention and diligently reduced it to practice. In either country, the prevailing party’s
rights must derive from a bona fide inventor. One who applies to patent an invention copied
from someone else is not an inventor and cannot obtain a valid patent. But even a defective
application of that sort can prevent the actual inventor from obtaining a Canadian patent because
patentability is lost if the invention is described in a previously filed application.
A patent’s term varies by country. In Canada, patents are granted for a 20-year term, counting
from the date the patent application is filed in the Canadian Intellectual Property Office (CIPO).
United States patents also issue for a 20-year term. Once a patent expires the invention is in the
public domain and may be freely exploited. Most countries, including Canada and the United
States, charge “maintenance fees” which must be periodically paid to keep the patent in force
throughout its term.
Before a patent application is prepared, a search is usually conducted to assess the invention’s
novelty and obviousness (i.e., its potential patentability). Any previous patent or publication
anywhere in the world which discloses the invention usually prevents the grant of a valid patent
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for the invention. Since worldwide searches are prohibitively expensive, an investigation of
limited scope is made, typically utilizing Internet databases of patent documents published over
the past few decades by major Patent Offices. See for example:
Canada: http://patents1.ic.gc.ca/intro-e.html
USA: http://www.uspto.gov/patft/index.html
If feasible, the search should also cover non-patent literature. No search can guarantee patent-
ability of an invention. But searches generally facilitate reasonable assessment of the prospects
for obtaining commercially worthwhile patent protection, enabling one to decide if the time and
cost of seeking patent protection is justifiable.
If the search results are favourable, a patent application may be prepared. It must describe the
invention (with drawings, where appropriate) in sufficient detail to enable a skilled person to
construct a working embodiment of the best mode of the invention known to the inventor. The
application includes “claims” defining the scope of patent protection requested. If too broadly
worded, the claims may be invalid as encompassing not only the invention, but also things
which are old. If too narrowly worded, the claims may not protect against competitors who
make minor modifications to avoid infringement.
Patent applications must be filed in each country in which patent protection is desired, except
that a single European patent application may be filed to cover most European countries. Most
industrialized countries belong to an international convention which permits foreign patent
application filings to be deferred for up to one year after the first filing. Subsequent applica-
tions which claim priority in relation to the first-filed application are deemed to have been filed
simultaneously with the first application. Canada and many other industrialized nations also
belong to the Patent Cooperation Treaty, which further assists in preserving patent rights in
treaty countries, with reduced complexity and expense.
Most Patent Offices employ technically trained Examiners who scrutinize patent applications for
utility, novelty, inventiveness and compliance with formal requirements—particular attention
being given to the claim language. More often than not, Examiners raise objections that are
usually answered by amendment of the application, argument, or both. Examination can take
considerable time, so patents normally issue two years or more after the application is filed.
Sometimes, Examiners’ objections are fatal to the patent application, but in most countries
various appeal procedures are available.
Although every patent must name one or more individual inventors, the inventors do not
necessarily own the patent rights. The patentee may instead be the inventors’ employer—having
acquired the patent rights pursuant to an employment contract executed by the employee-invent-
ors. Or, the patentee may have acquired the patent rights pursuant to a contract of purchase and
sale executed by the inventor(s). In some cases the patent rights may be transferred to another
party without any contract or other documents having been executed by the inventor(s). For
example, an employer may in some cases be able to obtain a Court order decreeing that it owns
the rights in a patent surreptitiously obtained by an employee for an invention purportedly
pursued “on the employee’s own time and without using any of the employer’s resources,” if
the patented invention comes within the scope of the employee’s employment duties. Owner-
ship disputes can also arise between joint inventors, or between different employers who
embark on a project together but subsequently disagree over the ownership of an invention
jointly made by employees of both employers.
Patents can be licensed on various terms. In a licensing scenario, the patentee retains ownership
of the licensed patents(s) and permits the licensee to make, use and/or sell articles embodying
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the invention. The license agreement may include provisions respecting exclusivity or non-
exclusivity of the licensed rights, whether those rights may be sub-licensed, the geographic
territory in which the licensee may operate, performance targets the licensee must
meet—including sanctions if the targets are not met, royalty payments—including minimum
royalties, responsibility for pursuing infringers, rights to future improvements made by the
patentee or by the licensee, rights to terminate the license agreement, and much more.
Trade Secrets
Unlike patent protection, no formal governmental recognition is required to obtain trade secret
protection. Trade secret protection is the antithesis of patent protection: full public disclosure
of an invention is essential to the grant of a valid patent (the patent application, incorporating
full details of the invention, is typically published by the Patent Office about 18 months after the
earliest filing), but trade secret protection endures only while the “secret” is kept. Thus, trade
secret protection is inappropriate if routine examination of a device, process etc. will reveal the
secret. If a trade secret owner inadvertently allows the secret to slip out, trade secret protection
is lost. Essentially, the law enables a trade secret owner to prevent others from unfairly
exploiting the secret if they obtain it through fraud, theft, breach of an obligation of confidence,
etc.
Copyright
“Copyright” means the exclusive right to reproduce an original literary, dramatic, musical or
artistic work and includes the exclusive right to produce, reproduce, perform, publish, translate,
convert, adapt, publicly present, record or broadcast the work or any substantial part of it.
Copyright applies to original literary, dramatic, musical and artistic works, whatever their mode
or form of expression. To be “original”, the work must be the product of the author’s skill and
labour—not copied from another’s work. The work need not be the product of genius or exhibit
a high degree of creative skill; the author’s labour is also significant. Telephone directories,
maps or engineering drawings as well as books, plays, songs, paintings or computer programs
are all proper subject matter for copyright.
Copyright does not extend to the idea underlying the work but only protects a particular
expression of that idea. Thus, anyone may implement someone else’s ideas as expressed in an
engineering feasibility study concerning soil stabilization in earthquake-prone areas without
infringing copyright, so long as the written language in which the previous idea was expressed
is not substantially copied.
In Canada, copyright arises automatically for works capable of protection, provided the author
was a Canadian citizen or citizen of a qualifying foreign country when the work was created;
and, if the work has been published, first publication took place in Canada or in a qualifying
foreign country. Most industrialized countries “qualify.”
Subject to certain exceptions, the author of a work is generally the first owner of the copyright.
If the author makes the work in the course of employment, the author’s employer usually owns
the copyright.
Because copyright arises automatically in Canada, no special steps need be taken to secure
Canadian copyright protection. However, copyright registration is desirable if a dispute appears
likely, or if formal evidence of title is desired or required.
OYEN WIGGS GREEN & MUTALA LLP
UBC APSC 450 Page 4 ©BlakeR. Wiggs, 1989, 1994, 1997, 2002, 2004, 2005
You have probably seen the Universal Copyright Convention notice which appears on copies of
published works, such as a book’s title page. For example: “© 1995, John Smith” where 1995
is the year of first publication of the work and “John Smith” is the copyright owner (as
explained above, the owner is not necessarily the author of the work). This notice has little
legal significance in Canada—it does not indicate that the copyright is registered, but it can
serve to notify the reader of the existence of copyright which can be important to preserve the
ability to recover damages in a copyright infringement lawsuit.
Industrial Designs
An industrial design registration is a Federal grant protecting the unique ornamental, visual or
aesthetic features of an article. To be valid, Canadian registration must be applied for within
one year of first publication, public use or sale, anywhere in the world, of the design or of
articles displaying, bearing or embodying the design. Purely functional or utilitarian features
are not registrable as industrial designs but may, if novel, useful and unobvious be patented.
Ideas cannot be protected by industrial design registration.
The initial term of Canadian industrial design protection is five years, which may be renewed
for one 5-year renewal term.
Only the “proprietor” of an industrial design may register it. The proprietor is the design’s
author, unless another party paid the author to create the design, in which case the other party is
the proprietor.
To register a design one files an industrial design application in the CIPO’s Copyright &
Industrial Design Branch. The application is scrutinized by a government employed Examiner
as to form and content, degree of originality and conflict with previously registered or co-
pending designs. It is frequently necessary to respond to one or more Examiner’s Reports
before the application is allowed. As in the case of patents, separate registrations must be
obtained in each country in which protection is desired. The United States equivalent to a
Canadian industrial design registration is a “design patent.”
Trademarks
A trademark is a word, logo, symbol or design (or some combination thereof) displayed on
commercial goods or their labels or containers, or displayed in the provision or advertisement
of services, to identify the goods or services to purchasers. The trademark generally indicates
that the goods or services come from, or are approved or sponsored by the same source as other
goods or services associated with the same trademark.
In general, a trademark is registrable if it is not (1) primarily merely a name or surname; (2)
clearly descriptive or deceptively misdescriptive of the character or quality of the goods or
services; (3) the name in any language of the goods or services; (4) confusing with a previously
registered trademark; or, (5) a prohibited mark such as the Royal Arms or the symbol of the
Red Cross.
Before applying to register a trademark it is advisable to conduct a search for similar marks that
could preclude registration of the mark of interest. If the search results are favourable, a
trademark application is tailored to suit the applicant’s circumstances, and filed in the CIPO’s
Trademark Branch. The application is scrutinized by an Examiner who may raise objections of
form or substance. For example, the Examiner may object that the goods or services descrip-
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UBC APSC 450 Page 5 ©BlakeR. Wiggs, 1989, 1994, 1997, 2002, 2004, 2005
tion is insufficiently specific, that the mark is descriptive, or a surname, or confusing with a
previously registered trademark, etc. The application may be amended or written arguments
submitted to overcome such objections. After any objections are overcome, the application is
advertised in the Canadian Trademarks Journal. This gives others an opportunity to learn of the
applicant’s intention to register the mark and to oppose registration—if they have valid reasons
for doing so (i.e. prior use of a conflicting trademark).
Although Canadian law recognizes limited rights in unregistered trademarks, it is generally
preferable to register a trademark. A trademark registration gives the registrant the exclusive
right to use the trademark throughout Canada in association with the goods and services
mentioned in the certificate of registration.



APPLIED SCIENCE 450
PROFESSIONAL ENGINEERING PRACTICE


INTRODUCTION TO ETHICAL CONCEPTS





September 2005
APSC 450 – Professional Engineering Practice 1
Introduction to Ethics
Introduction
Society places considerable trust in the professions, including engineering, mainly because
society does not have the time or resources to monitor the way in which the professions offer
their services. However, in order to function in today’s world, society needs these services and so
allows the professions to self-regulate, to control entry into the profession and to monitor the
activities of practicing professionals.

This permission to self-regulate takes the form of a statute which is the legal basis of a
professional body that registers the professionals. For example, the Engineers and Geoscientists
Act in British Columbia is the legal basis for the Association of Professional Engineers and
Geoscientists of British Columbia, the professional engineering body. There are similar statutes
for the Canadian Bar Association which has branches in each province that register lawyers in
that province, the Institute of Chartered Accountants of British Columbia, the College of
Physicians and Surgeons of British Columbia, and other organizations of professionals.

Self-regulation is a privilege and a profession has a responsibility to operate in such a way that it
merits this privilege. The members of the profession therefore need to agree how they will do
this. (The alternative of no such agreement is interesting to contemplate if one has an interest in
chaos and disorder.) Such an agreement is called a code of conduct or code of ethics. It is a set of
rules and guidelines that describe in general terms how the professional will practice the
profession, what is considered important in the practice of the profession (public safety in the
case of engineering), and how members of the profession will interact with the public and other
professionals.

Codes of ethics are typically developed by experienced members of the profession and therefore
are specific to the conduct of members of that profession. They do have a basis in ethical theory
and ideas that have been developed in the 18
th
and 19
th
century and for his reason it is important
to have a basic understanding of these ideas. However, an even more important reason is that a
code of ethics cannot provide guidelines for every situation that may arise in professional
practice; it certainly is not a recipe for what to do. Situations often arise in which it becomes very
difficult to decide the correct thing to do. An understanding of in ethical theory does help in
making better informed decisions because there is a wide body of experience with the application
of such theories to difficult ethical problems. Ethics provides another very real-world perspective
on interaction with the society the professional agreed to serve.

Ethics, Morality, and Professional Ethics
The terms ethics and morality are often used interchangeably but it is useful to distinguish
morality from ethics. Morality is concerned with right and wrong conduct and motives while
ethics is a framework for the study of moral dilemmas and their resolution. Pence (2000, p 19)
defines ethics as the study of the nature of right and wrong, what should be done, and is
concerned with the development of ethical norms that are used to resolve moral dilemmas.
Rachels (2003, pp 14-15) states that “morality is, at the very least, the effort to guide one’s
conduct by reason” and that a moral agent is one who acts based on principles of conduct (e.g.,
ethical norms) that can be shown to be rational and sound.

APSC 450 – Professional Engineering Practice 2
Introduction to Ethics
Professional ethics are ethical standards used to guide the conduct of professionals or
organizations of professionals when confronted with moral dilemmas. However some confusion
can arise because in practice the words ethical or unethical, not the words moral or amoral, are
used to describe the conduct of a professional. The reason for this is that moral or amoral
conduct can be confused with one’s individual morality, something personal and private. It is
therefore necessary to distinguish one’s individual morality from ethics and professional ethics.
First, note that professional ethics is a subset of ethics.

Individual morality may be what you were taught as a child or by your culture or religion and
results in a moral vision that is strongly dependent on that culture or religion. However, if ethical
norms are to provide a rational, universal standard for right and wrong, then they must be
independent of culture and religion. (Pojman, 2002, p 2; Rachels, 2003, chap 2) Despite this,
ethics can be used to assess and study individual morality, that is, individual morality can also be
considered a subset of ethics.

If individual morality and professional ethics are each subsets of ethics, does professional ethics
have anything to do with individual morality? The Venn diagram shown below together with
some examples may help to understand the distinctions. As shown, the subject of ethics contains
ethical norms, individual morality, and professional ethics. Culture, religion and upbringing
influence individual morality, but does not influence ethical norms. Ethical norms may be
brought to bear on both professional ethics and individual morality; that is the rightness or
wrongness of the actions of professionals or individuals may be assessed by one or more ethical
norms.

However, there is no relationship between professional ethics and individual morality. Most
professions establish a code of conduct or ethics which is the ethical ideals or standards the
profession. It is expected that professionals will abide by this code when practicing their
profession. This distinction and separation between professional ethics and individual morality is
important since it can be used to illustrate the situations in which professional ethics applies and
where it does not or cannot.

APSC 450 – Professional Engineering Practice 3
Introduction to Ethics

ETHICS
Ethical norms

Professional
Ethics

Individual
morality
possible
interaction
Culture,
religion,
upbringing

Despite the separation between professional ethics and individual morality, there can be an
interaction between the two. For example, suppose your individual morality makes you
uncomfortable with working on matters related to national defence or with the development of
processes involving genetic engineering. A professional code of ethics cannot help you
determine the best course of action in such a situation. But if you do decide to do the work, you
must do it according to the standards set by the code of ethics; you cannot make up your own set
of rules of conduct in order to “cherry pick” the particular activities in the work that do not
conflict with your individual morality and sidestep the others. That would be unprofessional.
1

A more difficult example is whether you should tell your boss that your work colleague (and
close friend) has embezzled money from the company. This might be easy (or easier) for a
lawyer who is legally and ethically bound to ensure that the law is upheld. However, for most
people, the situation is this: embezzlement is in conflict with individual morality but there is this
nagging issue of what effect disclosure of the crime could have on your friend.

Most professional codes have wording which requires the professional to be a faithful agent of
his/her employer. A faithful agent would tell his or her employer of something like
embezzlement which might adversely affect the business, and thus one might think that the code
does in fact provide clear guidance. However, as mentioned above, the intent of the code is to
require the professional to be faithful while engaged in the practice of the profession. This is

1
The codes of ethics of the engineering profession hold public safety paramount. You might think that defence
related work does not hold public safety paramount because it’s all about jeopardizing the safety of the military
public of the other side and so the code does in fact help the engineer decide. But there is a problem – the codes do
not specify exactly what “public” means; that is left up to the engineer to decide.
APSC 450 – Professional Engineering Practice 4
Introduction to Ethics
perhaps a subtle distinction because it involves defining when one is practicing and when one is
not. However, the issues are whether the practice of the profession involves embezzlement
(presumably not) and whether it requires reporting the perpetrator.

There is no intent in this course to interfere with your individual morality. The ethics component
of this course contains a little bit about ethical theories, a few basic ideas about the engineering
codes of ethics, and quite a lot about the use of these ethical theories and codes to make
decisions in a professional context, not a personal context. Sometimes the professional decisions
will be difficult and cause conflict with your individual morality. The course mentions the
possibility of such conflicts and gives examples, but it does not address such conflicts.

Consistency in Ethical Actions
Consistency in ethical actions or judgements would seem to be a good idea for any individual or
group. In fact, for professionals, the reputation of the profession depends on consistency. When a
profession promulgates its code of ethics, it is implicit (sometimes explicit) that the items in code
apply to all professionals and that one can expect the same treatment from each member of the
profession. But, as will be seen, consistency is not everything and more is needed to guide
ethical conduct. Two principles will be used to illustrate this.

The Golden Rule
A rule that most people know and probably learned in childhood – the Golden Rule – is a useful
illustration of consistency. This rule is actually common in a number of cultures and religions:

• Christianity: “Do to others as you would have them do to you”. (New Testament of the Bible,
Matthew 7:12, Luke 6:31)
• Buddhism: "...a state that is not pleasing or delightful to me, how could I inflict that upon
another?" (Samyutta NIkaya v. 353)
• Islam: "None of you [truly] believes until he wishes for his brother what he wishes for
himself." (Number 13 of Imam "Al-Nawawi's Forty Hadiths”)
• J udaism: "What is hateful to you, do not to your fellow man. This is the law: all the rest is
commentary." (Talmud, Shabbat 31a)
• Yoruba: (Nigeria): "One going to take a pointed stick to pinch a baby bird should first try it
on himself to feel how it hurts."

The rule essentially says this: “Treat others as you would want to be treated.” It might seem that
this rule could form the basis for a guide to behaviour in one’s personal and professional life.
However, as a guide to ethical conduct, the rule is radically incomplete; further guidance is
required.

It is sometimes useful to posit an extreme situation to illustrate a point. This will be done now.
Suppose you are an autocratic manager that bullies employees and actually enjoys it when the
employees respond in kind. (Don’t worry, it’s ok if you are and plenty of help is available.) If
you followed the Golden Rule, you would see no wrong in continuing this practice. This
possibility suggests that the Golden Rule does not reliably tell you what you should do; an
APSC 450 – Professional Engineering Practice 5
Introduction to Ethics
ethical norm or standard is required to guide your actions and behaviour. The Golden Rule is a
consistency principle. An ethical norm must be used to guide action or judgement.

Principle of Universalizability
It would seem reasonable to require that ethical actions or judgements should apply to everyone
who is in a relevantly similar situation. If an act A is right for a person P, then it is right for any
person relevantly similar to P. For example, you may believe in a duty to give significant
amounts of money to the poor, but it is reasonable for you to believe that not everyone has a
similar duty because others are not as wealthy as you. The key is to compare “apples with
apples”, to compare relevantly similar situations. Thus universalizability is an incomplete guide
to ethical actions or judgements; it is another consistency principle. Again, an ethical norm must
be used to guide action or judgement.

Why should I be ethical?
By now you may have realized that ethical behaviour is related to interactions between people
and, more specifically, that ethical behaviour requires consideration of others, perhaps sacrificing
your own self-interest in some cases. But why should anyone make such a sacrifice? A
professional might also wonder what advantage there is to following a code of ethics because
there may be significant personal and economic advantages to not following the code.

There is a branch of mathematics called game theory which is used to analyze an interaction
between people or groups of people when the outcomes depend not only on what each “player”
involved in the interaction actually does, but on the strategies of each player. If a model for
ethical behaviour can be captured in a game, then it might be used to gain some insight to the
question posed in the title of this section.

Cooperation and non-cooperation (defection) are two strategies available to any one person or
group of persons. If cooperation is where everyone behaves ethically in consideration of others,
and defection is where they do not, each one acting in their own self-interest, then the question
may be re-posed as: Why cooperate with others? A very simple two-person game can be used to
show the effects of cooperation and defection.

The Lunch Bag Game
Consider Dick and J ane, two busy office employees who meet at noon each working day to
exchange lunch bags, have a brief conversation, and then return to their offices to eat the lunch.
The idea is to eat something different each day and have some variety in their lives. (They do
need to get out more.) Each day they have two choices:

Cooperation: where each puts a delicious lunch into the bag, possibly a different lunch
every day

Defection: where each puts something else in the bag or possibly the same lunch every
day

APSC 450 – Professional Engineering Practice 6
Introduction to Ethics
Although Dick and J ane might talk to each other after office hours, they don’t live together and
neither player has any idea what the other will do on any day. The dilemma is: It is in the self-
interest of each person to defect, to not make the effort to make a lunch and to put something
bogus in the bag or to put the same thing in the bag every day. However, this leaves the other
player with a bad feeling and threatens the future of the arrangement. Both would be better off by
cooperating. The payoff matrix for this game shows this:

Jane
cooperates defects
cooperates (yum, yum) (yuck + , yum)
Dick
defects (yum, yuck + ) (yuck + , yuck + )

where for the matrix item (x,y), x denotes the outcome for Dick and y denotes the outcome for
J ane. If they both cooperated and made good lunches, they would obtain the result shown in the
shaded cell of the payoff matrix. But, given their busy lives, it is in the self-interest of both to
defect. This is the remarkable result of this game (and similar games):

Individually self-interested action results in both players being worse off than if they cooperated.

It is not suggested that moral or ethical behaviour is analogous to making bag lunches, but this
simple example does show how such behaviour, and not self-interested behaviour, could be
considered rational. Felkins (1996) discusses this in more detail. The conflict between the
interests of a group and an individual within that group is a key aspect of many social dilemmas
(Dawes and Messick, 2000) This conflict is a general idea that has found applications in a wide
variety of areas such as economics, biology, political science, resource extraction and use,
agreements between manufacturers of a product or products, military and political strategy,
Internet congestion (Huberman and Lukose, 1997), contract negotiations, road congestion, and
even the vexing problem of finding a date. (See the movie A Beautiful Mind). Further discussion
of these applications can be found at www.gametheory.net.

As described, the above applies to one interaction, one noon hour exchange. What happens
during several exchanges? This has been the subject of numerous experiments and computer
simulations because, except for recluses, human interactions are not “one-shot” affairs but an
almost continuous occurrence.
2
In the case of human evolution one question is: What is the best
strategy that would allow something like cooperation to evolve when individuals are acting in
their own self-interest to survive? Computer simulations involving several million interactions
with different types of players using different strategies, such as might occur during eons of
evolution, showed that the best strategy was something called “tit-for-tat”, in which one player
starts off by cooperating and defects only in response to another player’s defection. (Axelrod and
Hamilton, 1981) A tit-for-tat player is never responsible for initiating a round of mutual
defections. To see what happens over a smaller number of interactions with different types of
players, try the applet at the following site: www.gametheory.net/applets/prisoners.html.


2
Actually a recluse would have to interact with someone or something in order to survive.
APSC 450 – Professional Engineering Practice 7
Introduction to Ethics
Ethical behaviour in a profession such as engineering would be very inhomogeneous if it
depended on what game strategy was being used by each professional during interactions with
clients and other professionals. The profession itself could suffer and fall into disrepute, which
would be a significant loss to each member of the profession. This is why cooperation, in the
form of agreeing to follow a code of ethics, is the best long run strategy for each member of the
profession.

The Prisoner’s Dilemma
The lunch bag game is a variation of a game called the Prisoner’s Dilemma (PD). Suppose you and a
friend have been arrested by the police who suspect, but cannot prove, that both of you have been up
to no good. They separate you and offer each of you the following deal: Confess and incriminate your
friend and, if she does not confess, you will go free and she will get a 10 year sentence. If you both
confess, you will each get reduced sentences of two years. The payoff matrix for this game is

Your friend
keeps silent confesses
keep silent (0, 0) (10, 0)
You
confess (0, 10) (2, 2)

What to you do? You certainly don’t want 10 years behind bars. Zero years behind bars look really
good, but what will your friend do? Neither of you talked about what to do in this situation. So the best
thing for you to do is confess. The worst that can happen is two years in prison. The problem is your
friend has been offered the same deal and is likely thinking the same way, so she confesses and both of
you get two years in prison. Once again, the dilemma: Individually self-interested action leads to worse
results for both than if they had come to some agreement (cooperated) beforehand.

The lunch bag game is a “positive” variation of the PD in that cooperation results in something good
(lunch), not something bad such as two “perps” receiving low prison sentences.

The underlying concepts of the PD were developed around 1950 by two game theorists, Merrill Flood
and Melvin Dresher, who were working for the Rand Corporation (www.rand.org) on strategic
interactions in nuclear warfare. Flood and Dresher had been doing experiments to test how people
might behave in such interactions. They showed their results to Albert Tucker, a Canadian-born
mathematician, who devised the tale of the two prisoners to illustrate the dilemmas of strategic
interactions to an audience of psychologists at Stanford University.

APSC 450 – Professional Engineering Practice 8
Introduction to Ethics
Ethical Norms
Norms to guide ethical behaviour are derived from the ethical theories that will be discussed
below. Most of these theories were developed in the 18
th
and 19
th
centuries during a period of
extensive social change, but some have origins in ancient Greek philosophy. Despite their age,
these theories are relevant today and some have been modified to suit changes in society and to
come to terms with human nature. They are the subject of much debate. Very readable
discussions of ethical theories can be found in Pojman (2002) and Rachels (2003).

For professionals engaged in the practice of their profession, codes of ethics provide a guide to
behaviour; they might be considered an ethical norm for a profession. Codes of ethics do have a
basis in ethical theories but, whereas ethical theories are developed for society in general,
professional codes of ethics are much more specific and apply only to the professionals in
question.

Some caveats must be provided. It will be shown, by means of some examples, that the ethical
theories to be discussed are incomplete. They diverge from one another in what they prescribe,
and no theory can reasonably be applied to every ethical problem. None of the ethical theories
can simply be invoked as a blueprint for settling vexing moral dilemmas. It might be thought that
the more specific nature of an engineering code of ethics would result in a better guide to ethical
behaviour when practicing the profession. However, even these codes are incomplete and can
lead to some notable difficulties in making ethical decisions.

Ethical theories and ethical codes might be considered models, analogous to the mathematical or
physical models that are used by engineers for design. It is well known that most models used by
engineers do not perfectly match reality but they are useful for understanding a design problem
and they do provide useful results that inform design decisions. Similarly, ethical theories and
codes can be used as a means of understanding ethical dilemmas in life and in professional
practice and to develop more thoughtful and informed ethical decisions.

Types of Ethical Theories
Theories of ethical or moral obligations are generally of two types, namely teleological and
deontological. The word teleological originates from the Greek word telos meaning ‘end’ or
‘goal’. Teleological theories are consequentialist in that they concern themselves exclusively
with the outcome or consequences of an action. The most common example of a teleological
theory is the utilitarian theory developed in the mid 19
th
century by J eremy Bentham and J ohn
Stuart Mill. Utilitarian ethics holds that the correct moral action is the one that results in the
greatest good for the greatest number.

The word deontological originates from the Greek word deon meaning ‘duty’ or ‘that which is
binding’. Deontological theories maintain that the moral value of an action is not exclusively a
function of its consequences. An extreme version of a deontological theories is the rule-based
ethics developed by Immanuel Kant in the early 19
th
century which holds that consequences have
nothing at all to do with the morality of an action and that there exist rules, derived from rational
thought and having no exceptions, that should guide our actions. As long as consequences, that
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is, the production of good ones and the avoidance of bad ones, are only part of the moral picture,
the theory is considered deontological.
3


A third type of ethical norm is based on virtue. Rather than develop procedures or rules for
determining the right course of action, virtue based ethics asks the question: “What character
traits make one a good person?” Virtue ethics has been proposed as a distinct alternative to
consequentialist and rule-based ethics.

Teleological and deontological ethical theories are based on concepts which are often in
opposition: a teleological theory is based only on consequences of an act while a deontological
theory is based on rules which may be exemplified by a particular act. These theories are
significant to professional ethics because humans (including professionals) tend, depending on
the situation, to behave or act according to one or the other of these concepts and it is this which
makes ethical decision-making so varied and interesting.

In the following, four ethical theories will be discussed. Consequentialist theories are
exemplified by ethical egoism and utilitarianism. Non-consequentialist theories are exemplified
by the rule-based ethics of Immanuel Kant and the virtue ethics alternative. The purpose of this
is not to offer the reader a “smorgasbord” of choices which may be used to guide ethical
decision-making; rather it is to demonstrate the difficulty of devising an ethical theory that is
complete, universal, and free of moral conflicts.

Ethical Egoism (It’s all about me, of course!)
Most teleological norms consider consequences that are of benefit to a large number of members
of society. Not ethical egoism. Ethical egoism is concerned only with consequences to oneself, to
the exclusion of any other consequences. The ethical norm is:

Each person ought to pursue his or her own self-interest exclusively.

This is a radical idea. It says there is only one duty – to promote one’s own interests to the
exclusion of the interests of others. The idea has a reasonably distinguished background. Some
economists look to the words of Adam Smith (The Wealth of Nations, 1776) “Individual self-
interest in a competitive marketplace produces a state of optimal goodness” to argue for self-
interested competition in the marketplace causing each person to produce a better product and
gain market share by selling it at a lower price than others. This leads to an efficient and better
marketplace for all. Ayn Rand’s novels, such as Atlas Shrugged and The Fountainhead, are a
literary expression of ethical egoism. In The Virtue of Selfishness (Rand, 1964) she makes the
explicit statement of the egoist’s standpoint: “The achievement of his own happiness is man’s
highest moral purpose.” Selfishness to achieve that happiness is therefore a virtue and altruism is
a vice because it undermines one’s individual worth and could be ultimately suicidal. In Ayn
Rand’s words “If a man accepts the ethics of altruism, his first concern is not how to live his life,
but how to sacrifice it.”


3
The words teleological and deontological are hard to read and certainly hard to pronounce. Alternatives are
consequentialist and non-consequentialist or consequentialist and rule-based. These alternatives may be used
interchangeably in the following.
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The underlying assumption is that if everyone acts in their own self-interest, it is more likely that
everyone would be better off and perhaps the world would be a better place. In the words of
Olson (1965):

The individual is most likely to contribute to social betterment by rationally pursuing his
own best long-range interests.

This seems to rely on the following logic: if person n acts in his own self-interest, this will be
good for that person and for person n+1, and by induction for the whole of mankind. But can
ethical egoism be universal? Can you be friends with someone who you agree can also act in
their own self-interest, perhaps against you? This would not be in your self-interest so the
concept seems self-defeating. It would also be self-defeating to publicize the fact that you are an
ethical egoist - how do you expect people to act if they know this? How could an engineer or any
professional serve society if he/she were a professed ethical egoist? It appears to be an
inconsistent concept that cannot apply to everyone – it can’t be universalized.

Certainly there are cases when it is a really good idea to act in one’s self interest. For example, if
someone physically attacks you and threatens your life, it would not be considered immoral to
kill that person in self-defence. But, as seen in the description of the Lunch Bag game, selfish or
self-interested behaviour, which may be considered rational, is not rewarded, particularly in the
long term. So when is it correct to act in one’s own self-interest? Are there any rules?

First it is important to understand that ethical egoism does not say to avoid actions that may help
others. In fact, it may be that one’s interests coincide with those of others and therefore it would
be in one’s self-interest to cooperate with or to help others. For example, each farmer in a group
of farmers would want a monoculture based farm because it increases cash flow. However, it is
beneficial for the group to engage in crop rotation because it reduces the likelihood of making
the land barren, something none of the farmers would want. Thus each farmer makes a sacrifice
for the betterment of the group. Another example is where employees willingly take a pay cut to
keep a company alive through a recession, after which the economy is likely to improve and
everybody will reap the benefit.

Unfortunately no rules can be devised for when to make such sacrifices to benefit a group; trust,
knowledge, and understanding are required. But there is an underlying principle and it might be
called “enlightened self-interest” in which an individual makes decisions, often at individual
expense, that will benefit both the individual the group to which the individual belongs. The
individual is still acting in his/her self-interest.

This may seem simple enough – just think about things and understand when it is best to
sacrifice your self-interest. The argument for individual sacrifice and cooperation is a re-
statement of the saying “short-term pain for long-term gain”. However, suppose the short-term
loss is one's life or something irreplaceable such as a limb. Then there can be no long-term gain,
unless being immortalized or being called a hero is seen as a gain.

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The Utilitarian Idea (If Benefits – Harms > 0, then do it, else don’t do it)
J eremy Bentham was an eighteenth century English philosopher who was interested in
determining a rational basis for law and public policy, in contrast to law and policy based on
tradition. The opening statement of his book An Introduction to the Principles of Morals and
Legislation, published in 1789 is

Nature has placed mankind under the governance of two sovereign masters, pain and
pleasure.

This suggests that all that people feel is pain or pleasure. Thus it seemed reasonable to Bentham
to propose that a rational approach to morality (as well as law and public policy) should be based
on the idea of maximizing pleasure and minimizing pain.

Bentham developed the hedonic calculus as a means for computing a numerical measure of the
pleasure or pain caused by some experience or action. He defined utility as the difference
between pleasure and pain, a net benefit or dis-benefit depending on the sign of the result. The
underlying concepts of such a formulation are very similar to present day cost-benefit analyses.
Suppose for any action a set of benefits and a set of harms could be determined. The
benefits might be money, lives saved, or some numerical measure of happiness. The harms might
be loss of money, life, scratches on your car, or some numerical measure of discontent. Of course
to do any comparisons, the units of the benefits and harms would have to be the same. This leads
to an issue of measurement that will be discussed below.
i
B
i
H

Given and for an action and weights or importances of a benefit or harm, , one could
compute the weighted utility of an action
i
B
i
H
i
W

∑ ∑
− =
i
i i i
i
i W
W H W B U

Usually the occurrence of benefits and harms is uncertain but a probability may be assigned to
them. One could then compute the expected utility
i
P

( )
∑ ∑
− =
i
i i i
i
i
P H P B U E

This may seem like a simple enough idea. How can one argue with the idea that actions should
promote happiness? However, in its time, utilitarianism was a radical notion because of what it
omitted to consider. Gone was any reference to God, to codes of conduct rooted in religious
teachings, or to a set of inflexible rules based on tradition. All that was required of one’s actions
was that their consequences bring about as much happiness or utility as possible – nothing more
– other considerations with respect to the actions are meaningless. This is the foundation of
utilitarian thinking. If it could be determined that some consideration other than consequences is
important, then the entire idea of utilitarianism would be undermined.

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There are two versions of utilitarianism, act utilitarianism and rule utilitarianism. Act
utilitarianism, sometimes known as unrestricted utilitarianism, maintains that the right ethical act
is always the one that produces the greatest amount of utility:

Act-utilitarianism: An act is right if and only if it results in as much utility as any
available alternative

Rule utilitarianism, or restricted utilitarianism, uses the utility principle to derive a set of rules
that would bring about the greatest amount of utility:

Rule utilitarianism: An action is right if and only if it conforms to a moral rule whose net
benefit is greater than any alternative rule.

Rule utilitarianism is restricted in the sense that the application of the utility principle is
confined to the justification of rules, not particular acts.

The main strength of the principle of utility is that it provides an impartial basis for deciding
between competing interests. Because of this impartiality, the concept has been extended and
applied to all kinds of decision-making and policy-making problems found in modern society.
However, there are numerous criticisms and problems associated with its application.

The Bad News about Utilitarianism
There are at least three practical problems with the application of act utilitarianism:

• Time constraint. In some cases, utility calculations can be done quickly and intuitively such
as in deciding to take the bus instead of a car which, presumably, would increase utility and
happiness by decreasing the NO
x
and SO
x
burden in the air and decreasing one’s stress level.
But how do you do utility calculations when you have to decide which way to steer your
skidding car if the choice is to run it into a fully populated bus stop or onto a busy sidewalk?
• Predicting future consequences. The utility principle requires that actions be judged by
calculating the consequences that could result form the actions. However, this often requires
predicting the future, a difficult task, at best. The difficulty is magnified by the uncertainties
associated with actions that could result in complex, evolving, and highly contingent
outcomes.
• Scope. How many outcomes and how many people should be considered? With respect to the
number of people, J ohn Stuart Mill, a leading 19
th
century follower of Bentham’s utilitarian
ideas, put it this way “we must be as strictly impartial as a disinterested and benevolent
spectator”. In other words, each person’s welfare is equally important. If we speak of
weighted utility, as defined above, then the weights associated with the benefits and harms to
each person must be the same. However, the complex interconnections in today’s world
render it impossible to guarantee that each person’s welfare is treated equally in all cases.

The main criticism of utilitarian theory is that it is exceedingly difficult and sometimes
impossible to quantify benefits or harms. For instance, it is impossible to measure the benefit of a
person’s life. At the least, longevity, level of productivity, capacity for enjoyment, degree of
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happiness, and future prospects of the person would have to be considered. Is this a complete
list? Is it even possible to measure all these categories?

A related problem is the difficulty of finding a common basis for the benefits and harms of an
action. On the surface this is a problem of units: What units do you use to measure benefits and
harms? However, a more serious issue is whether the benefits and harms can even be compared.
A classic example is spending money, a limited resource, on guardrails on a dangerous stretch of
highway. The money spent on the guardrails is a harm or dis-benefit, but how can a dollar value
be estimated for the benefits which would be the lives saved or injuries prevented. Money spent
and human lives or injuries are said to be incommensurable, they have no common basis for
measurement.

There is a potential conflict of interest if a proponent of an action evaluates the benefits as well
as the harms of an action. How can that person be impartial? Whether we like to believe it or not,
we are all self-serving and it is easy for subtle biases to creep in so that a proponent under-
estimates the harms and over-estimates the benefits of an action.

Another problem with act utilitarianism is that it requires that each individual action be subjected
to the principle of utility. This can lead to considerable inconsistency in one’s actions. If, for
example, one is considering telling a lie on one occasion, it is the consequences of that act of
lying that are to be evaluated leading to a decision whether to lie. On another occasion, the
consequences may result in different benefits and harms leading to a different decision about
whether to lie. Thus one can do any questionable act as long as its consequences have the
greatest net benefit.

Probably the most significant criticism of utilitarianism is that it in certain circumstances its
application can lead to the sacrifice of justice and individual rights, even the right to life or
liberty, for the greater good. An extreme example is an attempt to justify taking photographs of a
person without his or her knowledge by suggesting that the pleasure of owning the photographs
and looking at them is greater than the harm caused to the person, who does not know anyway.
But, clearly the right to privacy of the person in the photographs has been violated.

Rule utilitarianism avoids the latter two criticisms by maintaining that the principle of utility
should be invoked only to decide whether moral rules are better than any alternative. Thus a rule
utility analysis would not justify any action that involves breaking a moral rule such as “Don’t
lie” or “Don’t violate someone’s right to privacy” because better alternatives to such rules, ones
that would increase happiness and general welfare, cannot be found.

However, contradictions can result from attempts to apply rule utilitarianism. Suppose that a set
of rules has been established using utility analysis, but that breaking one of those rules on a
particular occasion would increase utility by a considerable amount. Suggesting that the rule may
be broken in this case is really a covert form of act utilitarianism. However, insisting that the rule
may not be broken is a kind of “rule worship” which ignores one of the main tenets of
utilitarianism, namely that it is only consequences that matter. One might as well use a rule-
based ethical norm.

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Jeremy Bentham (1748-1832)
Born into a wealthy family, Jeremy Bentham was educated at Westminster school
and Queen's College, Oxford. He trained as a lawyer and was called to the bar in
1769 but never practiced. His independent wealth permitted him to set himself up
as a writer in London.

Bentham suggested a procedure to estimate the moral status of any action, which
he called the hedonic calculus. It provided a score for any pleasure or pain
experience caused by the action by taking account of seven aspects of the
experience: intensity, duration, certainty, nearness, fruitfulness (the chances of it
being repeated), purity (the chances of it not being repeated), and extent (the number of people
affected). Adding the amounts of pleasure and pain caused by the action and comparing the two sums
would provide a means of deciding whether the action was correct. For an example see
http://www.brainyencyclopedia.com/encyclopedia/f/fe/felicific_calculus.html
Bentham argued that the rightness of almost all actions could be decided by this algorithm. He made
an extremely complex table of pleasures and pains. This table and the hedonic calculus became the
basis of utilitarian ethical theory.

Legislative reform was one of Bentham’s main interests. He applied utilitarian reasoning to suggest
reforms for punishment of criminals saying that the proper aim of punishment is to produce more
utility. If punishment involves pain, it can only be justified if it is outbalanced by the reduction in pain
it causes. Thus, if punishment deters people from doing things which would produce more pain, such as
theft, rape or murder, then the punishment would be justified. If not, punishment would be retribution
for its own sake. The hedonic calculus would enable the calculation of how much punishment is
appropriate; it is the amount whose pain is outweighed by the pains of the actions it deters.

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Kantian Ethical Theory (Let’s talk about the rules)
The classic non-consequentialist ethical theory is that of Immanuel Kant, a German philosopher
of the 18
th
century. Kantian ethics is based on the proposition that one must always act in strict
accordance with a set of universally valid moral rules. The problem was to find ways of
developing such a set of rules and reasons for following those rules without exception.

Why rules? Kant began by asking a basic question: What makes a person morally good? His
answer was that it is one’s intentions that make one morally good. This led naturally to a second
question: What kinds of intentions make a person morally good? The answer was that morally
good intentions are those which one does out of a sense of duty. It is not enough to act to bring
about happiness or greater utility; one must act from a sense of duty to do such a thing.

This is quite different from the ethics resulting from estimating the utility of the consequences of
one’s actions. It requires consideration of what is happening and what should be happening in the
minds of people when they are making ethical decisions. Kant said that what people should be
thinking of is duties and these duties could be inferred from a set of rules derived from rational
thought.

Rules are imperatives and Kant distinguished two types of imperatives. One was a hypothetical
imperative which typically contains conditions represented by the word “ought” or if”, such as:

To have a good relationship with your parents, you ought to obey them.
If you want to excel in engineering practice, you need to know how to communicate.

Such imperatives tell you what to do if you have the relevant desires. However, they provide a
way out – all you have to do is renounce the desire. J ust stop wanting to have a good relationship
with your parents and take what comes when you come home late smelling like a brewery, or
just say that you really don’t want to be the kind of engineer that needs to communicate, you will
fare well enough doing some other aspect of engineering.

A moral obligation should not depend on what you want or desire. A moral obligation should be
a categorical imperative, one that says what must be done, such as

Never tell a lie.
Never use another person as a means to an end.

But why should one feel obligated to follow such rules? It would be easy to invoke religious
teachings, but that might require faith and faith is a personal matter. Kant was looking for
something that could apply to everyone. He reasoned that while hypothetical imperatives are
made possible by our desires, categorical imperatives are made possible our ability to reason. A
categorical imperative must therefore be derived from a principle that every rational person can
accept. Those who did not accept the rule would be irrational. Kant called this principle the
Categorical Imperative.

In his book, Foundations of the Metaphysics of Morals, published in 1785, Kant gave several
formulations of the Categorical Imperative. One is:
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Introduction to Ethics

Act only according to that maxim by which you can at the same time will that it should
become a universal law.

This provides is a procedure for deciding whether an act is morally permissible. You first ask
what rule you would be following (what “maxim”) if you were to do the act. Then you ask
whether you would want that rule to be universal, to be followed by everyone at all times. If so,
then the rule may be followed and the act is permissible.

Rules that are not universal are typically self-defeating. One example is the problem of trying to
get someone to lend you money, but knowing that you will likely not be able to repay it. To get
the money, you must promise to repay. What maxim would be followed if you promise to repay
knowing you cannot? Perhaps something like: “When you need a loan, promise to repay it even
when you know you probably cannot.” Can this become a universal law? No, because if
everyone did that, then every lender would no longer believe a potential borrower and no loans
would be made, including loans to you. Thus, the rule is self-defeating.

A criticism of this formulation is that, while it provides a means to determine consistency, it
provides no sense of whether an act itself is right or wrong. For example, while it may be self-
defeating to cheat and to lie, there is no way to decide whether such acts are right or wrong. A
useful ethical theory must provide considerations to help decide. This is what the second
formulation of the Categorical Imperative does:

Act so that you treat humanity, whether in your own person or in that of another, always
as an end and never as a means only.
4

What does it mean to treat someone as an end and not as a means? If morality is derived from
reason, then the rational person is the embodiment of morality. Without rational people capable
of acting autonomously on the basis of reason, morality would disappear. Therefore, all rational
people are to be treated with respect and dignity, as an end-in-themselves, not as a means to
attain some other goal. One cannot lie to a potential lender about one’s ability to repay a loan
because that would be manipulation, using the person as a means to an end.

This second formulation does provide a means to test whether a rule is morally right or wrong by
referring to the manner in which the rule treats other persons. Kant believed that the second
formulation logically followed from the first, but that both were necessary to devise rational
rules. If we used other people are used as a means, then there must be a universal law that allows
this and it would be self-defeating. But more significant is the concept of fairness. The first
formulation of the Categorical Imperative implies that we regard ourselves as rational beings
with the autonomy to act based on universal moral principles. If we claim this view of ourselves,
then we must allow that every other person can do the same. But this is saying that every other
person must be assumed rational and autonomous, just what the second formulation implies if
morality is to prevail. Consistency therefore requires that if one adopts the second formulation of
the Categorical Imperative, one must adopt the first.


4
This is not the Golden Rule in disguise.
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Kant said that consistency requires that there be no exceptions to the rules. This got him into
some trouble. The Case of the Inquiring Murderer was devised by a Swiss contemporary of Kant
named Benjamin Constant who said that if telling the truth was a rule to be obeyed without
exceptions then one must tell a known murderer the location of a potential victim. Kant provided
a response to this in his essay On a Supposed Right to Tell Lies from Benevolent Motives in
which he argued that it is indeed one's moral duty to be truthful to a murderer because one “must
answer for the consequences, however unforeseeable they were.” The problem with this is that if
one is held morally responsible for any bad consequences of lying, then one must also be morally
responsible for any bad consequences of telling the truth. The argument to be truthful in all cases
is not convincing.

The Case of the Inquiring Murderer is an example of conflicting rules:

Always tell the truth
Do not cause harm to people

The conflict is: What if telling the truth will harm someone? The only way to resolve this is to
hold that one of these rules does not follow the Categorical Imperative or to hold that rule
violation is possible if one accepts that others may do the same at any time, i.e., it is universally
acceptable that others may violate the rule. Partly for this reason, contemporary deontologists
allow that consequences, particularly bad consequences, have moral relevance and should be
avoided, perhaps as a rule.

Immanuel Kant (1724-1804)
Immanuel Kant was born in the East Prussian city of Königsberg (now
Kaliningrad, Russia), studied physics and mathematics at its university, worked
as a tutor and professor at the university for more than forty years, and died in
Königsberg, never having travelled more than 80 kilometres from his home.

Little more than five feet tall, with a deformed right shoulder, concave chest,
Kant had a weak constitution. He never married, and followed an unchanging
program of activities from youth to old age. He would rise at five o'clock, study
for two hours, lecture for two more, and spend the rest of the morning at his
desk. He dined at a restaurant and spent the afternoon in conversation with friends. He then walked
for about an hour – a walk which for years followed exactly the same course. It was said that one could
set one’s timepiece by the time when Kant left his house each day to go for his afternoon stroll. After
the walk, he would study for two hours more and then go to bed between 9 and 10.

Kant was the philosopher of moral autonomy, the view that by the use of reason human beings can
discover and live according to basic principles of knowledge and action without divine support or
intervention. However, Kant's most revolutionary effect on philosophy restricted the areas about which
knowledge was possible. In his book Critique of Pure Reason he examined what knowledge human
beings could acquire simply by thinking about things independently of experience and evidence from
the senses. His conclusion: not very much. This might seem obvious today, especially in the case of the
sciences, but in Kant’s time logic was used to determine the state of the universe. If other equally
logical rationales were used to determine the state of the universe, the result was an unproductive
debate. Kant believed that this style of pursuing knowledge was bankrupt and should be abandoned


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Virtue-based Ethics
Bentham spoke of utility and Kant spoke of intentions. However, there are other ways to think
about good and bad. It is very natural and common to simply judge one’s actions by words such
as courageous or cowardly, honest or deceitful, generous or selfish. These and similar words
form the basis of a different kind of ethics called the ethics of virtue.

Virtue based ethics dates back to the times of the ancient Greek philosophers Aristotle, Plato,
and Socrates. Rather than develop procedures or rules for determining the right course of action,
Aristotle asked the question: What character traits make one a good person? Some virtuous
character traits are
:
Courage, Honesty, Generosity, Kindness, Self-control

But are these virtues the same for everyone? Aristotle recognized that what might be considered
virtuous in ancient Athens, a democratic (sort of) trading and intellectual centre, might not be
considered virtuous in Sparta, a warlike, hierarchical military state located about 100 km to the
southwest of Athens. This suggests that he felt that there was virtue in different belief systems,
but the problem is that it leads to a non-universal set of traits, something called relativism in
which all beliefs and virtues are equally valid.

But should all good people be characterized by the same virtues? An engineer who devotes his or
her life and skills to improving the living conditions of the poor may have some virtues that are
different from those of the design engineer who manages the development of complex product
involving components from different manufacturers. Both are admirable in their own ways and
so it is reasonable and natural that virtues would differ from person to person.

Aristotle countered this view by saying there are some virtues that will be needed by all people at
all times. He proposed a list of such required virtues:

• Courage to face dangers that may arise
• Generosity to even out the distribution of wealth
• Honesty because society cannot exist without honest communication
• Loyalty – everyone needs friends

The problem is that this could be considered an incomplete list by some members of society and
the result could be a very much longer list.

What seems like a practical, but by no means a complete alternative, is to use exemplars as a
guide to the virtues that are required for a particular type of life. Thus Mother Teresa is an
example of the virtue of kindness and generosity. Some examples of who may be called virtuous
engineers are given in the box below.

A criticism with virtue ethics is that, unlike other ethical theories, there are no principles for
determining the goodness or badness of an act. Really the This leads to an inability to resolve
conflicts or undecidability. Consider the following problem:

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Consider two acts A and B
It is dishonest but kind to do A, honest but unkind to do B
Honesty and kindness are both virtues. Which virtue takes precedence?

Simply asking someone to be “virtuous” or to do the “right thing” does not help in such
situations.

Virtuous engineers
Examples of engineers who exhibit what could be called virtuous behavior are given below.

Fred Cuny: 1944-1995
Attended Texas A&M University, studied engineering, but never graduated. He became interested in
disaster relief. A maverick, he always challenged methods of existing aid relief agencies. In 1971 he
founded Intertect, a crisis management firm, which used engineering talent to assist in national
disasters. He gained experience all over the world. In 1995 while working in Bosnia he went missing and
was presumed murdered.
See http://www.pbs.org/wgbh/pages/frontline/shows/cuny/

Ben Linder: 1959-1987
Mechanical engineer, University of Washington 1983. He volunteered with the Nicaraguan Appropriate
Technology Project. In 1984 he became lead engineer of a small-scale hydro development (100 kW) in
mountains of northern Nicaragua. The plant went into operation May 1986 On April 28, 1987, while
working at the construction site for a new dam, Ben, two assistants, and a military escort were
ambushed by contras. One assistant, one soldier, and Ben were killed.
See http://en.wikipedia.org/wiki/Ben_Linder

Ron Yaworsky
Earned a PhD in Civil Engineering from the University of British Columbia in 1994 then did volunteer
work in Western Sudan dealing with village water supply, maintenance of equipment, public health,
and sanitation. Ron works extensively with First Nations on project management, community
development, and training. He is active on the UBC Senate. He founded a scholarship for First Nations
engineering students.




APSC 450 – Professional Engineering Practice 20
Introduction to Ethics
Some Difficult Ethical Dilemmas
Despite years of debate among ethicists about the various ethical norms given above, there are
some situations in which it is extremely difficult or impossible to decide what to do. Some actual
and hypothetical moral dilemmas will be described in order to illustrate these difficulties and the
essential characteristics of an ethical dilemma.

Trolley Problems
Trolley problems are classical ethical dilemmas. The trolley problem was originally formulated
by Philippa Foot (1967) and has been used as a model for decision-making in medical ethics,
specifically for cases involving abortion and organ transplants (Which transplant patient gets
which organs?). There are many variations of the problem (Thomson, 1985; Malm, 1989).
Consider the following two:

Bystander: You are strolling by a railway track and notice that a runaway train is rolling
down the track at high speed toward five people working on the track. The five will have
little chance to escape being run over by the train because the tracks where they are
working are located in a steep-walled valley. Next to you there is a lever that will throw a
switch to divert the train onto a siding on which one homeless man is sleeping. Should
you pull the lever and kill the sleeping man but save the five?

Fat Man: You are standing on a footbridge that crosses over a railway track. A runaway
train is rolling down the track at high speed toward five people working on the track. The
five will have little chance to escape being run over by the train because the tracks where
they are working are located in a steep-walled valley. Next to you there is a large
individual (the fat man) who, if thrown in the path of the runaway train, would either stop
or derail the train. Should you throw this fat man off the bridge?

Bystander requires small personal involvement. The bystander is detached, does not know the
five people or the man sleeping on the siding, does not have to look at the result once the lever is
pulled, and can perhaps take some comfort that the sleeping man will never know what hit him.
Fat Man, on the other hand, involves considerable personal involvement. One would actually
have to approach the large individual and, without any formal greeting, use all one’s strength to
throw him over the bridge railing. In order that the man has no chance to roll off the tracks, you
would have to do this just before the train is about to go under the footbridge so you would
probably see the gory results.

An act-utilitarian would see no difference between these two dilemmas: either one person dies or
five people die so, in each case, simply choose the alternative that creates the greatest good or
the least bad. If there were an accepted rule that maximized utility for society in all situations
including trolley problems (e.g., “never kill” or “always save as many people as possible”), a
rule-utilitarian would act according to that rule. A Kantian would also see no difference between
the two dilemmas: in both cases there is the possibility of using a person as a means to an end
and because this is wrong in a universal sense, a Kantian would do nothing in either case.

APSC 450 – Professional Engineering Practice 21
Introduction to Ethics
But these are attempts to use pure reason to resolve a difficult dilemma. When “people off the
street” are confronted with Bystander, their reaction differs considerably from when they are
confronted with Fat Man. Most are willing to pull the lever but very reluctant to throw someone
off a bridge. Try this at your next dinner party.

Runaway Train in Commerce, California
J ust in case you thought the Bystander trolley dilemma was a “toy problem”, consider what
happened in the town of Commerce, California on J une 20, 2003 at 12:01 pm:

On Friday, J une 20, 2003 in southern California, the Union Pacific Railroad was carrying
out a switching operation with a freight train carrying lumber. Thirty cars of the train
broke loose and rolled 27 miles west towards central Los Angeles at speeds of up to 50
mph before railway officials used a remote system to switch the runaway cars to a siding
in the small city of Commerce. At 12:01 pm 18 of the 30 cars derailed off the siding
damaging or destroying some homes in Commerce and causing minor injuries to13
people. Fortunately no one was killed.
(Source: http://www.cnn.com/2003/US/West/06/21/train.derails/index.html)

This case is very much like Bystander given above except that the consequences are less certain.
A spokesperson for Union Pacific (UP) made the following statements to various reporters:

“UP knew the maneuver was likely to cause a derailment, but it would have been more
dangerous to allow the train to continue moving into central Los Angeles.”

“… they did this [because] the train was headed to the more populated area of Los
Angeles, where there are possibly commuter trains and more population.”

“The railroad had only 30 minutes to respond and made notifications to the best of its
ability.”

It can be inferred from the first two statements that utilitarian reasoning played a major role in
the decision to switch the cars to the siding. This is consistent with the typical response to
Bystander which is to pull the lever. However, uncertainty was significant. Although the
siding was a dead-end, the term “likely” in the first statement implies that there was some
uncertainty with respect to a derailment. Also, it must have been assumed that no one was on
the siding (sleeping?).

Jillian’s Choice
On December 26, 2004 a large earthquake in Indonesia caused a massive tsunami that struck
many beaches all over southeast Asia. An Australian woman, J illian Searle, was vacationing in
Phuket, Thailand with her husband and two young sons, one a baby. While holding on to her
sons, she became caught in the rush of water after the tsunami hit. She found she could not hold
on to both boys and tried to transfer the hand of the older boy, Lachlan, to a stranger. That
manoeuvre did not work but fortunately Lachlan was able to hold onto some floating debris.
Both boys and the parents survived. However, think of the quick decision that had to be made
and the chances that were taken with Lachlan’s life.
APSC 450 – Professional Engineering Practice 22
Introduction to Ethics

The choice involved in this story is similar to that in William Styron's book Sophie's Choice (or
its Hollywood adaptation by the same name) in which a sadistic Nazi in a concentration camp
compels a mother, Sophie, to choose one of her children for immediate execution or else witness
the execution of both. Some applauded while others condemned the mother for selecting one of
her children to die in order that the other might live.

How does one make such decisions? There are no rules and making utilitarian calculations in a
desperate situation seems ridiculous. Who could honestly say they know what he or she would
do in such extraordinary situations?

Can You Explain This?
On March 13, 1964, Winston Moseley stalked a young woman as she walked from her car near a
train station in Queens, New York. He caught up with her near her apartment, wrestled her to the
pavement and then stabbed her in the chest. As she screamed for help, some lights went on and
several windows opened. One neighbour shouted “Let that girl alone!” Moseley retreated, but
later returned and found his victim stumbling up the stairs to her apartment. He stabbed her eight
times and sexually assaulted her. At 3:50 am, thirty minutes after neighbours first heard her cries
of distress, the police received their first call. When they arrived, Kitty Genovese was beyond
help. Some of the neighbours were interviewed by police and 38 of them admitted to having
heard the screams. Any one of them could have called, but did not giving explanations such as “I
was tired”, “I thought it was just two lovers fighting” and “Frankly, we were afraid”.

In the spring of 1982, three CBS technicians saw Margaret Barbera being dragged by a man
through a parking garage in Manhattan. Even though the man had a long-barrelled pistol, the
three men, Leo Kuranski, Robert Schulze, and Edward Benford, rushed to her aid and ultimately
to their death as the man shot each one of them.

Can you explain this difference in behaviour of witnesses to violent crimes? (See Frank, 1988 for
an explanation)

Construction in the Third World
Suppose you are the project manager of a construction project in a Third World country. There is
considerable political instability in the country and groups of insurgents sometimes attack
government institutions and foreign operations working for the government. Your project is a
possible target of these attacks. To avoid being attacked, you pay the army a fee to guard the
facilities. Ostensibly the fees are used to recruit and train guards – the government needs
experienced members of the army for other purposes.

Recruitment and training go well and the guards have established an effective system. However,
one of your engineers tells you a story of seeing several army generals hosting lavish parties and
of one general who was driving an expensive SUV – an item likely outside the financial
capabilities of an army salary. This and other similar stories gradually lead to the suspicion that
much of the money paid to the army is winding up in the pockets of some generals.

APSC 450 – Professional Engineering Practice 23
Introduction to Ethics
Based on this you decide to stop the payments, saying that the recruitment and training process is
finished and all that is needed is housing for the guards which your company can provide. Soon
after that, two teachers at a local school are shot. The initial suspects are insurgents, but as the
school was under guard, the question is: how did they get so close? What should you do?

Summary
Based on the above dilemmas, the following appear to be common characteristics of an ethical
dilemma:

• A choice based on two or more different values or principles is always involved and
gives rise to a discrete or continuous set of alternatives
• There is little structure to the dilemma, at least initially
• Uncertainty often contributes to the lack of structure and usually plays a major role in the
decision made
• Human emotions and foibles are often involved.

This may seem strange and unfamiliar but actually a real and challenging engineering design
problem has similar characteristics. First of all, design always involves choices, such as between
this or that material, this or that piece of equipment. Tradeoffs between good and bad aspects of
a choice are common. Secondly, the design problem is typically open-ended and unstructured
and the engineer would use his or her analytical skills to provide structure to the problem.
Thirdly, some uncertainty is always present and if such uncertainty is significant, an essential
part of the design would be to reduce or mitigate this uncertainty. Finally, although they are not
supposed to, engineers may become emotionally attached to a particular solution or there may be
an emotional connection to a decision made. Engineers are human and therefore have human
foibles. All of this affects decision-making.

Given this, one might think that an ethical dilemma is “just another engineering design problem”.
This is a dangerous analogy. However, it is true that engineers and technically-trained people in
general have an advantage when confronted with an ethical dilemma because of their ability to
analyze situations and systems and because they are generally more comfortable with
uncertainty.

Generally you will find that the ethical dilemmas that arise in professional life involve

• conflicts among goals with worthy consequences
• conflicts among important values
• conflicts among principles that suggest pursuing desirable outcomes and principles that
suggest that those outcomes be subjected to values that are non-consequential.

The task in making ethical decisions is to clarify reasons for resolving a particular conflict or
dilemma.

APSC 450 – Professional Engineering Practice 24
Introduction to Ethics
Ethics and Emotions?
A very interesting observation is the role of emotions in making moral decisions. Greene and
Haidt (2002) describe research that uses neuroimaging techniques to show that parts of the brain
associated with emotional reactions “light up” when a subject is confronted with a difficult moral
judgment, particularly when the judgment engages one personally (e.g., personally killing one
person to save five others as in Fat Man). Using different techniques, Connelly et al (2004) show
that when one is confronted with a problem in professional ethics that has a personal component
(e.g., hiring a friend instead of someone more capable), the emotions are more engaged than if
one is confronted with an ethical problem that affects the financial well-being of one’s employer.

Although a considerable amount of research has been done on emotional engagement in static or
constrained models of ethical and social situations (see Adolphs, 2003), very little is known
about how the emotions become engaged in real world ethical problems in which change and
uncertainty are significant.









APSC 450 – Professional Engineering Practice 25
Introduction to Ethics
References
Adolphs, R., 2003. Cognitive neuroscience of human social behavior. Nature Reviews
Neuroscience 4(2): 165-178.

Axelrod, R. and Hamilton, W. D., 1981. The evolution of cooperation. Science, 211: 1390-1396

Connelly, S., Helton-Fauth, W. & Mumford, M.D., 2004. A managerial in-basket study of the
impact of trait emotions on ethical choice. Journal of Business Ethics 51: 245-267.

Dawes, R. M. and Messick, D. M., 2000. Social dilemmas. International Journal of Psychology,
35(2): 111-116.

Felkins, L., 1996. A rational justification for ethical behaviour. Available at
http://www.spectacle.org/496/moral3.html

Foot, P., 1967. Abortion and the doctrine of the double effect. Oxford Review 5: 5-15.

Frank, R. H., 1988. Passions within Reason. W. W. Norton & Company

Greene, J . and Haidt, J ., 2002. How (and where) does moral judgment work? Trends in Cognitive
Sciences, 6(12): 517-523

Huberman, B. A. and Lukose, R., M., 1997. Social dilemmas and internet congestion. Science,
277: 535-537

Malm, H.M., 1989. Killing, letting die, and simple conflicts. Philosophy and Public Affairs
18(3): 238-258.

Olson, R. G., 1965. The Morality of Self-Interest. New York: Harcourt.

Pence, Gregory, 2000. A Dictionary of Common Philosophical Terms. McGraw-Hill. New York.

Pojman., Louis P., 2002. Ethics, 4th ed. Wadsworth, Belmont, Ca.

Rachels, J ., 2003. The Elements of Moral Philosophy, 4th ed. McGraw-Hill.

Rand, Ayn, 1964. The Virtue of Selfishness. New York: Signet.

Thomson, J .J ., 1985.) The trolley problem. Yale Law Journal 94(6): 1395-1415.

PRIMER ON PRODUCTS LIABILITY
1
I. INTRODUCTION
No matter how well a product is designed, manufactured or distributed, it
may face litigation raising allegations that the product was defectively designed or
manufactured or that warnings respecting its use were inadequate. It is generally in the
interests of manufacturers, distributors, or other parties to defend its product. The most
important aspect of any product is its reputation within the marketplace. If a product’s
reputation is damaged, its market disappears and damages everyone from the designer to
the manufacturer to the distributor.
This paper provides a short summary of the fundamental principles of
product liability in Canada including manufacturing defect, design defect and failure to
warn.
II. OVERVIEW OF PRODUCT LIABILITY IN CANADA
Product liability cases span a broad spectrum of products including: motor
vehicles and vehicle components; recreational vehicles, components and accessories;
home appliances and tools; industrial machinery; computer software and hardware; toys;
building materials and apparatus; chemicals and fuels; food and beverages; drugs and
pharmaceuticals; medical devices and products; sporting equipment; protective clothing;
and, tobacco.
A. Basis of Liability
The law relating to product liability is relatively new, and has developed
in response to expanding industrialisation and the rise of our consumer-driven society.
Along with the ever-growing number of products in the marketplace, the users of such
products have suffered personal injuries, damage to their property, or what the Courts call
“pure economic loss”. The law has created remedies for persons who suffer such harm,
while attempting to shift the risk and costs from the injured party to the manufacturer of
such products. As noted by one Canadian judge:
This is an age of consumption. The manufacture of
products has become one of our most important economic
activities. Billions of dollars worth of goods are being
fabricated annually in Canada to satisfy the apparently
insatiable appetites of our consumers. But consumption is
not always pleasurable; danger lurks in defective products.
People may be hurt when things go wrong with the articles
they use.
2

1
This paper constitutes a condensed version of the Product Liability Handbook prepared by the
Product Liability Group of Borden Ladner Gervais LLP. For more information on this practice group at
BLG, see: http://www.blgcanada.com/practice/detail.asp?PAKey=57.
2
A.M. Linden, Canadian Tort Law, 5
th
ed. (Toronto : Butterworths, 1993), at p. 535.
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By requiring the manufacturer of a good to bear the cost of an injury
resulting from the good, as opposed to a single user, the law assumes that the loss will be
spread by the manufacturer to all the consumers of the good instead of only the
unfortunate one.
As will be discussed further below, the law of product liability flows from
two sources: the law of contracts and the law of torts (primarily the law relating to
negligence).
B. Target Defendants in Product Liability Cases
Product liability claims can take a variety of forms and involve a number
of different classes of target defendants.
The following sets out the most common classes of potential defendants in
product liability cases and describes the general circumstances in which these defendants
may be exposed to liability.
1. MANUFACTURERS
Manufacturers represent the most common class of defendants in product
liability cases. The term “manufacturer” is used broadly to describe a wide range of
sub-manufacturers and other participants in the process of “putting up the product”. A
“manufacturer”, as the term will be used in this paper, may include one who designs,
assembles, installs or packages products.
Generally, a manufacturer will be named either as a defendant in a product
liability lawsuit, or will be added to the lawsuit as a third party by one of the named
defendants. Usually no contract exists between a manufacturer and the purchaser of a
product and, as a result, when a manufacturer is targeted as a defendant, it will be
necessary for the plaintiff to establish that the manufacturer was negligent in either the
design or manufacture of the product at issue.
A manufacturer owes a duty to users of its products to take reasonable
care to ensure that its products will not result in personal injury or property damage, at
least within the scope of the product’s foreseeable uses.
Claims against manufacturers will generally be based on one or more of
the following:
• a defect that has arisen in the manufacturing and/or assembly
process resulting in a product which is inconsistent with its design;
• a failure to properly inspect the product prior to it being put on the
market;
• a product whose design falls below the applicable standard of care,
including the design of unnecessarily dangerous products;
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• a failure to adequately warn of reasonably foreseeable dangers
associated with a product; or,
• the introduction of a new product to the market without conducting
reasonable testing.
2. RETAILERS, IMPORTERS, WHOLESALERS AND DISTRIBUTORS
Retailers, importers, wholesalers and distributors of products will often be
named as defendants in product liability claims, notwithstanding that they may have
played no role whatsoever in the manufacture or design of the allegedly defective
product. These claims may be based either on breach of contract or negligence
depending on the role played by the target defendant.
In cases where the plaintiff has a direct contractual relationship (for
instance, a claim against the retailer from whom the product was purchased), a claim will
likely be based on a breach of the express and/or implied terms of the contract for sale.
Retailers will then often claim contribution and indemnity from the manufacturer of the
allegedly defective product and/or other players in the chain of distribution.
In addition, all players in the chain of distribution may be exposed to
liability in negligence.
3. SUPPLIERS OF COMPONENT PARTS, CONTRACTORS
Manufacturers often incorporate component parts manufactured by
independent suppliers into their final products. To the extent that a manufacturer fails to
take reasonable steps in selecting its supplier and/or fails to take reasonable steps to test
or inspect the component parts, it will be exposed to a claim in negligence. In addition, a
manufacturer may be found liable for the negligence of suppliers of component parts,
notwithstanding that the manufacturer has not committed any independent act of
negligence. In such cases, a manufacturer will often seek to add the supplier of
component parts to the lawsuit as a third party and claim contribution and indemnity.
4. GOVERNMENT REGULATORS
Although the government is generally not liable for a failure to legislate or
regulate, it may be exposed to liability in other circumstances in the product liability
context. When a government official is under a statutory duty to exercise care, he or she
must use reasonable care in fulfilling that duty or implementing a policy. For example,
government officials have been held liable for defective buildings in numerous cases
arising out of negligence in their role of inspecting the work. Other examples include
failing to respond to complaints and reports of safety infractions by an airline and failing
to enforce their own regulations.
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III. LIABILITY IN CONTRACT
A. EXPRESS WARRANTIES
1. General Principles
In the context of the sale of a product by a vendor to a purchaser, an
express warranty is a promise or a statement of fact made by the seller to the purchaser
relating to the item being sold, and becomes part of the contract of sale. It is not an
assurance that is implied or inferred, and the scope and meaning of the warranty will be
determined by the express words used by the seller in making his promise. Accordingly,
this is to be distinguished from statutory implied conditions (such as those found in the
Sale of Goods Act).
2. “Warranties” and “Condition”
It is important to distinguish between warranties and conditions.
A warranty is an agreement about goods subject to a contract of sale that is
collateral to the main purpose of the contract. A warranty may be express or implied. A
breach of warranty gives rise to a claim for damages, but does not give the injured party
the right to reject the goods and treat the contract as repudiated. A warranty is also
described as being collateral to the main purpose of the contract.
A condition in a sales agreement may be defined as a fundamental
obligation imposed on either of the parties, the performance of which is vital to the
contract. In contrast with a warranty, a condition is a stipulation in a contract, which, if
breached, may give rise to a right to treat the contract as repudiated.
The courts have repeatedly held that the determination of whether a
contractual term is a warranty or a condition is a substantive difference, which is
independent of what the parties choose to call or label the particular term. Instead, the
court examines the purposes of the contract to assess whether the promise in question is
central to that purpose, or collateral to it. This decision will be critical in defining the
potential remedies available to the injured party, and may also have an impact on the
applicability of various disclaimers or limitations on liability.
3. Limitations to Express Warranties
Many express warranties are limited by virtue of the wording of the
provision itself. For example, it is common that a warranty be limited as to time, such
that the quality or fitness for purpose of a particular product is warranted for a particular
length of time after purchase. The extent of the limitation in the warranty is a matter of
contractual interpretation. While less common, there is no reason why the limitation
cannot be limited by other parameters, such as the use to which the product is put, the
degree of quality warranted, and so forth.
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An express warranty may also be limited by exclusions set out in the
contract of sale. It should be noted that consumer protection legislation forbids some
contractual terms, and render them ineffective as against certain types of purchasers. In
British Columbia, such legislation is now called the Business Practices and Consumer
Protection Act, S.B.C. 2004, c. 2.
B. SALE OF GOODS LEGISLATION
Whether or not a sales contract contains provisions regarding the fitness
and quality of a product, the Sales of Goods Act in British Columbia (and comparable
legislation in other common law provinces) implies a condition in the sales contract that
the product be fit for the purpose sold and that the product be of merchantable quality.
These provisions impose strict liability in the sense of liability without
proof of fault or negligence.
1. Application
The Sale of Goods Act applies not only to manufacturers but also retailers,
suppliers, and other merchants who sell products.
As the legislation simply implies conditions in the sales contract, the
general principles of contract law apply. As such, a party advancing a claim under the
legislation must establish privity of contract. An end purchaser who purchases a product
from a retailer can sue the retailer under the Sale of Goods Act and can sue the
manufacturer in negligence. While the retailer can also use the Sale of Goods Act in
suing the manufacturer from whom it directly purchased the product, the Sale of Goods
Act will generally not apply as between the consumer and the manufacturer. The
exception is that where the manufacturer’s promotional materials induced a sale, some
courts have held that strict privity of contract between the manufacturer and the consumer
was not required for the act to apply.
3
2. “Fitness for Purpose”
The Sale of Goods Act provides that, in general, there is no implied
warranty or condition in a contract of sale as to quality or fitness of goods for any
particular purpose. However, there is an implied condition that the goods will be fit for
that purpose in the following situations:
• the buyer either expressly or impliedly lets the seller know the
particular purpose for which the goods are required;
• the buyer relies upon the seller’s skill and judgment; and,

3
Murray v. Sperry Rand (1979), 23 O.R. (2d) 456 (Ont. H.C.J .).
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• the goods are those normally supplied in the seller’s course of
business.
In British Columbia, there is also an implied condition that the goods will
be durable for a reasonable period of time, having regard to the use for which they would
normally be put.
3. “Merchantable Quality”
Where goods are bought by description from a seller who deals with goods
of that description, there is an implied condition in the Sale of Goods Act that the goods
will be of “merchantable quality”.
The concept of a seller “who deals in goods of that description” has been
interpreted to mean a commercial seller. The rationale for this restriction is that in a
commercial sale, the buyer expects that he or she is receiving the quality of goods
customarily sold on the market under the description.
The merchantable quality condition operates as a standard dealers’
warranty that is presumed to exist in practically every commercial sale. It does not
require that the seller has any knowledge of the quality of the goods and it applies even in
cases where the seller has not seen the goods.
The Sales of Goods Act does not define “merchantable quality”.
Generally, the condition requires that the goods be commercially saleable under the
description by which they are sold, or that the goods perform to the reasonable
expectations of the average buyer.
The implied condition of merchantable quality in the Sale of Goods Act is
subject to the proviso that if the buyer has actually examined the goods, there is no
implied condition of merchantability in regard to defects that such examination ought to
have revealed. Note that defects, which would have been revealed by a reasonable
examination, are not excluded, but only those defects that would have been revealed by
examination actually performed by the buyer. Where the buyer inspects the goods, if the
examination would not have revealed the defects in question (latent defects), the
condition of merchantable quality still applies. This is so even though a more thorough
inspection would have revealed the defects.
C. BREACH OF CONTRACT
1. Liability for Breach
When considering a product liability claim, a plaintiff will often first think
in terms of bringing an action in negligence. However, it is generally true that a claim in
breach of contract is easier to prove than a claim in negligence. The prerequisite, of
course, is that there be a contract, whether oral or in writing, between the parties. Once a
plaintiff proves that a contract exists, and that the contract includes a warranty as to the
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product, a claim can then be brought for the breach of an express warranty. Importantly,
unlike a claim in negligence, the plaintiff need not prove that the product is “defective” or
that the defendant failed to exercise reasonable care; the plaintiff need only prove that the
product did not perform in accordance with the warranty. In essence, this approaches
strict liability.
2. Damages
The most typical remedy sought by a plaintiff alleging a breach of contract
is the payment of damages. In contract, the court will attempt to place the parties in the
position they would have been in had the warranty been fulfilled. This calculation can
include consequential damages. Sale of Goods Act legislation in some jurisdictions has
codified the calculation of damages for breach of warranty: a seller’s liability extends to
all consequential damage caused by the breach of warranty, but is limited by an objective
test as to what a reasonable person would have foreseen as the likely consequence of the
breach. However, if the breaching party has actual knowledge that the breach of which
would be likely to cause a greater loss, the recoverable damages would extend to
consequences beyond which the objective reasonable person would foresee.
A claim in breach of warranty, as with most claims in either contract or
tort, imposes a duty on the claimant to take reasonable steps to mitigate his losses. For
example, if the purchase of a substituted item would lessen the damage, the plaintiff can
recover the expenses associated with the purchase of the substituted item, as long as the
substitute is of comparable quality. Where a plaintiff fails to take reasonable steps to
mitigate, the court will often assess damages as if the plaintiff had taken those reasonable
steps.
D. COLLATERAL WARRANTIES
A manufacturer may be liable for breach of a warranty notwithstanding
the absence of any contractual relationship with the person to whom the warranty is
given. Where a manufacturer issues a “warranty” or “guarantee” with its product (oral or
written), the manufacturer may be found liable under the terms of that warranty or
guarantee as a collateral contract, even though the actual product was sold by another
party and there is no direct privity of contract. The test is whether the statement was
made to induce the buyer to act on it, and, if the buyer relied on the statement, whether it
was reasonable to rely upon the statement.
E. DEFENCES
1. Contractual Exclusions of Liability
A contract may contain terms which exclude or limit a contracting party’s
liability for negligence, implied warranties at common law or the statutory implied
conditions under Sale of Goods Act legislation. Such clauses, known as exclusion,
exemption or waiver clauses, may serve as a complete defence to a claim in contract or in
negligence. Consequently, contract terms purporting to limit liability are scrutinized
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carefully by the Court. Furthermore, the onus rests on the party relying on the exclusion
to prove that the other party to the contract understood and agreed to the term prior to
entering into the agreement.
2. Enforcement of Exclusion Clauses
The general principle of interpretation of exclusionary clauses is that they
are to be strictly construed against the party in whose favour they are expressed. Several
different grounds have been developed by the court and legislature for the control of
exemption clauses. The court-developed principles can be summarized as follows:
• Lack of Adequate Notice: Notice of any unusual or onerous
clause must be brought to the attention of a weaker party where
there is an inequality of bargaining power, especially where the
clause is buried in a long standard form agreement. Even with
adequate time to read the contract, some courts have held that
standard form contracts are not meant to be read. The average,
even sophisticated, consumer could spend hours reading the
contract and not understand the implication of most of the terms.
Any significant limitations or exclusions of liability must be
brought to the attention of the purchaser prior to the sale.
• Misrepresentation: If there is a misrepresentation as to the effect
of the exemption clause, the exemption clause will not apply.
• Strict Interpretation: Exemption clauses in contracts will be
interpreted strictly against the person who seeks the benefit of the
exemption clause. The wording of the exclusionary clauses must,
therefore, be clear, direct and unambiguous, and must not be
repugnant to the contract treated as a whole or inconsistent with
any other provisions.
• Fundamental Breach: A fundamental or material breach is a
breach that is “substantial” or “goes to the root of” the contract. In
cases involving fundamental breach, the non-breaching party may
elect to rescind the contract (seek to be put in the position as
though the contract had never been made rather than seeking the
damages flowing from the breach). Some case law suggests that
the breaching party (e.g. a manufacturer) could not then rely upon
a clause in the contract that excluded liability for breach of the
fundamental term. Recent caselaw, however, casts this doctrine
into doubt.
• Unconscionability: The Courts have also held that an exclusion
clause in a contract may not be enforced if it would be
unconscionable, unfair, unreasonable or otherwise contrary to
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public policy. In general, if the parties are of equal bargaining
power, the Court will enforce the agreement made by the parties.
3. Statutory Restrictions on Exclusion Clauses
In addition to the general contractual principles set out above, there are
also statutory restrictions in many provinces governing the validity of exclusion clauses
found in contracts. For instance, British Columbia’s Business Practices and Consumer
Protection Act, S.B.C. 2004, c. 2 would render an exclusion clause unenforceable if the
Court held it to be unconscionable or a deceptive trade practice.
4. Limitation Period
The defendant in a product liability claim based upon breach of contract
may argue that the limitation period has expired. In British Columbia, the general
limitation period for bringing a claim based upon breach of contract is six years. In most
cases, time begins to run, for the purposes of the Limitation Act, from the date that the
contract was breached and the plaintiff suffers loss.
IV. MISREPRESENTATIONS
In product liability cases, liability for misrepresentations usually arises
when something is said about a product that is later found to be untrue. Liability for
misrepresentations can arise in the law of contract and in the law of negligence.
Examples of misrepresentations might include failure of the product to perform
effectively or efficiently as represented. Damages could include damages for actual
physical damage to person or property, or the cost of obtaining and repeating work with
substitute product.
A. CONTRACT
Generally, for there to be liability for misrepresentations in the law of
contract, there must be a contract between the plaintiff and defendant. This may seem
trite, but, as has been noted, in most distributor situations no contract exists between the
manufacturer of the product and the ultimate purchaser. There is a contract typically
between the manufacturer and the distributor. There is a contract between the retailer and
the purchaser. There may be no contract between the manufacturer and the retailer. This
relatively simple concept has become complicated because, frequently, manufacturer’s
warranties flow through to the ultimate purchaser.
If the misrepresentation is “material” such that it goes to the root of the
contractual obligations, the plaintiff may be entitled to rescind the contract. This means
that the contract is undone and the parties are put back in exactly the same position as
they were in before the contract was concluded. For example, in a transaction involving
the sale of a product, the seller would get the product back and the buyer would get his or
her money back.
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B. TORT CLAIMS: NEGLIGENT MISREPRESENTATIONS
To establish a negligent misrepresentation, the plaintiff must prove:
• a close relationship between the representor and the plaintiff such
that the representor would know that carelessness on its part would
cause damage to the plaintiff;
• the representation is untrue, inaccurate, or misleading;
• the representor acted negligently in making the representation;
• the plaintiff relied, in a reasonable manner, on the negligent
misrepresentation; and,
• the representee relied on the representation to its detriment and
damages resulted.

V. LIABILITY IN NEGLIGENCE
A. BASIC TEST
Most product liability claims are founded in negligence. In order to
succeed in a negligence action, a plaintiff must prove, on the balance of probabilities, that
the defendant was negligent; that is, the plaintiff must prove:
1. the defendant owed a duty of care to the plaintiff;
2. the defendant breached the requisite standard of care associated with
the duty; and,
3. the defendant’s breach caused the plaintiff’s damages.
As noted below, the plaintiff has the “burden of proof” with regard to each
step of this test.
1. Step One: The Duty of Care
The “duty of care” is defined broadly by the courts. In the product liability
context, manufacturers and designers are under a duty to exercise a reasonable degree of
care commensurate with the risk of injury or harm involved to ensure that their products
are free from latent or hidden defects so as to avoid unreasonable risk of injury to a
foreseeable plaintiff.
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This duty is owed to anyone who might reasonably be expected to be
injured or suffer damages by the product. Included in the general duty of care of a
manufacturer is the duty to warn consumers of dangers inherent in the use of a product of
which the manufacturer is or ought to be aware.
2. Step Two: The Standard of Care
The law does not demand a standard of perfection, but does require all
persons to meet the applicable “standard of care” in any given situation. This standard is
generally defined as what would have been exercised by a reasonable person in all the
circumstances of the case. Accordingly, manufacturers of potentially dangerous or
technically complex products are required to meet a higher standard of care - one that is
in keeping with the standards of their profession or trade.
The common law of product liability in Canada does not include strict
liability (i.e. liability without fault). Otherwise, manufacturers and designers would be
liable for every accident that occurs, and would effectively become insurers. Rather, the
standard of care is the duty to use reasonable care in the circumstances.
4
Although the courts in Canada have rejected a “strict liability” doctrine
(unlike courts in U.S. jurisdictions), the standard of care in some circumstances may be
so high that it approximates or almost becomes strict liability.
3. Step Three: Causation
The plaintiff must prove on the balance of probabilities that the negligent
conduct of the defendant caused or contributed to the damages of the plaintiff. Causation
is a question of fact.
The courts will generally apply the “but for” test - but for the defendant’s
breach of the standard of care, would the plaintiff have suffered the loss? Nevertheless,
in some limited circumstances, causation may also be established if the plaintiff
establishes that the defendant’s breach materially contributed to the loss or damage.
Where the conduct of two or more independent tortfeasors combines to bring about an
indivisible harm, the court will determine whether each defendant’s conduct was a
contributory factor in bringing about the plaintiff’s injury. If so, each negligent
defendant then becomes jointly and severally liable to the plaintiff for 100% of the
plaintiff’s loss, but each may seek reimbursement from the other negligent parties
according to their respective degrees of fault.
B. DEFENCES
There are many general defences that may apply to any given claim.

4
The leading case on this subject in British Columbia is Stiles v. Beckett (1993), 22 C.P.C. (3d) 145
(B.C.S.C.), aff’d (1996), 17 B.C.L.R. (3d) 144 (C.A.). This case can also be found at the Court’s website at:
http://www.courts.gov.bc.ca/jdb-txt/sc/93/00/s93-0002.htm.
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1. Common Defences
Besides the usual defences that the defendant did not owe a “duty of care”
to the plaintiff, and that the plaintiff did not suffer any injuries, the most common
defences in product liability cases are:
1. Statutory Compliance: Compliance or non-compliance with a
statutory standard is not proof of negligence or absence thereof, but
will be merely one factor to be considered in determining whether
there has been negligence. J ust as negligence does not necessarily
follow from non-compliance, compliance with a statutory standard is
not a complete defence to an action for negligence in the design of a
product. This principle also applies to actions based on the failure of a
manufacturer to warn, where the warning complied with that
recommended by regulatory bodies.
2. Intervening Causes: A manufacturer may successfully avoid liability
where a separate and intervening act of negligence occurred so as to
break the chain of causation between the negligent manufacturer and
the injured plaintiff.
3. Contributory Negligence: Negligence on the part of the plaintiff is
not a complete defence but, if proved, will reduce the award of
damages in proportion to the degree to which the plaintiff is found to
have been at fault. In order for a plaintiff to be contributorily
negligent, the defendant must prove on a balance of probabilities that
the plaintiff breached the standard of care required for the plaintiff’s
own safety and protection. The standard of care is whether the
plaintiff acted reasonably in all the circumstances of the case.
4. Assumption of Risk: While often raised, the defence that the plaintiff
voluntarily assumed the risk of loss or damage rarely succeeds. The
Courts are more willing to find contributory negligence and apportion
the loss between the plaintiff and defendant rather than absolve the
defendant of liability. The defence of voluntary assumption of risk
will only be available where the plaintiff was aware of the defect in the
product and had fully appreciated and consented to all risks, including
legal risks, inherent in the continued use of the defective product. The
burden of proof rests upon the defendant.
5. Misuse of Product: Where a plaintiff sustains injury through the use
of a product in a manner which was neither intended nor reasonably
expected, such misuse may absolve the manufacturer of any liability.
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The test is whether the misuse was so unlikely that it would not occur
to the manufacturer nor be reasonably foreseeable.
5

6. Learned Intermediary: Where a product is sold not directly to the
public, but to a professional who then dispenses the product to the
public, the manufacturer may be able to avoid liability where the
professional misrepresents the product or fails to determine if the
product is appropriate for the customer.
The “learned intermediary” defence is most commonly used by
manufacturers of prescription drugs or medical devices. A manufacturer, nevertheless, is
obliged to warn the learned intermediary of possible uses and side-effects associated with
the use of the product. If the manufacturer advises the learned intermediary who then
mis-prescribes the use of the product, the learned intermediary (not the manufacturer)
will be held responsible for its inappropriate use. (See the discussion below regarding the
“duty to warn”).
2. Limitation Period
The other common defence is that the claim is barred because it was
commenced outside the applicable limitation period.
The law relating to limitation periods can be complex. In British
Columbia, the general limitation period is six years. For actions involving personal injury
or damage to property, the limitation period is generally two years. Time begins to run
under the Limitation Act when the plaintiff becomes aware, or ought to have been aware,
of the claim. While this normally is the date of the loss, the running of time can be
“postponed” until much later depending on when the plaintiff became aware of the facts
that could reasonably lead him or her to become aware of the claim. Numerous
exceptions may apply to extend the otherwise applicable limitation period.
C. NEGLIGENCE CLAIMS AGAINST MANUFACTURERS
Under Canadian law, a manufacturer of a product owes a duty to users of
the product to take reasonable care to ensure that the product is reasonably safe for its
foreseeable use. When a product is not manufactured in accordance with the
specifications that the manufacturer intended, it may be said to be defective. A
manufacturer who has failed to take reasonable care to ensure that a product sold is not
defective will be held responsible for any harm caused by the use of the defective
product.

5
Where a foreseeable misuse of the product creates a potential danger, it is incumbent upon the
manufacturer to warn the user of that danger. The manufacturer does not have a duty to warn of obvious
dangers inherent or associated with the use of its product.
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1. The Basic Test
A plaintiff in a negligent manufacture case must prove the following:
• the product in question was defective in that it was not
manufactured in accordance with the specifications that the
manufacturer intended;
• the defect arose as a result of the manufacturer’s failure to take
reasonable care; and,
• the plaintiff sustained harm which was caused by the defective
condition of the product.
The law does not impose strict liability on manufacturers so that they are
liable for all harm caused without proof of negligence. As such, the law does not require
a manufacturer to produce products which are accident proof, and the manufacturer is not
“an insurer” of anyone who suffers harm from the product.
2. Proof of Defect
The proof of a defect in a negligent manufacture case is a threshold issue.
Unless a defect is proven, it is unnecessary to consider the other elements of the tort.
While the plaintiff has always had the burden of proving the presence of a
defect in the product in question, such defect was commonly proved by inference from
circumstantial evidence. This circumstantial evidence usually took the form of proof that
the plaintiff had been injured while using the product properly, and the product had failed
under normal use. It has been argued by plaintiffs, and accepted by the courts, that where
the product was being used properly, injury to the plaintiff could only be explained by the
presence of a defect in the product. The burden would then shift to the manufacturer to
prove - if it could - the absence of a defect in the product. Recent court decisions in
Canada (especially in Ontario) in the area of products liability have required actual - not
merely circumstantial - proof of a defect. Where the presence or absence of a defect can
be definitively determined by scientific analysis and testing, the courts have required
plaintiffs to produce such proof. The plaintiff must retain an expert to examine the
product and provide expert evidence that establishes the presence of a defective condition
in the product. Without such proof, a plaintiff’s claim should fail.
In some cases, the presence or absence of a defect is simply not capable of
actual physical proof. In those circumstances, the courts may still infer the presence of a
defect where there is sufficient circumstantial evidence to prove, on a balance of
probabilities, that a manufacturing defect was present in the product. To satisfy this test,
a plaintiff will generally have to establish the absence of any other reasonable
explanation for what happened. In most cases, however, plaintiffs will be required to go
to the expense of obtaining expert evidence to establish actual proof of a defect.
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Accordingly, the proof of a defect now presents a real hurdle for a plaintiff to overcome
in a negligent manufacture case.
3. Proof of Negligence
Even when the presence of a defect in the product in question can be
shown, the plaintiff must still show that the defect arose as a result of some lack of care
on behalf of the manufacturer. Proof that the product was allowed to leave the
manufacturer’s plant in a defective condition is usually sufficient to prove that there was
some lack of care.
For all intents and purposes, where the product in question has been
shown to be defective, the onus shifts to the manufacturer to show that the defect was not
the result of its failure to take reasonable care on its part. As well as faulty assembly or
fabrication of a product, courts have also imposed liability on a manufacturer for failing
to have in place proper systems of inspection, quality assurance and quality control.
Even where near perfect systems have been devised, the possibility of human error
remains. Accordingly, in defending a negligent manufacture case, a manufacturer will
have to lead evidence to show that it had proper procedures and protocols in respect of
employee training, inspection and quality control.
D. CLAIMS OF NEGLIGENT DESIGN
The courts have not clearly defined the law of negligent design. As in
negligent manufacturing cases, the plaintiff must first prove that a product was defective
in order to establish liability on the part of the designer. It is generally stated that a
design defect arises where the product is manufactured as intended, but the design gives
rise to malfunction, or creates an unreasonable risk of harm which could have been
reduced or avoided through the adoption of a reasonable alternative design.
1. The Test
In determining whether the design defect creates an unreasonable risk of
harm, courts generally apply a “risk-utility test”: was there a reasonable alternative
design which was safer? One simple example of an alternative design might be the
provision of a guard to protect against contact with moving parts. As stated by a justice of
the Supreme Court of British Columbia:
… a manufacturer of a product does not have the right to
manufacture an inherently dangerous article when a method
exists of manufacturing the same article without risk of
harm … the manufacturer has a duty to avoid such risk
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where safer alternatives of product design were reasonably
available to it.
6
This analysis necessarily involves a determination of the state of the
knowledge and technology in the industry responsible for the design of the allegedly
defective product at the time it was designed.
2. “Risk-Utility Test”
In assessing whether there was a reasonable alternative design available at
the relevant time, the court will consider many factors including:
• The utility of the product to the public as a whole and to the
individual user. This is to be contrasted against the product with
the alternative design.
• The likelihood the product will cause harm in its intended use.
• The severity or magnitude of the harm that may be caused by the
product. The Court will be more critical of the design of a product
with the potential to cause very severe injuries.
• The availability and consequences of adopting the alternative
design.
• The probability and severity of harm that may be present in an
alternative design. The overall safety of the product must be
assessed.
• The effects of the alternative design on the product’s function and
cost.
• The manufacturer’s ability to spread any costs related to improving
the safety of the design.
• Whether the product was adequately tested for risks of harm before
being sold to the public. A manufacturer must take steps to
identify foreseeable risks involved in the use of its product and
cannot use its own lack of testing to argue that the harm was not
foreseeable.
Although they are not factors which address the risk-utility test, the court
will also consider the following additional factors:

6
Tabrizi v. Whallon Machine Inc., [1996] B.C.J . No. 1212 (QL) (S.C.). This case can be found at
the Court’s website: <http://www.courts.gov.bc.ca/jdb-txt/sc/96/08/s96-0819.txt>.

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• whether the design complied with any applicable statutory or
regulatory standards. Simply showing that a product complied
with a particular standard will not absolve a designer of liability.
That evidence will, however, greatly assist in showing that the
design was not unreasonable.
• whether the design complied with industry standards. In other
words, was it “state of the art”? The courts, however, have found
industry standards to be negligent in certain cases.
• the ability of the plaintiff to have avoided injury by careful use of
the product. The manufacturer may be able to point to the
plaintiff’s misuse of its product to establish that it was not
defective or it can use this evidence to establish contributory
negligence on the part of the plaintiff.
None of these factors alone is determinative of the question of whether
there is a design defect. They are not given the same weight. They are all considered
together and balanced by a court to reach a conclusion on the issue. However, a designer
would be well advised to carefully consider the risks of harm that may be created by its
products. If the designer can make the product safer with the only variable being
increased cost, it must carefully consider its potential liability against the cost savings.
E. DUTY TO WARN
Manufacturers or distributors are under a duty to warn all potential users
of dangers attendant with the use of their products. As stated by the Supreme Court of
Canada:
It is well established in Canadian law that a manufacturer
of a product has a duty in tort to warn consumers of
dangers inherent in the use of its product of which it has
knowledge or ought to have knowledge…The duty to warn
is a continuing duty, requiring manufacturers to warn not
only of dangers known at the time of sale, but also dangers
discovered after the product has been sold and delivered…
7
It is important to note that no matter how effective, no warning will
exonerate a manufacturer who produces an inherently dangerous product. By the same
token, users of products have a duty to read and heed warnings and instructions supplied
with a product or bear the consequences of any resulting injuries. All warnings must be
reasonably communicated. Because Canada is a multi-cultural country, with a significant
immigrant population which may not be fluent in either of the official languages,
manufacturers are urged to use pictorial warnings in addition to appropriate written
warnings. As well, manufacturers are well advised to consult experts to ensure that any

7
Hollis v. Birch (1996), 14 B.C.L.R.(3d) 1 at 14 (per La Forest J .) (S.C.C.).
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warnings supplied with a product are visible, permanent, as well as clear and
unambiguous.
The manufacturer or distributor must also warn of any foreseeable misuse
of the product. Where a danger is obvious, such as the sharp blade of a knife, a
manufacturer has no duty to warn of the danger of injury. Likewise, if a product is only
designed for use by a skilled person, rather than the general public, there is no need to
warn against the danger that should be obvious to such a skilled person. The content of
the duty to warn was summarized by the B.C. Supreme Court as follows:
… the law is clear that manufacturers owe a duty to warn of
the dangers inherent in their products except where those
dangers are so clearly evident so as to make any warning
silly. Some misuse of a product will be so extreme or
unforeseeable that the danger is not really inherent in the
product but in the user. Some misuse can be foreseen by
the manufacturer and should, to err on the side of caution,
be the subject of a warning but the duty of the manufacturer
to do so begins to wear thin where the danger is more
inherent in the user than the product.
8
There is a sliding scale that requires the warning to be stronger where the
risk of harm is greater. Courts have also warned against the “duty to warn” becoming a
“strict liability solution” for plaintiffs unable to prove negligent design or negligent
manufacture.
9
Where a manufacturer or distributor becomes aware of a danger in the use
of the product, the courts have imposed a very high standard upon manufacturers and
distributors to devise a program to alert owners about product defects. Generally, post-
sale warnings to customers about defects must contained clear language bringing the
danger to the customer’s attention, and clearly advise the user to take the product out of
circulation.
Manufacturers and distributors not only have an ongoing duty to inform
users of all known defects or dangers associated with a product, but they must also warn
where there is reason to suspect that there is a danger associated with the use of the
product. Accordingly, failure to act early in initiating a campaign to warn could result in
the manufacturer or the distributor being liable for any injuries caused as a result of the
suspected defect.

8
Tabrizi, supra at para. 41.
9
Hanke v. Resurfice Corp., 2003 ABQB 616.
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F. EVIDENTIARY ISSUES
While the rules of evidence in a products liability case are not different
from any other negligence case, careful consideration must be given to the following
issues.
1. Burden of Proof
The plaintiff generally bears the burden of proving on a balance of
probabilities each and every element of the cause of action. As noted, in a negligent
manufacturing case, the plaintiff must prove that the product was defective, that the
defect arose as a result of the defendant’s negligence and that the defect caused the
damage or injury complained of. If the plaintiff fails to lead sufficient evidence to prove
any of the elements of the cause of action then the claim must fail.
2. Causation
In order for the plaintiff to be entitled to compensation from the defendant,
it must be shown that the harm complained of was caused by the negligence of the
defendant. For example, in a negligent manufacturing case, it is not sufficient for the
plaintiff to show that he or she was injured while using a defective product. What is
required is proof that the harm would not have occurred but for the existence of the defect
in the product. Accordingly, the general test applied by Canadian courts in respect of
causation is known as the ‘but for’ test.
As mentioned above, the plaintiff has the burden of proving that the harm
was caused by the negligence complained of. Proof of causation with scientific certainty
is often difficult. Accordingly, Canadian courts will often infer causation from
circumstantial evidence where it is proved that the defendants negligence could have
caused the harm complained of and where there is no cogent evidence of any other
competing explanation for how the harm could have been caused.
3. Expert Evidence
Experts play a very important role in the courtroom in products liability
cases and the selection of experienced and well-qualified experts is crucial to a litigant’s
success. The Supreme Court of Canada has identified four prerequisites for the
admission of expert evidence:
• necessity in assisting the court;
• relevance;
• absence of any exclusionary rule; and,
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• the requirement that the expert is properly qualified to give his or
her opinion.
Expert evidence is necessary where it provides information that is beyond
the experience and knowledge of a judge or jury. In order to be relevant, the evidence
must be related to the issues before the court. Expertise is achieved when the expert
possesses special knowledge and experience going beyond that of the judge. In general,
the expert must have sufficient background in the area of expertise, whether from
experience or formal training and study. Courts will often exclude witnesses who do not
satisfy this threshold, although there is an increasing trend toward admitting the evidence
provided the witness is generally qualified and considering any concerns regarding
qualifications in the weight given to the evidence. The evidence given by the expert
witness must be within the scope of his or her expertise.
Expert witnesses are not allowed by the courts to usurp the function and
duties of the trier of fact, or determine the facts of a case, or state conclusions of law.
They may not stray from their area of expertise. If the expert goes beyond his or her
expertise, that evidence will be excluded or given little or no weight.
The trier of fact does not have to accept the evidence of an expert, even if
unchallenged. However, courts state that uncontradicted expert evidence should not be
lightly disregarded. Where two or more experts testify, the trier of fact must decide
which testimony to accept. Where competing experts are equally qualified and credible,
the trier of fact must adopt the theory that most coincides with all other evidence
accepted in the case. The court may also appoint its own expert to help in resolving the
technical issues.
4. Preservation of Evidence
In some cases, the allegedly defective product is altered, lost or destroyed,
whether intentionally or accidentally, before the other party has an opportunity to
examine it. A party who alters or destroys evidence denies the opposing party the
opportunity to fully investigate or defend a claim. Such destruction of evidence is known
as spoliation.
In Canadian courts, the destruction of evidence may give rise to the
inference that the evidence would have been unfavourable to the party responsible for its
destruction. This presumption can be rebutted by independent evidence of the actual
post-accident condition of a product. The courts in the United States have gone further
and apply a “spoliation” inference in favour of the innocent party whereby the court may
assume that the destroyed evidence would have supported the innocent party’s position
on the contested fact. The Canadian law of spoliation is still evolving and it is unclear
whether the negative inference arising out of the spoliation of evidence carries with it the
same consequences.
In any event, it is important to preserve the allegedly defective product in
its immediate post-accident state and to avoid altering or destroying it.
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VI. THE LITIGATION PROCESS
A. THE COURTS IN BRITISH COLUMBIA
The Supreme Court of British Columbia has plenary and inherent
jurisdiction to the whole of this province, and has jurisdiction to hear all in personam
claims in tort, contract, etc. Any one of the parties may request a jury trial. For claims
worth less than $25,000, parties may choose to file their claim in the Small Claims
Division of the Provincial Court of British Columbia.
Appeals from the Supreme Court of British Columbia go to the B.C. Court
of Appeal, and then to the Supreme Court of Canada. Appeals from the Provincial Court
are heard by the B.C. Supreme Court.
Some matters fall within the jurisdiction of the Federal Court of Canada.
This Court, unlike the B.C. Supreme Court, does not have inherent jurisdiction and, in
consequence, there must be a particular statutory grant of jurisdiction for it to adjudicate
a claim. As a practical matter, the vast majority of product liability claims are brought
before the B.C. Supreme Court (or provincial superior courts of other provinces), rather
than the Federal Court.
B. PRODUCTS LIABILITY CLASS ACTIONS IN CANADA
A growing number of products liability class actions are being
commenced across Canada. Seven provinces in Canada, including British Columbia,
have enacted class action legislation.
A class action is a device to allow a plaintiff to assert a claim on behalf of
a large number of other persons who have a similar claim. Class actions, in appropriate
cases, promote the efficient use of the court system and may allow claims to be heard that
would otherwise be uneconomical.
Unlike a typical court case, a proposed class action must be “certified” by
the Court before it may proceed. At a certification motion, a judge determines whether a
proposed class action is suitable to be heard as a class proceeding. The defendant is
given a unique opportunity to attack the validity of the proposed class action before it is
certified.
At this stage, Canadian courts apply a five-branch test for certification:
1. Cause of Action: The pleadings must disclose a cause of action.
The court will only dismiss the claim if it is “plain and obvious”
that the statement of claim does not disclose a cause of action.
2. Identifiable Class: There must be an identifiable class of two or
more persons. Individual issues in products liability class actions
can overwhelm the common issues, particularly issues of causation
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and/or reliance, thereby defeating the efficiency purpose of class
proceedings legislation.
3. Common Issues: The claims of the class members must raise
common issues.
4. Preferable Procedure: The class proceeding must be the
preferable procedure for the resolution of the common issues. The
courts will apply a comparative test when determining whether an
alternative procedure to deal with a product defect is preferable.
The courts consider other means of resolution including settlement
proposals made by defendants prior to certification. In product
liability cases, a product recall may be a preferable procedure.
5. Representative Plaintiff: There must be a representative plaintiff
that would fairly and adequately represent the interests of the class,
has produced a plan for the proceeding that sets out a workable
method of advancing the proceeding on behalf of the class and of
notifying class members of the proceeding, and does not have, on
the common issues for the class, an interest in conflict with the
interests of other class members.
C. DAMAGES
Damages are generally compensatory in nature. Punitive and exemplary
damages are available, but are both exceptional and relatively modest in quantum when
compared with U.S. practices.
In assessing damages for pain and suffering, the Supreme Court of Canada
has imposed an inflation-indexed limit of approximately $310,000. This maximum
amount should only be awarded in cases of near-total disability. For lesser injuries, only
some smaller proportion of the maximum should be awarded. As a result, in Canada
often the greatest component of a personal injury damage award will be amounts awarded
for loss of income or for future care costs.
In recent cases in British Columbia, damage awards in personal injury
claims (involving permanent brain injuries) have exceeded $8 million.
D. PARTIES TO THE ACTION
Plaintiffs have the right to select which parties are named as defendants in
a lawsuit. Defendants are, however, permitted to add other parties to the lawsuit (through
the issuance of Third Party Claims), to the extent that they are of the view that others
should ultimately be responsible for any damages sustained by the plaintiff. These Third
Parties are permitted to defend not only the Third Party Claim issued against them, but
are also permitted to defend the plaintiff’s action.
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Depending upon the nature and complexity of the chain of distribution,
Third Party Claims occur relatively frequently in product liability cases. For instance, if
a plaintiff issues a claim only against the retailer from whom it purchased an allegedly
defective product, the retailer will normally issue a Third Party Claim against the
company from whom it purchased the product and, likely, the manufacturer of the
product on the basis that these entities should ultimately be responsible for any defects in
the product.
Accordingly, at the end of the day, all of the necessary players will
generally be added as parties to a product liability claim.


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