609035214-UofT-PEO-NPPE-Prep-Course-Slides.pdf

Engg

1. PEO-NPPE Professional Practice Exam
(Engineering Ethics and Law Exam)
Preparatory Course
By
Ramadoss Srinivasan P.Eng.

2. 1/26/2021 1
Preparation for NPPE –Professional
practice Exam NPPE
•This will be main focus of our course
•Goals: 1) To really expose the topics of Law and Ethics with case
studies . This will give strong foundation for dealing with issues
we might face in our work life.
•2)Prepare you to take the NPPE exam successfully by going
through the exam format and answer strategy.
•All Materials presented in the seminar is Copyright © 2007
Pearson Education Canada &Copyright © 2010 by Nelson
Education Ltd. It is for your Personal intended use only. This is
not legal advice on specific issues or case.

3. 1/26/2021 2
Approaches During the seminar
•First –law topics, Second part-ethics
•Most difficult topics will be covered, however, due
to time constraints, we will not be able to cover
everything in depth. Independent study is
mandatory.
•Will review key points of the topic (s) from time to
time
•Multiple choice questions in groups / individual

4. 1/26/2021 3
Why Law and Ethics for Engineers?
•P.Eng. Or P.Geo. is a big responsibility. Need to
know what we are getting into
•Governed by Code of Ethics. Professional
misconduct is governed under law
•Law prepares us for being proactive and intelligent
in our dealings. All the time, we interact with service
providers and our clients; need to know the laws to
protect ourselves and the public.
•It is about knowing our responsibilities, doing the
right things and not getting into trouble

5. 1/26/2021 4
Why Law and Ethics for Engineers?
•Other reasons Include:
•Ethics: We are faced with ethical issues when we do
our job e.g.. Public safety vs. project deadlines.
Dealing with contractors who may be related to you
etc..
•Law: With Mega infrastructure projects/product
liabilities…, Legal issues are important to us
•We are accountable to public for public projects.
•That why the Association gets us to go through this

6. 1/26/2021 5
Engineering Law and professional liability-
Important Topics
•Canadian Legal Systems & International
Laws (chapter 1)
•Business Organizations (chapter 5)
•Contracts (chapter 6 to 11)
•Tort Liability (chapter 12)
•Limitation Periods, Proof, Vicarious
liability (chapter 13)

7. 1/26/2021 6
Engineering Law and professional liability-
Important Topics…Cont
•Arbitration and alternative Dispute
resolution (ADR) & Expert Witness
(Ch14)
•Intellectual Property –Patents,
Trademarks, software issues &Copyright
(Ch 4)
•Health & Safety laws (Ch 22)

8. Practical Law of Architecture,
Engineering, and Geoscience
Chapter 1
The Canadian Legal System

9. 1/26/2021 8
Canadian Legal Systems (Chapter 1)
•Legal system in Canada based on English common
law.
•Law is out of two origins
•Legislation-Government made laws Like Taxes,
EngGeoMb ACT of Manitoba, Labor law …
•Common law or Judge made law-In deciding cases, the
courts apply legal principles established in previous
court cases. These court decisions are known as –
Common Law-. It is judge –made law

10. Canadian Constitution
•Statutes (British, Canadian); conventions
•Division of powers: private law generally within
provincial government jurisdiction; exceptions
include federal labour law, competition law
•Charter
•Operational conflict: federal statute prevails
(Continued)

11. Canadian Constitution
(Continued)
•Law within provincial government
jurisdiction varies between provinces: lien
legislation, employment and labour
legislation.
•Territories: power assigned by federal
government, but act much like provinces

12. Canadian Court System
•Each province has a superior trial level
court and court of appeal: judges federally
appointed
•Separation of powers is a constitutional
principle requiring independence of the
judiciary
•Supreme Court (SC) of Canada: matters
of national importance (require leave)
(permission required to be heard in SC)

13. Canadian Court System
(Continued)
(Continued)

14. Canadian Court System
(Continued)
•Each province has a lower trial court:
jurisdiction limited by subject matter (e.g.
cannot deal with liens) and value of claim
(e.g. British Columbia Small Claims Court
has claim value limit of $25 000)
•Lower trial courts typically also handle
criminal and family matters

15. The Creation of Law
•Law is dynamic →uncertainty
•Statutes and regulations: federal and
provincial. Authority can be delegated
•Common law: rules established by
previous decisions
•As judges interpret and apply statutes
and common law rules, more law is
created

16. Subject Areas and Principles
•Contract law
–Key area of law for construction disputes
–Contracts are voluntary, often need not be in
writing, define rights and responsibilities
•Tort law
–Duty to not harm those in the community,
intentionally or unintentionally
–Negligence is just one type of tort, but is
common in construction disputes

17. Case law
•Construction disputes are fact specific
•As the law changes, past cases become
less applicable
•Beware of relying on cases currently
being appealed
•All relevant cases must be considered

18. Case Citations
•Case citations indicate where printed or
electronic copies of the case can be
found
•Citations for print reporters provide the
name of the reporter, volume, and page
number
•Citations for electronic case databases
indicate the name of the database and
provide an electronic indexing number

19. 1/26/2021 18
Canadian Legal Systems &Business
Organizations (Chapter 1nd 2)Cont…
•Theory of precedent: Applying legal principles
established earlier for the current case
•Terminology: Plaintiff, Defendant
•Plaintiff: one who makes the claim
•Defendant: One who is defending the action or
claim.

20. Practical Law of Architecture,
Engineering, and Geoscience
Chapter 5
Business Organizations

21. Overview
•Many different forms of business
organization: each has strengths and
weaknesses
•Main types:
–Sole proprietorship
–Corporation (Company)
–Partnership

22. Sole Proprietorship
•An individual carrying on business
•Unlimited liability
•Required to register a business name
•Not tax efficient for high income levels
•Low set up costs

23. Partnerships: Introduction
•Governed by provincial legislation
•Partnership agreements not required, but
advisable
•Each partner jointly liable for the debts
and obligations of the partnership
•Liability of partners is not limited to the
partner's proportionate share

24. Partnerships: Formation
•Do not require written agreement
•The nature of the relationship, not the label
given to it by the partners, determine
whether it is a partnership
•Parties jointly participating to make a profit
are likely in partnership
•Generally, registration is required
(Continued)

25. Partnership: Formation
(Continued)
•Provisions of the legislation apply unless
the partners contract out of the statute
•A corporation may be a partner
•Fewer fees and filing requirements for
partnerships than for corporations
•Tax implications may be complicated for
partnerships

26. Partnerships: Fiduciary Duty
•Partners owe each other fiduciary duties
•Fiduciary duty:
–Special relationship of trust
–Required (where there is a conflict) to put the
interests of the partnership ahead of one's
own
•Partnership agreement cannot negate the
fiduciary duty

27. Limited Partnerships
•Require at least one general partner and at
least one limited partner
•Limited partners liable only to the extent of
their investment
•General partner has unlimited liability (but
the general partner could be a corporation)
•Limited partners not entitled to manage the
business

28. Limited Liability Partnerships
•Partners not liable for the wrongs of other
partners
•Partnership assets are at risk when any
partner commits a wrong
•Liability insurance is mandatory for
limited liability partnerships

29. Corporations: Introduction
•The corporation is a separate legal person
•Limited liability
•Requires registration of a name, and that
name must warn the public of the limited
liability nature of the enterprise
•Can be incorporated federally or provincially

30. Corporations: Separate Legal
Entity
•The corporation has a separate legal
identity from its shareholders and directors
•Corporation should have separate bank
accounts and must keep separate records,
have checks in the corporation's name etc.
•Shareholder's may be required to
guarantee the obligations of the
corporation

31. Corporations: Organization &
Control
•Owned by shareholders
•Day to day management by officers who are
appointed by the directors (officers may or may not
be directors)
•Officers and directors must be individuals i.e. a
corporation cannot be an officer or director
•Articles of incorporation define the nature of the
business, and the ownership structure

32. Corporations: Capacity
•Being a legal person, the corporation can enter into
contracts in its own name
•Depending on the type of contract, special
authorization may be required
•The articles of association may restrict the activities
the business can engage in ( E.g. Consulting
Engineering company can’t deliver pizza or cut
hair), or specify special approval procedures for
certain contracts

33. Corporations: Debt and Equity
•Debt: corporate funding obtained through
borrowing
•Equity: corporate funding obtained
through investment by shareholders
•Equity also generated through profits of
the corporation

34. Corporations: Public v Private
•Private (closely held) corporation:
–all shares held by a small group of shareholders
–shares not traded on a public market
–more limited disclosure requirements than for
public corporations
•Public corporation:
–shares traded publicly
–stringent filing and disclosure requirements

35. Corporations: Officers &
Directors
•Officers and Directors owe fiduciary duties to the
corporation; must disclose conflicts
•Risk of personal liability for officers and directors:
–Derivative action (Lawsuit brought on behalf of a corporation by
one or more of its shareholders against its directors and/or officers to seek
redress for a breach of fiduciary duty, gross negligence or other serious
matter )
–Liability under statute e.g. environmental
regulations, employment standards, tax
•Due diligence defense: Acted reasonably and took
reasonable precautions?Mitigate risk: corporate
indemnity; insurance

36. Corporations: Insider Trading
•Unlawful insider-trading = trading in reliance
of information not disclosed to the public
•Not all insider trading is unlawful
•Stock tipping also prohibited
•Insider trading rules apply to share and
commodities markets
•Civil and criminal liabilities

38. 1/26/2021 37
Tort Liability (Ch 12 Very Important)
•No contract required between the parties.
Example : Pedestrian struck by automobile. Even
though there is no contract. Still Driver of the
automobile is liable.
•Generally negligence of one person causing
damages to the other ( must satisfy Tort
principles)
•Tort: Means Civil wrong

39. 1/26/2021 38
Tort Liability (Ch 12 Very Important)
•Back Ground of Tort Laws:
Traditionally a contract is required to claim damages
Certain cases like Dongoghue V. Stevenson( Decomposed snail in
a bottle of ginger beer. Court ruled manufacturer liable)
Few other cases involving financial services also took the above
path and Tort liability become widely known

40. 1/26/2021 39
Tort Liability (Ch 12 Very Important)
•Unskilled practice or professional misconduct
•46(1)Conduct of an investigated person that in the opinion of the panel
•(a)is detrimental to the public interest;
•(b)is conduct unbecoming a professional engineer or professional geoscientist;
•(c)is misconduct in the practice of professional engineering or professional
Geoscience;
•(d)contravenes this Act or the by-laws or the code of ethics adopted under
section11;
•(e)displays a lack of knowledge of or lack of skill or judgment in the practice of
professional engineering or professional Geoscience; or
•(f)demonstrates incapacity or unfitness to practice professional engineering or
professional Geoscience or demonstrates that the person is suffering from an ailment
that might, if the person is allowed to continue to practice professional engineering or
professional Geoscience, constitute a danger to the public;
•constitutes either unskilled practice of professional engineering or professional
Geoscience or professional misconduct, or both, as the panel finds.

41. 1/26/2021 40
Tort Liability (Ch 12Very Important)
•Purpose of Tort law : To compensate the victims
of tort. Punishment of wrongdoers is not the
purpose of tort laws
•Other laws like Criminal laws focus on punishing
the wrong doers

42. 1/26/2021 41
Tort Liability (Ch 12)
–Principle of tort laws are
_ The defendant owed the plaintiff a duty of care
–The defendant breached that duty
–The plaintiff suffered a loss
–The breach of duty by the defendant was the
proximate cause of the plaintiff's loss
•If any of the above is not substantiated , plaintiff
will not succeed

43. 1/26/2021 42
Tort Liability (Ch 12 Very Important)….
•Duty of Care:
•We need to provide service in accordance with
the conduct of a prudent and diligent person
(engineer) in the circumstances.
•Common example –a Doctor owes a duty of care
to his/her patient. What about an engineer?

44. 1/26/2021 43
Tort Liability (Ch 12 Very Important)….
•Breaching the Duty by one’s conduct:
•Not doing the right thing, due to whatever
reason.

45. 1/26/2021 44
Tort Liability (Ch 12 Very Important)….
•Economic Loss:
•Usually tort law does NOT involve
financial loss, but it is sometimes possible
to recover economic loss( wrong financial
advice Hedley Vs Byrne)
•Product liability matters : Sometimes it
may be possible to recover under tort law.

46. 1/26/2021 45
Tort Liability (Ch 12)
•Concurrent Tort feasors: Torts concur to
produce same damage. More than one party to be
liable in such tort action. (Example: Engineer &
Architect both were negligent resulting in loss to
the owner –who engages them for the project .
Engineer and Architect both are liable and are
called concurrent Tort feasors

47. 1/26/2021 46
Tort Liability (Ch 12)
•Other torts
•Tort of defamation : Libel (written) and slander
(verbal)
•Occupiers Liability: The occupier of the
property must exercise standard of care to
ensure the safety of individuals coming on to
that property
•Tort of Nuisance: To alleviate undue
interference with comfortable and convenient
enjoyment of the plaintiff’s land

48. 1/26/2021 47
Tort Liability (Ch 12)
•Disclaimer clause :
•When dealing with a Tort claim where a disclaimer
clause is present, all the general approaches for tort
liability should be discussed. Often, the court will take
the disclaimer into consideration and tort claim may not
be successful .

49. 12-48
Practical Law of Architecture,
Engineering, and Geoscience
Chapter 12
Torts

50. 12-49
Overview
•Tort = breach of a duty of care owed to another
party that causes injury or loss to that other party
•Negligence is the tort architects, engineers and
geoscientists are most commonly sued for
•Two categories of tort: intentional and unintentional
•Tort law evolves continually as new cases are
decided

51. 12-50
Categories of Tort

52. 12-51
Overview of Negligence
•Negligence is an unintentional tort
•Basic elements:
–The defendant owed the plaintiff a duty of care
–The defendant breached that duty
–The plaintiff suffered a loss
–The breach of duty by the defendant was the
proximate cause of the plaintiff's loss
•Negating any element will be a complete defense to
a claim of negligence

53. 12-52
Duty of Care
•Duty of care is an unsettled area of law
•Whether a duty exists is based on reasonable
forseeability
•As a matter of policy, duty of care is limited to
restrict the amount of tort liability in society
•A duty of care is more likely to exist where there is
a pre-existing relationship between the parties
•A tort duty of care can co-exist with a contractual
duty of care

54. 12-53
Duties of Care for Engineers
•Professionals owe a tort duty of care to the owner even if
there is no contractual relationship with the owner e.g. when
an engineer is hired by the architect
•A consultant who prepares specifications owes a duty of care
to bidders
•Generally, consultants hired by the owner do not have a duty
of care to the contractor, or to the contractors employees, but
if the consultant supervises the construction, such duties may
arise
(Continued)

55. 12-54
Duties of Care for Engineers
(Continued)
•Tort claims by workers against professionals are
normally barred by workers' compensation
legislation
•Third parties to the construction process may have
tort claims against consultants if the harm was
foreseeable
•Tort liability is limited by policy considerations that
limit the circumstances in which duties of care apply

56. 12-55
Pure Economic Loss
•Pure economic loss = financial loss without any
associated personal injury or damage to property
•Historically, courts in Canada have barred
negligence claims for pure economic loss because
of the large amount of liability that would result if
such claims were allowed
•Exceptions: pure economic loss can be recovered
for some torts e.g. negligent misrepresentation,
dangerous defects

57. 12-56
Reducing the Risk of
Negligence Claims
•Contractual limitation clauses can limit tort duties of
care
•Contractual limitations only apply between the
parties to the contract, but may be relevant to
whether a party to the contract owed a duty of care
to a third party e.g. if the owner's contract with the
consultant states that the consultant is not
responsible for work methods, it is less likely that
the consultant owes a duty to a person injured by
dangerous work methods

58. 12-57
Breach of Duty
•A breach of duty occurs when the standard of care
is not met
•The standard of care is defined by what a
reasonable and competent member of that
occupation would have done in the situation
•Expert evidence is used to establish the standard of
care in a particular case
•The standard of care is determined considering the
state of the art at the time of the alleged breach

59. 12-58
Breach of Duty (Continued)
•Commonly practiced norms are relevant to, but not
determinative of, the standard of care
•Professionals who hold themselves out as specialists will
be held to a higher standard of care
•Most breaches of duty occur due to lack of care, not
incompetence
•Continuing professional education programs guard
against incompetence
•Checklists and other quality control procedures should
be used to prevent lack of care

60. 12-59
Causation
•Only losses caused by the defendant's breach of
duty are recoverable i.e. losses which, but for the
breach, would not have occurred
•The loss must also be proximate to (not too remote
from) the breach
•The plaintiff must prove causation on a balance of
probabilities

61. 12-60
Negligent Misrepresentation
•Misrepresentation = false statement
•Negligent misrepresentation = a false statement made
in breach of a duty of care
•A duty of care is owed to those who it is reasonably
foreseeable will rely on the statement; but the duty is
limited by proximity
•Causation is established by proving reliance on the
misrepresentation
•Pure economic loss is recoverable for negligent
misrepresentation

62. Fraud
•Fraud is an intentional tort
•Fraud is also known as deceit
•Where there is a positive obligation to disclose
information, a fraudulent misrepresentation can
occur by omission
•Negligent statements may be made carelessly,
without an intention to deceive, but fraudulent
statements are those made intentionally, with
knowledge that they are untrue

63. Fiduciary Duty
•A fiduciary duty exists when there is a special
relationship of trust in which the party owing the duty
(the fiduciary) is required to put the interests of the
party owed the duty (the beneficiary) ahead of its
own interests
•The categories of relationship in which fiduciary
duties exist are not clearly defined, although they
often exist in particular cases e.g. doctor-patient,
lawyer-client
(Continued)

64. 12-63
Fiduciary Duty (Continued)
•The following are indicative of fiduciary
relationships:
–The fiduciary has the ability to exercise discretion
or power
–The fiduciary can unilaterally exercise that power
so as to affect the beneficiary
–The beneficiary is peculiarly vulnerable to the
power of the fiduciary
•Fiduciary relationships do not normally exist
between arm's length commercial parties

65. 12-64
Trespass
•Trespass = unauthorized entry onto the land of another
person
•Trespass like Nuisance is a strict liability tort: the plaintiff
is not required to prove intention or neglect
•Strict liability: Plaintiff need only prove defendant
entered/encroached plaintiff land without permission (no need
to prove negligence)
•Property rights extend from below the surface of the land up
into the sky above the land →use of rock anchors and tower
cranes may lead to a claim of trespass

66. 12-65
Rylands v. Fletcher
•Rylands v. Fletcher is a land-related strict liability tort
•Rylands v. Fletcher arose from a case where water
escaped onto neighboring property
•Elements of Rylands v. Fletcher
–Defendant made a non-natural use of his land
–Defendant bought something onto his land which
was likely to do mischief if it escaped
–Escape occurred
–Damages resulted to the plaintiff's property

67. 12-66
Duty to Warn
•A tort duty that obliges professionals to
warn others of impending damage to
persons or property
•Professionals are held to a high
standard, especially when there is a
danger to persons
•The duty is fulfilled by taking reasonable
steps to warn the appropriate persons of
the danger

68. 12-67
Products Liability
•The liability of the manufacturer to a consumer for a
defective product
•Used when the consumer does not have a direct
contractual relationship with the manufacturer;
which is the case for most products
•Consumers may have a cause of action for
negligent manufacture and / or duty to warn
•Learned intermediary rule: when the person
dispensing the product (e.g. a doctor) has a duty to
warn the consumer of the dangers associated with
the product

69. 1/26/2021 68
Limitation Periods, Proof
•Limitation Periods: Time period window that allows affected
party to sue for damages
•Ultimate limitation and basic limitation period
•Ultimate (Maximum time generally 10-30 yrs)
•Basic ( 1 to 2 yrs from the noticing problem/reasonably
should have noticed)
•Both conditions have to be met for claim to be successful
•It is provinces specific laws

70. 1/26/2021 69
Limitation Periods, Proof
•Proof:
•Plaintiff must prove the case against the defendant by
persuading the court on a “balance of probabilities”( In
criminal situations: It is beyond reasonable doubt)

71. 1/26/2021 70
Contracts Law ( Chapter 6-11)
•Engineers deal with contracts in some form
or other
•It is essential we understand this thoroughly

72. 1/26/2021 71
Contract -Definition
•Two or more parties entering into an
agreement which is enforceable by law
•An enforceable contract has to have five
elements …

73. 1/26/2021 72
Contracts Law….
•Binding and enforceable contracts must have five
elements
•1.An offer must be made and accepted;
•2.Mutual intent to enter into the contract;
•3.Consideration;
•4.capacity to contract;
•5.lawful purpose;

74. 1/26/2021 73
Contracts Law….
•1.An offer must be made and accepted;
•Promise made by one person to another.
•For Evidence sake it is preferable to effect
communications in writing.
•Offer has time limit for acceptance in order to be
valid
•Until accepted it is not final unless otherwise stated
•Acceptance must be clearly communicated.

75. 1/26/2021 74
Contracts Law….
•Occurs( Acceptance) when the offering
party receives the acceptance or when the
acceptance is mailed
•Revoking( Cancelling of contract) is
effective when notice is received by the
party which received the offer initially.

76. 1/26/2021 75
Contracts Law….
•Jurisdiction or Governing Law
•Law( of the place) where the contract is
accepted unless other wise agreed upon.

77. 1/26/2021 76
Contracts Law….
•2.Mutual intent to enter into the contract;
•Letter of Intent . Mutual interest in the
engagement is required.
•Letter of Intent (show of interest) forms the
basis of subsequent agreement too.
•Both parties must agree to the terms of
contract

78. 1/26/2021 77
Contracts Law….
•3.Consideration;
•Something of value exchanged by the
contracting parties.
•E.g..: Designing something for money
•Each party promises to do something

79. 1/26/2021 78
Contracts Law….
•3.Consideration;
•The reason, cause, motive or price that
causes a person to enter into a contract
•No need for consideration if the document is
sealed

80. 1/26/2021 79
Contracts Law….
•3.Consideration;
•Seal:
•Mechanical seal: like lock or mechanical seal
•Personal seal: red adhesive wafer
•Offers (tenders) are sealed
•(We are not referring to P.Eng Seal here)

81. 1/26/2021 80
Contracts Law….
•3.Consideration;
•Equitable estoppel:
•Concept where relief is available to the party, which
received gratuitous promise (promise made without
consideration) or was treated unfairly is called equitable
estoppel. Court will only exercise its discretion to apply
the concept of promissory or equitable estoppel to avoid
an obviously inequitable result.

82. 1/26/2021 81
Contracts Law….
•3.Consideration;
•Equitable estoppels:
•Issues: A party is expected to do certain things
even though there is no consideration, it is unfair to
that party.
•Courts can intervene and remedy such injustice.
These are broad aspects of Equitable estoppels

83. 1/26/2021 82
Contracts Law….
•3.Consideration;
•No consideration:
•Gratuitous promise
•A valid contract must involve a "consideration" (something of value,
such as a fee, property, etc) that induces each party to complete the
contract. A contract made without consideration, is a "gratuitous
promise.". It may be enforceable under equitable estoppels, if there
is a clear inequity.

84. 1/26/2021 83
Contracts Law….
•4.capacity to contract;
•Contract with minors by adults not
enforceable

85. 1/26/2021 84
Contracts Law….
•5.lawful purpose;
•Contract will not be enforceable if the
purpose of the contract is unlawful.
•Business must be legal for contract to be
valid

86. 1/26/2021 85
Duress and Undue influence
•Contract induced by means of intimidation, is
voidable. This is called Duress.
•Threatened or actual violence or threatened
imprisonment used as a means of persuading a
party to enter into contract.
•Undue influence -Similar to Duress but less drastic.
One party dominates the other and forces the free
will.

87. 1/26/2021 86
. Contact A, Contract B
•Contract A –Deals with tendering phase
•Contact B-The actual (construction)
contract itself.

88. 1/26/2021 87
Contract Interpretations
•Two Approaches to interpreting contracts
•Liberal Approach –takes the intent of the parties -
may lead to speculation
•Strict Approach –Precise words in agreement –
Relying on Dictionary
•It will be court’s decision what constitutes
reasonable interpretation in the circumstances

89. 1/26/2021 88
Contract Interpretations
•Rule of Contra Proferentem: Contract rule of
interpretation that underscores the
importance of clear and unambiguous
language in the drafting of contracts. If it not
clear, contact will be construed or
interpreted against the party drafted it.

90. 1/26/2021 89
Contract Interpretations ….
•Parole Evidence Rule: Contract law rule that
precludes evidence of the omitted condition
is called Parol Evidence Rule.
•Discharge by Frustration: Without default of
both parties sometimes circumstances may
change the obligation –for example, war,
earthquakes, tsunamis. Under such a
situation ,it is called discharge by frustration

91. 1/26/2021 90
Breach of Contract
If contracts are breached Liquidated damages
are possible
Duty to mitigate: party that suffers a loss
through breach of contract must take
reasonable steps to reduce the damage.
Specific performance: Court may order for
contract obligation

92. 1/26/2021
91
Damages
•Damages: Those suffered by the plaintiff as result of tort
liability or contract issues.
•Direct damages: Usually the extra cost beyond original price
•Indirect /Consequential damage: Itis also called special or
indirect damages. It is best illustrated as consequential to the breach
and might include damages for lost profits caused by a plant shut-down
resulting from a contractor failing to perform services properly and
thereby affecting the overall operation of the plant. Power line cut by
Contractor that results in the loss. Fine to owner as result of non-
compliance with environmental protection statute.
•Liquidated damages: Pre estimated damages due to breach of contract .
Party required pay prescribed damages if a certain event occurs

93. 1/26/2021 92
Employment Contracts
•All contract rules apply
•When in dispute court uses
•(1) Reasonableness approach and
•(2) Favors free trade approach; discourages
restrictive trade

94. 10-93
Tendering: Introduction
•The law of contract applies
•Large amounts of money at stake: failure to abide
by the rules of the process may result in lost
contracts for bidders & liability for buyers
•Law of mistake applies, but courts are reluctant to
allow bidders to withdraw bids
•Bid depositories resolve some of the problems
inherent in tendering

95. 10-94
Tendering: Contract Formation
•Invitation to treat = request for offers
•Call for tenders = offer to enter into a "Contract A",
which may lead to formation of "Contract B" for
construction of the project: Ontario v. Ron
Engineering, [1981] 1 S.C.R. 111
•Generally, every bidder enters into a Contract A,
but only the successful bidder enters into a
Contract B
(Continued)

96. 10-95
Tendering: Contract Formation
(Continued)

97. 10-96
Tendering: Contract Formation
(Continued)
•MJB Enterprises v. Defense Construction, [1999] 1
S.C.R. 619:
–Contract A will not form when a bid is submitted
if it is clear that the parties did not intend
Contract A to automatically come into existence
when a bid was submitted
–Buyers are not entitled to accept non-compliant
bids

98. 10-97
The Bidding Process:
Introduction
•Commonly used in many industries (Generally
referring to formal tenders –typical for projects)
•Stages: preparation of documents, invitation
extended by owner, pricing by sellers, submission,
evaluation by owner, award
•Lawsuits are often launched by disgruntled bidders
•Bid shopping: using one bid as leverage in
negotiating with another bidder

99. 10-98
The Bidding Process: Bid
Documents
•Include: drawings, specifications, conditions,
instructions to bidders, invitation to bidders
•Lawyer may provide input on the legal (non-
technical) aspects of the bid documents
•The invitation to bidders defines the terms of
Contract A, and typically contains disclaimers
(privilege clauses) to protect the buyer from claims
by bidders

100. 10-99
The Bidding Process:
Submission of Bids
•The period of time between the invitation and the
submission deadline is often short
•Generally, deadlines are strictly enforced
•Bidders must often obtain subcontract bids within
the same timeframe
•Generally, bids must comply with the invitation for
bids, or they will be rejected

101. 10-100
The Bidding Process:
Examination of Bids
•The buyer evaluates submitted bids with the
assistance of the consultant
•Alternatives can be considered only if they were
called for in the invitation
•The buyer should resist the temptation to negotiate
with any of the bidders
•All requirements set out by the tender documents
should be observed

102. 10-101
The Bidding Process: Contract
Award
•When a bid is accepted, a number of rights and obligations
crystallize for the buyer, the successful bidder, suppliers &
sureties
•To avoid liability, the buyer and the contractor should strictly
adhere to the terms of the invitation for tender
•The buyer should not decline to award the contract at all, and
then re-tender a substantially similar project soon after
•Tenders have clause “lowest or any bid not necessarily
accepted” . Justification required if this clause is applied

103. 10-102
The Bidding Process: The
Consultant's Role
•Consultants are at risk of liability:
–to the owner for failing to give proper advice
during the contract award stage
–to unsuccessful bidders for acting in bad faith
when advising the buyer as to which bid should
be accepted
•It is usually a valid defense for the consultant to
have acted in good faith, without malice or
negligence

104. 10-103
Bid Shopping
•Bid shopping is using the price of one party
to negotiate a lower price from another party
•Bid shopping is Unethical and illegal
•To succeed, a claim of bid shopping must
be based on a recognized cause of action
e.g. breach of contract, promissory
estoppel, unjust enrichment

105. 14-104
Practical Law of Architecture,
Engineering, and Geoscience
Chapter 14
Dispute Resolution and Expert
Evidence

106. 14-105
Overview
•Four primary methods of dispute resolution:
litigation, arbitration, mediation, negotiation
•What process is appropriate depends on the nature
of the dispute and the attitudes and relationship of
the parties
•Negotiation, mediation and arbitration may be
voluntary, but litigation is only voluntary for the
plaintiff

107. 14-106
Litigation
•Litigation = Use of the court system to resolve
disputes
•An independent party (judge or jury) decides the
case on the evidence presented at trial
•The judge controls the process
•Litigation is often the only alternative for dealing
with unreasonable or vexatious parties
(Continued)

108. 14-107
Litigation (Continued)
•Litigation is slow and expensive
"If you want my advice, try to order your life so
you never see the inside of a courtroom. It's a
very expensive place to visit"
Mary Southin J.A., on the eve of her retirement
from the British Columbia Court of Appeal,
reported in the Vancouver Sun, October 13,
2006.
•There may be many defendants in a single lawsuit

109. 14-108
Pleadings
•The pleadings are documents filed in court in a
lawsuit or included in a trial record
•The pleadings define the issues to be litigated
•Writ = Document that initiates the lawsuit. It is filed
by the plaintiff and served on the defendant
•Statement of claim = Document that sets out the
plaintiff's claim in detail
•Statement of defense = Document that sets out the
defendant's response to the plaintiff's claim
(Continued)

110. 14-109
Pleadings (Continued)
•The statement of claim must set out each element
of the cause of action, and the remedy the plaintiff
is seeking, or else the claim will be struck
•The statement of defense must deny the allegations
made in the statement of claim, or else those
allegations will be deemed to be admitted
•A lawyer should be hired to draft pleadings.

111. 14-110
Counterclaims and Third Party
Claims
•Counterclaim = A claim that a defendant asserts
against the plaintiff; the value of the counterclaim
may exceed the value of the claim
•Third party claim = A claim made by a defendant
against a third party (not the plaintiff or another
named defendant)
•Deciding whether to counterclaim, or to make a
third party claim, involves strategic considerations:
the plaintiff and the third party may team up against
the defendant and the defendant may be liable for
their costs

112. 14-111
Litigation Costs
•Litigation is expensive
•Generally, the party that loses the case is required
to compensate the winning party for their costs
•Costs are payable according to rates defined by
legislation or regulations
•The costs payable are generally only about a third
of the actual costs of the litigating the case
•The risk of being ordered to pay costs may
dissuade a defendant from filing a third party claim

113. 14-112
Discovery
•Discovery = Information gathering procedures
available to all parties prior to trial
•Discovery is designed to eliminate surprise at trial
•Examination for discovery = Oral cross-examination
of the opposing party
•Interrogatories = Written questions answered by the
opposing party
•Discovery of Documents = Disclosure of documents
relevant to the litigation

114. 14-113
Technical Evidence
•Technical evidence is required in many construction
law cases
•Generally, each party will hire experts to explain
technical evidence to the court and to provide
technical opinions that are supportive of their case
•The experts do not decide the case, the judge or
jury decides the case using the guidance provided
by the expert evidence

115. 14-114
Drawbacks of Litigation
•Risky: generally an all or nothing outcome
•Uncertain: it is often difficult to predict what the
outcome will be
•Expensive
•Time consuming
•Emotionally taxing
•Unlike negotiation or mediation, with litigation the
parties lose control over the process and the
outcome

116. 14-115
Arbitration
•A private trial process in which the parties set the
rules
•Proponents of arbitration argue that it is less
expensive than litigation, but this is not always the
case, especially if the parties are not cooperative
•Mandatory binding arbitration: when the parties
agree by contract, before any dispute arises, that
they will arbitrate disputes that do arise
(Continued)

117. 14-116
Arbitration (Continued)
•Voluntary binding arbitration: when the parties agree to
arbitrate after a dispute has arisen
•Non-binding arbitration: arbitrator gives advisory opinion
only and does not make a final ruling
•Before arbitration starts, the parties must decide:
–who will act as arbitrator
–the terms of reference
–the rules of procedure to be applied
–the law to be applied e.g. Alberta Law, English Law
(Continued)

118. 14-117
Arbitration (Continued)
•If the parties cannot agree on an arbitrator, the
court can appoint one
•Advantages:
–Privacy
–An arbitrator with specialized knowledge can be
selected
•Disadvantages:
–Split proceedings result if not all the parties
agree to arbitrate
–The arbitrator must be paid, and their schedule
accommodated

119. 14-118
Negotiation
•Negotiation = Discussion to resolve the dispute through
compromise
•Negotiation is a skill, best learned through practice
•Advantages:
–The parties control the process; so it can be private
–The parties control the outcome; eliminates
uncertainty
–Often less costly than litigation
•Negotiations are privileged: the matters discussed during
negotiations cannot be referred to in subsequent court
proceedings if the negotiations fail

120. 14-119
Mediation
•Assisted negotiation; a third party facilitates
settlement by encouraging compromise
•Like negotiation, mediation requires the parties to be
committed to settlement
•Procedure: opening statements, discussion, break-
out sessions where the mediator meets with the
parties individually, more discussion etc.
•The task of the mediator is to help the parties to be
objective and keep the process moving forward
•Like negotiation, if no settlement is reached, the
communications are privileged

121. 14-120
Other Dispute Resolution
Methods
•Mini-trial = The parties summarize their case and
the judge gives a non-binding opinion
•Settlement conference = Informal meeting in which
the judge facilitates settlement
•Variations on the methods discussed are used:
–Binding mediation (mediation / arbitration)
–Court appointed referees
–Partnering

122. 14-121
Expert Witnesses
•Expert = Person with skill, expertise, training and
experience who helps the decision maker on
technical matters
•Experts are allowed to provide opinions
•When professionals act as experts, they have a duty
to be fair and neutral, rather than advocate for the
party that hired them
•The entire expert's file, including the fee
arrangements, must be disclosed

123. 1/26/2021 122
Lien Legislation
•Lien Rights: It is to protect the interest of
subcontractors who do the work for the main
contractor.
•Certain amount is held back from a
contractors invoice for a specified period .
This hold back will be published in daily
paper . If no subcontractor claims ( that they
weren’t paid) the holdback will be released.

124. 1/26/2021 123
Lien Legislation
•Lien Rights: Hold back from contractor until
a specified time
•Certain percentage is held back . Basic and
finishing work.
•Provincial legislation has lien provisions
•Certificate of substantial performance

125. 1/26/2021 124
Intellectual property
Patents
Trade marks
Copy right
Designs
Trade secrets.

126. 9 -125
Copyright, Patents,
Trademarks, and Designs
•Known by the term “intellectual property”
–valuable and may be bought, sold, or licensed as any
other property
–one key difference: ownership period is limited,and at the
end of that period, the intellectual property becomes public
domain
•Canadian Intellectual Property Office (CIPO) manages
intellectual property
•In the United States, the Patent and Trademark Office (PTO)
manages a database of intellectual property

127. 9 -126
Importance of Intellectual
Property
•Basic principle is to encourage creativity
•Knowledge of intellectual property law is essential because:
–Professional engineers and geoscientists must be able to
protect intellectual property that they create
–Everyone must respect the rights of others
•Intellectual property is a huge warehouse of ideas, technical
knowledge, designs, and inventions

128. 9 -127
Protection for Intellectual Property

129. 9 -128
Copyright (right to copy)
•Copyright law enables owners to protect written and aesthetic works
•Canada’s Copyright Act
–Only owner of work has right to “copy” work
–Creative works are protected for life of owner plus 50 years
beyond death
–Other works are protected 50 years( e.g. Sound Recordings-
More details in Guide to copy right hand out)
•Creator has copyright protection immediately and automatically upon
creation of the work
•Copying, plagiarism, software piracy, downloading are typical forms
of infringement

130. 9 -129
Patents
•An invention must be new, useful, and innovative to receive a
patent
•Patent Act
–owner of a patent has the right to make, use, or sell the
invention for a period of 20 years from the date of patent
application
•Patent owner can prevent others from making, using, or
selling the invention, and may enforce this right in court
continued…

131. 9 -130
Patents
•Obtaining a patent
–long process that begins with patent application
–four parts of patent are:
•Abstract
•Specification –answers four questions:
–What problem does the invention solve?
–What prior art exists, and why is it inadequate to solve the
problem?
–How does the invention work?
–How is the invention new, useful, or ingenious, compared to
prior art?
•Claims
•Drawings

132. 9 -131
Industrial Design
•Protected through process similar to patent or copyright protection
•Only aesthetic appearance is protected
•Industrial Design Act
–Only owner of a registered industrial design has right to make,
use, sell, or rent the design.
–Designs not registered have no legal protection against imitations
•Obtaining industrial design protection
–requires an application and at least one drawing or photograph of
the design

133. 9 -132
Integrated Circuits
•Basis of almost all modern communication devices, computers, and
similar electronic equipment
•Integrated Circuit Topography Act
–Only owner may make, use, or sell the registered topography
–Registration provides legal protection for 10 years
•Obtaining protection
–integrated circuits can be registered by submitting an application,
fees, description of the function of the circuit, drawings

134. 9 -133
Trademarks
•Commonly used logos, names, symbols, or designs that
identify a company’s goods or services in the marketplace
•Trademark Act
•registration gives the right to use the trademark for 15
years
•can be renewed indefinitely
•Obtaining trademark protection
–Owner may warn copiers using letter “R” (registered) in a
circle or “MD” (marque déposée)

135. 27-134
Practical Law of Architecture,
Engineering, and Geoscience
Chapter 27
Internet Law

136. 27-135
Overview
•The law has adapted pre-existing concepts to apply to
the internet
•A challenge for internet law is that it deals with a
medium that transcends national & international borders
•Regulation of the internet is practically impossible
•Federal and provincial laws have been developed to
deal with issues such as electronic commerce,
electronic evidence, consumer protection and trademark
infringement
•Proper contracts and insurance can reduce the legal
and business risks associated with the internet

137. 27-136
Jurisdiction
•When parties to an internet contract are in different
jurisdictions, it is unclear in which jurisdictions
courts should have authority (jurisdiction) over the
dispute, and in which jurisdictions laws should be
applied in resolving the dispute
•Some courts, especially those in the United States,
will take jurisdiction over a dispute involving
residents in their jurisdiction regardless of whether
proceedings are already underway elsewhere, or
whether the parties contractually agreed to litigate
in another jurisdiction

138. 27-137
Torts
•Torts such as defamation and misrepresentation
can occur over the internet
•Defamation = Communication that injures another
party's reputation in the community
•Communication on websites is treated much the
same as communication over radio or television
•False statements on the internet may lead to a
claim for misrepresentation just as they could if the
statements were made using any other medium

139. 27-138
Copyright
•The ease with which information can be copied and
distributed over the internet threatens the interests
of copyright holders
•ISPs are generally only liable for copyright
infringement if they actively participate in the
infringement; merely providing a forum that allows
others to infringe does not attract liability
•Copyright holders whose rights are infringed must
prove, in court, that their work was illegally copied

140. 27-139
Trademarks
•The internet poses risks and challenges respecting
the use and protection of trademarks
•Trademarks must be enforced to maintain
protection; it is difficult to police for infringement on
the internet
•Domain names are subject to trademark laws
•Courts have held that "cybersquatting" infringes
trademark rights and also constitutes
misrepresentation

141. 27-140
Regulation of the Internet
•Privacy legislation such as PIPEDA applies
to the internet like it does in other contexts;
this is important for e-commerce where
large amounts of personal information is
collected and transmitted
•Securities legislation also applies to the
internet like it does in other contexts

142. 27-141
Electronic Contracts
•The traditional contract principles apply to the
formation of electronic contracts, but are sometimes
difficult to adapt to the internet context
•The Uniform Electronic Commerce Actis model
electronic contract legislation which individual
legislatures are free to adopt, with amendments as
they choose
•Electronic contract legislation provides certainty
regarding the rules for formation, performance, and
enforcement of electronic contracts
(Continued)

143. 27-142
Electronic Contracts
(Continued)
•Clicking "I agree" on the internet often results in a
valid and enforceable contract being formed
•The parties to internet contracts are free to set their
own rules for the timing of formation of their
electronic contracts
•As with all contracts, particularly onerous terms
must be bought to the attention of party who will be
bound by them
•Online contracting parties should verify the identity,
capacity, and authority of those they contract with

144. 27-143
Communications System Risk
Management
•Modern communication systems present significant
business and legal risks
•To address these risks, organizations should
formulate and implement a written communication
systems policy (CSP)
•The CSP should educate employees, contractors,
and other systems users about the risks and
liabilities associated with communications
technology

145. 22-144
Practical Law of Architecture,
Engineering, and Geoscience
Chapter 22
Health and Safety Law

146. 22-145
Overview
•Health and safety law is made up of common law tort
principles in combination with provincial and federal
legislation
•Occupational health and safety (OH&S) legislation is
designed to protect workers from injury and to
compensate those that are injured
•In exchange for compensation under OH&S
legislation, workers give up their right to sue their
employers for personal injury
(Continued)

147. 22-146
Overview (Continued)
•OH&S legislation is based on three fundamental
rights of workers:
–the right to be informed of hazards;
–the right to participate in accident prevention;
and
–the right to refuse to do dangerous work
•OH&S regulations are enforced by site visits by
government enforcement officials

148. 22-147
Contracts
•Contracts may deal with specific safety issues and
designate particular parties responsible for particular
safety obligations
•Under construction contracts, contractors often
indemnify the owner against claims for personal
injury on site
•A single party must be responsible for safety at any
time, but the designated party may change as the
project progresses
•If there is any doubt as to who is the responsible
party, responsibility reverts back to the owner

149. 22-148
Torts and Workers' Compensation
Board (WCB) Legislation
•WCB legislation provides workers with no-fault
compensation for workplace injuries
•All employers are required to make WCB
contributions to fund the scheme; in exchange
employers are protected against being sued by
injured workers
•Employers may still be sued by injured persons
who are not employees

150. 1-149
International Law
•International treaties; must be ratified
•NAFTA
•Regardless of treaties, professionals
such as engineers must be licensed in
each jurisdiction in which they work
•Tax treaties: minimize double taxation

151. 10-150
International and Interprovincial
Trade Agreements
•Set rules for the transfer of goods and services
•May influence procurement and dispute resolution
processes.
•International agreements: NAFTA, WTO; Take
precedence over domestic law
•Interprovincial agreement: Agreement on Internal Trade
(AIT)
•Treaties have criteria for determining which transactions
they cover

152. 22-151
Occupational Health and
Safety
•OH&S legislation may be combined with WCB
legislation, but is often separate
•OH&S legislation improves working conditions
through mandatory safety requirements,
enforceable by fines imposed on employers and
their officers and directors
•When accidents do occur, employers are required
to follow strict documentary procedures

153. 22-152
Ethical Considerations
•Architects, engineers and geoscientists are
often required to monitor safety concerns
•Regardless of pressure from clients and
contractors to take a relaxed approach to
safety measures which cost time and
money, professionals must firmly adhere to
the safety standards set by regulation and
remember that their primary ethical
obligation is to protect public safety

154. Practical Law of
Architecture, Engineering,
and Geoscience
Chapter 16
Insurance

155. Overview
•Insurance policies are contracts of indemnity
•Principles of contract law apply
•The insured has special duties to not compromise the rights
of the insurer
•Liability insurance protects against claims by third parties
•Property insurance protects against loss or damage to
property
•Deductible = Portion of the claim that the insured must pay
(Continued)

156. Overview (Continued)
•Coverage period = Period of time the insurance policy covers
•Limitation periods:
–Statutory →Period of time within which the claim must
be bought
–Contractual →Period of time within which the insurer
must be notified of the claim
•Insured party must have an insurable interest

157. Operating Without Insurance
•Insurance spreads risk
•Operating without insurance is risky: a single claim could
bankrupt a business
•Even very competent professionals should have insurance;
defending frivolous claims is expensive & insurance covers
the costs of litigation
•Insurance may be prohibitively expensive; or even
impossible to obtain
•Professionals, even if operating through a corporation, can
be sued in their personal capacity

158. The Duty to Defend
•Duty to defend = Duty to pay for and present a legal defence
to third party claims under liability policies
•Duty to indemnify = Duty to pay out successful third party
claims
•The duty to defend is broader than the duty to indemnify; the
insurer must defend even frivolous claims
•If all allegations are outside the scope of coverage, the
insurer will not be required to defend the claim

159. Subrogation
•Subrogation = The right of the insurer to step into the shoes
of the insured and take any remedies against third parties
that the insured would have been entitled to take
•Used in liability and property insurance policies; after the
insurer has paid out the insured, on behalf of the insured,
and then goes after other parties that contributed to the loss
•The insured must not compromise the insurer's rights under
the subrogation clause, or coverage may be lost
(Continued)

160. Subrogation (Continued)
•Occasionally, insurance contracts have a
waiver of subrogation clause
•Subrogation cannot be obtained against an
insured
•If all project participants are named as
insureds on a single policy, the issue of
subrogation is eliminated

161. Insurable Interest
•A prerequisite for property insurance is that the
insured have an insurable interest in the property
covered by the policy: the insured must benefit
from the existence of, or would be prejudiced by
the loss of, the insured property
•Allowing insurance without an insurable interest,
would allow wagering on other people's misfortune
•If assets are transferred from a sole proprietor to a
corporation, the corporation should become the
named insured on the policy

162. Claims-Made and Occurrence
Policies
•Claims-made policy →Covers claims made
during the policy period, regardless of when
the work was done
•Occurrence policy →Covers claims relating to
work done during the policy period, regardless
of when the claim is made
•Most professional liability policies are claims-
made policies
(Continued)

163. Claims-Made and Occurrence
Policies (Continued)
•Insureds must notify the insurer as soon as they become
aware that a claim maybe made
•If an insurer on a claims-made policy does not receive
notice within the policy period, the claim will not be
covered under that policy
•Care must be taken when changing from a claims-made
policy to an occurrence policy to ensure that there is no
gap in coverage
•If an insured has had claims-made policies, these should
be extended into retirement

164. Material Non-Disclosure and
Prejudice to Third Parties
•Insureds are under a duty of good faith to
disclose all material information when taking
out insurance policies
•Material information is that which would affect:
–the decision to provide coverage; or
–the premium that would be charged
•Non-disclosure, even if unrelated to the loss,
may result in coverage being denied
(Continued)

165. Material Non-Disclosure and
Prejudice to Third Parties
(Continued)
•Where there are many named insureds:
–Material non-disclosure by the party who took out the
coverage will threaten coverage for all
–The designated party failing to pay the premiums will
threaten coverage for all
•Where the premiums are to be paid by a designated insured,
the policy should require the insurer to notify all insureds of
non-payment before terminating coverage

166. Cooperation and Conflict Between
Insurer and Insured
•The insured has a duty to cooperate with the insurer in
defending claims e.g. provide information and documents,
testify at trial
•The duty to cooperate includes not prejudicing the rights of
the insured e.g. by admitting liability
•Breach of the duty to cooperate may result in loss of
coverage
•Conflict of interest = When the insurer and the insured have
incompatible interests
(Continued)

167. Cooperation and Conflict Between
Insurer and Insured (Continued)
•Situations in which conflicts of interest may arise
–Denial of coverage
–Claims alleging conduct outside the scope of insurance
–The decision to settle, particularly when the claim
exceeds the coverage limit, or the offer requires
compromise of a counterclaim e.g. a claim for fees
•When conflicts arise, the insurer may be required to cover
the cost of separate counsel for the insured
•Insureds will be personally liable for the portion of the claim
exceeding the policy limits

168. Builders' Risk Policies
•Builders' risk policies are contracts of property insurance
•Specified perils policy = Only covers the specified perils
•All risk policy = Covers all perils apart from those
specifically excluded
•Specified peril policies are more common for property
insurance, but builders' risk policies are typically all risk
policies
(Continued)

169. Builders' Risk Policies
(Continued)
•The purpose of builders' risk policies is to allow the
owner to proceed with the project despite
occurrence of loss or damage during construction
•Builders' risk policies are designed to deal with
accidents, and so typically exclude losses for faulty
design, materials, and workmanship
•The particular wording of each policy should be
considered (Continued)

170. Builders' Risk Policies
(Continued)

171. Builders' Risk Policies
(Continued)
•In deciding whether construction methods are
included within "faulty design", courts have
reached inconsistent conclusions
•Some courts have held that because the structure
failed, the design must have been "faulty" despite
there being no negligence on the part of anyone;
this overlooks the fact that structures are not
designed to withstand the largest possible forces
e.g. wind, earthquake
•Even if damage is excluded by the faulty design
exclusion, resultant damage may be covered

172. Commercial General Liability
(CGL) Policies
•CGL policies are liability policies that cover
claims for bodily injury and property damage
•Contractors usually purchase CGL policies to
guard against property damage and injury
claims by third parties
•CGL polices typically exclude coverage for
damage to the insured's own property and for
poor quality work product e.g. if a bridge was
defective and fell down, the CGL policy would
cover the injury of a person on the bridge, but
not the cost of replacing the bridge

173. Wrap-up Policies
•Liability insurance policy that covers all
direct participants in a construction
project
•Wrap-up policies typically run from the
end of the project until a specified time
afterwards e.g. the end of the warranty
period

174. Errors and Omissions
Insurance
•Liability insurance for professionals
•Covers claims made by third parties for loss or damage
caused by the negligence of the insured
•Are typically claims-made policies
•Insurance is mandatory for certain professionals in some
provinces
•Errors and Omissions polices typically exclude losses arising
from: late delivery of drawings, design work done as part of a
joint venture, mould, water ingress

175. Practical Law of
Architecture, Engineering,
and Geoscience
Chapter 17
Bonds

176. Overview
•A bond is an agreement whereby the "surety" guarantees
that the "principal" will perform its obligations to the "obligee"
•Bonds are governed by the rules of contract law, and are
similar in some ways to contracts of insurance, though they
are not insurance
•An owner may require a construction contractor to provide a
bond to provide certainty that the contract will be performed
•Improper conduct by the obligee may relieve the surety from
its obligation to guarantee performance

177. Roles and Responsibilities in
Bonds
•The role of the surety is to guarantee
performance for the benefit of the obligee
•There are two separate contracts
–Between the principal and the obligee →
primary obligations
–Between the surety and the principal →
secondary obligations; depend on the
existence of primary obligations
(Continued)

178. Roles and Responsibilities in
Bonds (Continued)
•If the principal fails to perform, the obligee will have
contractual remedies against the surety and against the
principal
•The principal pays the surety a premium, much like an
insurance premium
•The surety will typically require the shareholders of the
principal to indemnify the surety against any loss
•Contracts of surety must be in writing
•To enforce the bond, the obligee must have the originalbond
document in their possession

179. Indemnity and Other Surety
Recourses
•If the surety is required to pay out under the bond, it will
have a right of subrogation against the principal →this is
the key distinction from insurance contracts, where
subrogation cannot be obtained against an insured
•The right of subrogation under surety agreements exists
at common law
•The right of subrogation is only useful if the principal, or its
shareholders if guarantees were given, are solvent

180. Bid Bonds
•Bid bonds provide the owner with an immediate
remedy if a bidder's bid is accepted and the bidder
refuses to enter into a contract i.e. the surety will
be required to pay the owner the amount specified
in the bond
•Calls for bids often require that bid bonds be
provided when bids are submitted
•Depending on the terms of the call for tenders, and
the terms of the bid bond, the contractor's liability
for refusing to contract with the owner may be
limited to the amount of the bid bond(Continued)

181. Bid Bonds (Continued)
•The surety will always be in at least as strong
a position as the principal; the surety will be
able to rely on all defences the principal would
have against the obligee, and may have
additional defences under the bid bond e.g.
shorter limitation periods
•Contractors should take claims against the bid
bond seriously; sureties typically pursue all
their remedies to recover from indemnitors

182. Performance Bonds
•Under a performance bond, the surety guarantees
that the principal will perform its obligations
•Often used to guarantee performance under
construction contracts
•In the construction industry, performance bonds
are normally written in an amount equal to 50
percent of the value of the contract
•The contract between the principal and the obligee
is typically incorporated into the performance bond
by reference
(Continued)

183. Performance Bonds
(Continued)

184. Performance Bonds
(Continued)
•Subcontractors may provide performance bonds
to prime contractors
•As under bid bonds, under performance bonds
the surety only responds once the principal has
defaulted in its obligations to the obligee
•Once default by the principal is alleged, the
surety has many options including paying out the
face value of the bond, completing the contract,
or asserting a defence and refusing to do
anything (Continued)

185. Performance Bonds
(Continued)
•If the surety admits that the principal defaulted, the
decision to pay out the bond or complete
construction will depend on the expected cost to
complete
•If the surety opts to complete the contract itself, it
will be required to do so even if the actual cost to
complete ends up exceeding the face value of the
bond
•Depending on the wording of the bond, if the surety
solicits bids for others to complete the contract, its
liability may be limited to the face value of the bond
(Continued)

186. Performance Bonds
(Continued)
•The surety will be in a difficult position if it is not
clear that the principal defaulted:
–If the principal is not at fault the surety may
have no remedy against either the principal or
the obligee
–If the principal is at fault, and the surety delays
performance, it may be liable for additional
losses resulting from the delay
•Whether the principal was at fault would not be
known for certain until, if ever,a court rules on it

187. Defences Under a Performance
Bond
•As for bid bonds, the surety can rely on any defence the
principal would have against the obligee
•The surety may escape its obligation to pay on the basis that:
–The obligee has not performed all of its obligations
–The obligee failed to give the surety adequate notice of
the claim against the principal
–The risk the surety is exposed to changes e.g. by the
principal and obligee agreeing to increase the scope of
work
–The obligee overpaying the principal for work done; this
also increases the risk the surety is exposed to

188. Payment Bonds
•Payment bonds guarantee payment obligations
•Payment bonds are used when there is
concern that payment may not be made for
properly completed work
•The owner may require the prime contractor to
provide a payment bond (called a "labour and
material payment bond") to ensure payment to
the subcontractors; this reduces the risk that
liens will be filed against the owner's property
(Continued)

189. Payment Bonds (Continued)
•Where the financial strength of the owner is in
question, the contractor may request the owner
to provide a payment bond
•Payment bonds create a trust relationship: the
claimants under the bond are the beneficiaries
of the trust and the bond money may only be
used to pay the claimants
•Payment bonds may be one or two tier
•The surety's liability is limited to the face value
of the bond

190. Practical Law of
Architecture, Engineering,
and Geoscience
Chapter 23
Environmental Law & Ethics ( Ethics
part is included from Ethics section)

191. Overview
•Modern environmental law is mix of common law
and statutory regulation
•The principles of trespass, nuisance, negligence,
misrepresentation, and strict liability are commonly
used in environmental claims
•A broad range of provincial and federal statutes
create funds to clean up environmental
contamination and impose criminal and quasi-
criminal penalties for environmental breaches
(Continued)

192. Overview (Continued)
•Environmental contamination is usually
discovered and remediated through a three
stage environmental site assessment (ESA)
•Environmental audits are distinct from ESAs,
and assess corporate environmental liability
•Environmental legislation contains proactive
measures to prevent future contamination and
aims to balance the need for environmental
protection with the desire for economic
development

193. Environmental Site Assessments
(ESAs)
•ESAs are normally done according to guidelines
set by the Canadian Standards Association
•Environmental consultants owe a duty of
confidentiality to their clients, although this duty
may be trumped by a legislative requirement to
disclose environmental hazards to regulatory
authorities
•If an environmental report is requested for a client
by a lawyer, the report may be privileged even with
respect to the regulatory authorities
(Continued)

194. Environmental Site Assessments
(Continued)
•ESAs are divided into three stages:
1.Information gathering
2.Site investigation and assessment of
contamination
3.Detailed description of contamination and
formulation of remediation options
•Surrounding properties are often included in
ESAs because pollution often migrates

195. Environmental Audits
•Audits involve objectively assessing environmental
contamination, compliance, and risks
•Audits may be statutorily required, but may also be done to:
–provide defences against environmental claims or
prosecutions
–protect the health and welfare of employees
–reduce remediation expenses
–ensure the marketability of property
•The Canadian Standards Association sets guidelines for
environmental audits

196. Remedies for Private
Landowners
•Current landowners may be liable to remediate
contamination that occurred before they acquired
the property
•It is advisable to have an ESA done before
purchasing property
•Vendors have an obligation to disclose latent
defects, including hidden contamination
•The likelihood of success for claims against
previous owners and realtors depends on what
knowledge those parties had of the contamination
(Continued)

197. Remedies for Private Landowners
(Continued)
•Property owners are liable for contamination that
migrates from their property on to neighboring
property
•Migrating contaminants may give rise to claims in
trespass, nuisance, negligence, and strict liability
e.g. Rylands v. Fletcher
•Property owners may also be able to make claims
under environmental statutes

198. Government Regulation
•Governments seek to:
–Have private parties bear the cost of environmental
cleanup
–Protect the environment from future contamination
•These goals are achieved through a complicated web
of statutes and regulations
•Where there is a direct operational conflict between
provincial and federal legislation, the federal legislation
prevails
(Continued)

199. Government Regulation
(Continued)
•The provincial and federal governments regulate aspects of
the environment that are related to their respective heads of
power under the Constitution
•The following elements are common to most environmental
legislation:
–Regulation of harmful conduct
–Administrative systems to prevent, and clean up,
pollution
–Mandatory reporting requirements
–Requirements to undergo environmental assessments
–Establishment of offences

200. Environmental Offences
•The federal and provincial statutes combined
create a large number of environmental offences
•The offences cover a variety of behaviour including
discharging contaminants, failing to report, failing
to keep proper records, failing to assist in
investigations
•Both corporations and their employees may be
liable to prosecution, and imprisonment is possible
for serious offences
•Most offences are strict liability: the only defence is
for the defendant to show that it was duly diligent

201. Environmental Cleanup
•General principle: Polluter pays
•However, many parties other than the polluter may
be liable if the polluter is unable to pay; it is
advisable to obtain an ESA before purchasing
property
•Environmental regulations often become stricter
over time; cleaning up contamination to comply
with the minimum standards of today may not be
good enough for tomorrow

202. The Environmental Assessment
(EA) Process
•EAs may be required for new projects, or for
modifications to existing projects
•An EA involves an assessment of the
environmental impact the project will have
•Depending on the nature of the project and the
sensitivity of the location, one of four levels of
EA will be appropriate:
–screening
–comprehensive study
–mediation
–panel review

203. 15 -202
Environmental Ethics
•Environment is a public resource
•Protecting environment is everyone’s duty
•Professional engineers and geoscientists have a special
responsibility because their decisions sometimes can
cause great harm
•Professionals must avoid unsafe, unethical, or illegal
environmental practices
•May be forced to report unethical practices to the
appropriate authorities

204. 15 -203
The Duty to Society
•Requires “reasonable care”
•In environmental terms, reasonable care, prudence,
and scientific knowledge:
–Knowledge of environmental law
•seek advice before taking any action that might contravene
an environmental law, regulation, or bylaw
•compliance with environmental law
–Adequate technical knowledge
•before releasing any substance into the environment, must
have knowledge of effects of the release, even when
substances are not toxic
…CONTINUED

205. 15 -204
The Duty to Society
–High ethical standards
•Essential
•Engineers and geoscientists must follow their
Codes of Ethics as well as the environmental
guidelines

206. 15 -205
The Duty to the Employer
•Employees have an obligation to employer
•In rare cases, employer may instruct an
employee to carry out acts contrary to
welfare of society
•Professionals must refuse to carry out such
unethical activities
…CONTINUED

207. 15 -206
Illegal Actions
•Professional engineer or geoscientist must refuse to
perform any illegal activity
•Must take action if other employees are observed in
illegal activities
•By participating in (or merely by ignoring) illegal acts,
the professional employee becomes liable for
penalties prescribed by the law
•May face disciplinary action by provincial Association
•In extreme cases, it may be appropriate to report the
illegal acts

208. 15 -207
Actions Contrary to Code of Ethics
or Environmental Guidelines
•Professional engineer or geoscientist must refuse to
carry out any activity that is a breach of the
Association’s Code of Ethics or the environmental
guidelines
•If the employer is an engineer or geoscientist, he or she
has a similar obligation to obey the code
•Employee has legal basis for insisting on ethical
behavior
•Employer cannot direct professional to take an action
that would result in loss of licence

209. 15 -208
Actions Contrary to Conscience of
Employee
•Conscience and refusing to follow employer’s
directive may result in disciplinary action or
dismissal
•Must carefully consider possibility of dismissal,
the consequences of unemployment, and the
remedies for wrongful dismissal
…CONTINUED

210. 15 -209
Canadian Environmental Law
•Federal, provincial, and territorial governments
(and many municipalities) have environmental
laws and regulations that regulate engineering
or Geoscience activities
…CONTINUED

211. 15 -210
Canadian Environmental Law
•Federal laws:
–Canadian Environmental Protection Act
•main federal law regulating the environment
–Fisheries Act
•protects the environment, and forbids activities that might
degrade any fish habitat
–Canadian Environmental Assessment Act
•goal is to encourage sustainable development
…CONTINUED

212. 15 -211
•Professional must:
–find and comply with the appropriate regulations
for the professional’s discipline
–apply professional and responsible judgment
–call for specialist guidance when it is needed
–disclose information when necessary, to protect
public safety
Implementing the Guidelines

213. 15 -212
Environmental Guidelines for
Corporations: Ceres
•The Ceres Principles
–environmental principles for corporations
–developed by the Coalition for Environmentally Responsible
Economies (Ceres), an American coalition of institutions
–developed after Exxon Valdez oil spill
–10-point code of corporate environmental conduct
•includes protection of the biosphere; sustainable use of
natural resources; reduction and disposal of wastes; energy
conservation; environmental risk reduction; safe products
and services; environmental restoration; informing the
public; management commitment to environmental issues,
and regular audits and reports
…CONTINUED

214. 15 -213
Environmental Guidelines for Corporations:
Registration under ISO 14001
•Registration under ISO 14000 series of Environmental
Management System Standards
•Registration requires:
–Commitment from senior management
–Review of all applicable environmental laws
–Audit of environmental impact of corporation’s operations
–Development of environmental policies
–Establishment of measurement techniques and methods for recording
measurements
–Preparation of a procedures manual to define who does what
–Training of employees
–Full communication within the corporation
–Regular audits to ensure that the system is working and achieving its goals

215. 1/26/2021 214
ETHICS-Professional
Practice

216. 1/26/2021 215
What is A Profession?
Profession: A profession is defined as a self-
selected, self-disciplined group of
individuals who hold themselves out to the
public as possessing a special skill derived
from training and education and are
prepared to exercise that skill in the interest
of others.

217. 1/26/2021 216
Aspects of Professionalism
•Public obligation is paramount
•Acceptable standards of conduct and
competence
•Intellectual rather than manual
•Trust worthy while practicing the profession

218. 1/26/2021 217
What is a Professional
Engineer?
•
"practice of professional engineering"means
any act of planning, designing, composing,
measuring, evaluating, inspecting, advising,
reporting, directing or supervising, or managing
any of the foregoing, that requires the application
of engineering principles and that concerns the
safeguarding of life, health, property, economic
interests, the public interest or the environment;
•"professional engineer"means any natural
person who holds a valid certificate of registration
or temporary licence entitling him or her to practice
as a professional engineer;

219. 2-218
Evolution of Engineering Licensing
•Campaign to regulate profession began in 1887 with
first meeting of CSCE (Civil)
•Became Engineering Institute of Canada (EIC) in 1918
•Most provinces passed licensing laws (“open” or
voluntary) 1918-1920
•Laws were “closed” (license needed to practice
engineering or use term Professional Engineer) by 1955

220. 2-219
Evolution of Geoscience
Licensing
•The licensing of professional geoscientists
has followed roughly the same path as that
of professional engineers.
•Work of many geoscientists also affected
the public through their involvement in:
–oil, gas and ore exploration and mining
activities
–construction of major engineering works
such as dams and bridges
–the broad area of environmental practice
CONTINUED…

221. 2-220
Evolution of Engineering and
Geoscience Licensing
•Geoscientists:
–were initially licensed as engineers, usually as
mining engineers
–were explicitly identified in the Engineering Act in
Alberta in 1955
–are licensed in most Canadian provinces and
territories by associations of engineers and
geoscientists

222. 2-221
Self-Regulating Professions
•Engineering and Geoscience are self-
regulating professions in Canada.
•A self-regulating profession is defined as a:
Self-selectedandself-disciplinedgroup
whichhavespecialskillsderivedfrom
educationandtrainingandexercisethese
skillsintheinterestofothers.

223. 2-222
Different Models of Licensing
•It is different in other countries (for example,
government-regulated or not licensed)
–In the United States, it is government-
regulated and licensing confers only the
right to the title
•Canadian license confers the right to
practice as well as the right to the title

224. 2-223
Qualified Person
•Term now appears in legislation and
regulations made after Bre-X fraud and
Walkerton tragedy
•A “qualified person” (QP) is:
–an engineer/geoscientist with at least five
years of experience in mineral
exploration, mine development or
operation or mineral project assessment,
or any combination of these
Continued ..

225. 2-224
Qualified Person
–has experience relevant to the subject
matter of the mineral project and the
technical report
–is a member in good standing of a
professional association
–examples include “brownfield,” technical
reports, building codes

226. 2-225
Provincial and Territorial Acts
•Provincial and territorial governments regulate
engineering and Geoscience by Acts of provincial
legislatures (in the provinces) or legislative councils
(in the territories)
•Eight provinces/territories regulate engineering and
Geoscience in the same Act, and three provinces
regulate engineering and Geoscience in separate
Acts
•Two jurisdictions (PEI and Yukon) regulate
engineering, but do not yet regulate Geoscience

227. 2-226
Contents of the Acts
•Legal definition of engineering and/or Geoscience
•Purpose of the Act (which, in every case, is to
protect the public)
•Authority to establish a provincial (or territorial)
Association
•Purpose (or objects) of the Association
•Standards for granting licenses (or for admission to
the Association)
CONTINUED…

228. 2-227
Contents of the Acts
•Procedures for establishing regulations to govern professional
practice
•Procedures for establishing bylaws to govern the Association
itself
•Code of Ethics to guide the personal actions of the Licensees
(or members)
Every Act is available on the Internet via the Web pages for
the provincial and territorial Associations.

229. 2-228
Legal Definition of Engineering
•Engineers Canada definition:
ThePracticeofProfessionalEngineering:anyactof
planning,designing,composing,evaluating,advising,
reporting,directingorsupervising,ormanaginganyofthe
foregoing,thatrequirestheapplicationofengineering
principlesandthatconcernsthesafeguardingoflife,health,
property,economicinterests,thepublicwelfareorthe
environment.*(Anadditionalparagraphexemptsnatural
scientistsfromthisdefinition)(EngineersCanadadoesnot
havemembersorregulatorystatus.Itisassociationtowhich
provincialassociationsbelong&provideguidanceand
assistanceonmattersconcerningassociation)

230. 2-229
CCPG Legal Definition of
Geoscience
The “practice of professional Geoscience” means the
performing of any activity that requires application of the principles
of the geological sciences, and that concerns the safeguarding of
public welfare, life, health, property, or economic interests,
including, but not limited to:
(a) investigations, interpretations, evaluations, consultations or
management aimed at discovery or development of metallic or non-
metallic minerals, rocks, nuclear or fossil fuels, precious stones and water
resources;
(b) investigations, interpretations, evaluations, consultations or
management relating to geoscientific properties, conditions or processes
that may affect the well-being of the general public, including those
pertaining to preservation of the natural environment.*

231. 2-230
Engineering Associations
Rules
•Regulations: rules to implement or support the Act
(e.g., admissions, conduct and misconduct,
discipline)
•By-laws: rules to administer the Association itself
(e.g., elections, financial matters, committees,
meetings)
•Engineering Code of Ethics: states standard of
conduct expected of individual engineers

232. 2-231
Admission to Engineering
•Education (more details to follow)
•Experience (more details to follow)
•Knowledge of professional practice and ethics
•Language
•Character
•Residence
•Age

233. 2-232
Academic
Requirements/Education
•Canadian accredited degrees (CEAB):
–Exempt technical exams
•Non-accredited degrees/technologists:
–Assigned technical exams
CONTINUED…

234. 2-233
Academic
Requirements/Education

235. 2-234
•Internationally Educated Engineers:
–Formal agreements between countries (looking
to exempt)
–Confirmatory examinations (generally four
technical exams)
–Directed (Specifically assigned) exams if the
degree is very different from Canadian
accredited degree, not having the same breadth
and depth
Academic
Requirements/Education

236. 2-235
Academic
Requirements/Education
•Examinations
–Technical examinations (CEQB or association’s
syllabus):
•Postgraduate degree may reduce the number of
examinations
–Professional Practice examination:
•All applicants must pass law and ethics exam(s) in at
least one jurisdiction. Usually, each association recognizes
the other associations’ law and ethics exam.

237. 2-236
Experience
•Four years experience (in Quebec, three years)
•At least one year of Canadian experience:
–Internship experience may be considered if
acquired after half of study (after year 2)
–Postgraduate degree may give credit up to
one year. Some provinces give more credit
depending on type of experience

238. 2-237
Experience
•Quality of experience
Application of theory
Practical experience
Management of engineering
Communication skills
Social implications of engineering

239. 2-238
Admission to Geoscience
•Knowledge Qualifications
–Minimum knowledge qualifications are
similar to Canadian university degree
programs in Geoscience, typically four
years of study
•Experience Qualifications
–At least 12 months’ work experience in a
Canadian environment

240. 2-239
Admission to Geoscience
–A minimum of four years work experience
is required
–Summer work, co-op work, or similar
Geoscience work experience gained
before satisfying the knowledge
requirement is acceptable, up to a
maximum of 12 months
–Experience in postgraduate study or
teaching of Geoscience can often be
credited up to 24 months of experience
credit
CONTINUED…

241. 1/26/2021 240
Role of EngGeoMb
•Regulates the practice of professional engineering
in Manitoba. It is a licensing body for individuals
and engineering/geoscience companies. Its
function is to protect public safety.
•It Enforces the act. EngGeoMb-The Engineering
and Geoscientific Professions Act .
•EngGeoMb establishes and maintains the practice
of engineering and geoscience.
•Promote public awareness of EngGeoMb

242. 1/26/2021 241
Purposesof EngGeoMb
•The purposes of the association are to
•(a)govern and regulate the practice of professional
engineering and professional geoscience in Manitoba;
•(b)promote and increase, by all lawful means and in the
public interest, the knowledge, skill and competency of its
members and students in all things relating to the professions
of engineering and Geoscience; and
•(c)advocate where the public interest is at risk.

243. 1/26/2021 242
EngGeoMb --Types Of Licenses
•EngGeoMb is self regulating body. Manitoba Act –Formed
EngGeoMb. EngGeoMb regulates itself
•Few different Types Licenses 1. Regular license,2. Temporary
licence ( For Engineers from US with P.E status) 3. specified
scope of practice licence (not yet implemented)
•EIT & GIT provision –both titles are protected.
•Certificate of authorization for engineering and geoscience
companies.

244. 1/26/2021 243
Licensing Requirement
They are the same for all applicants, no matter where
they come from. They must:
•be at least 18 years of AGE;
•be a citizen or permanent resident of Canada (for
some associations only).
•be of good character

245. 1/26/2021 244
Licensing Requirement..Cont..
•hold a degree from a Canadian Engineering Accreditation
Board (CEAB) -accredited program or equivalent
qualifications;
•successfully complete the Professional Practice Examination
(NPPE); and
•have at least four years of acceptable, verifiable experience in
engineering, one of which must be acquired in Canada under
a Professional Engineer’s supervision.

246. 1/26/2021 245
Admission to the profession:
Once the requirements are completed
You will be issued a license
A seal (stamp)
Can use the title P.Eng.

247. 1/26/2021 246
Seal –Engineers Seal
All Licensed Engineers get a seal
Primarily to seal the drawing (Approving), specification,
report, plan etc..prepared or verified by the Engineer
or geoscientist
Should be legible and dated
Seal should be applied to copies not master
Any changes to the document should be sealed
Seals should not be used in Business card or
advertising.
Seal is actually the property of the association.

248. 1/26/2021 247
•What is Ethics?
•Study of right and wrong, good and evil, obligations and rights,
justice, and social and political ideals.
•Common Definition for us: Defining , analyzing, evaluating and
resolving moral problems and developing moral criteria to
guide human behavior.

249. 11-248
Ethics and Problem Solving
•Philosophy
–Derived from the Greek meaning “love of
wisdom”
–Deals with search for truth and knowledge
–Ethics is one of the four branches of philosophy
•Ethics
•Logic
•Epistemology
•Metaphysics

250. 11-249
Philosophy Branches
•Ethics
–study of right and wrong, good and evil, obligations and rights,
justice, and social and political ideals
•Logic
–study of the rules of reasoning
•Epistemology
–study of knowledge itself
•Metaphysics
–study of very basic ideas such as existence, appearance,
reality, and determinism

251. 11-250
Ethics
•Ethics and logic have many practical
applications in our lives
•Ethical writings can be traced back over 3,000
years
•Logic is also important to engineers and
geoscientists, it is the basis of mathematical
derivations

252. 11-251
Four Ethical Theories
•Mill’s utilitarianism
•Kant’s formalism, or duty ethics
•Locke’s rights ethics
•Aristotle’s virtue ethics

253. 11-252
Summary of four Ethical Theories

254. 11-253
Principles of Justice
•Definition of justice:
“A state of affairs in which conduct or action is
both fair and right, given the circumstances”
•For an ethical dilemma, the decision must
satisfy both the test of “rightness,” by agreeing
with the ethical theories, and also the test of
“fairness
•Four basic categories of justice, depending on
the application

255. 11-254
Corrective Justice
•Fairness in rectifying wrongs
•When someone harms a person or damages a
person’s property, ethical theories agree that
the person has the right to rectification,
replacement, or repair
•Two applications are relevant in engineering
and Geoscience practice:
–Tort law
–Professional discipline

256. 11-255
Corrective Justice
•Tort law
–Tort means injury or damage
–Engineers and geoscientists must be responsible for their
actions and decisions (covered in Chapter 8)
•Professional discipline
–Licensing Associations protect public by deterring unlicensed
persons from practicing, and by disciplining licensed
professionals who have been found guilty of professional
misconduct or incompetence.
–Each Association must respond to complaints and must
discipline professionals who are found guilty of misconduct,
which includes incompetence, negligence, and breaches of
the Code of Ethics

257. Codes of Ethics as Guides to
Conduct
•Codes of Ethics include statements of general principles followed
by instructions for specific conduct that emphasize the duties
•General principles:
–Duty to Society
–Duty to Employers
–Duty to Clients
–Duty to Colleagues
–Duty to Employees and Subordinates
–Duty to the Profession
–Duty to Oneself
11-256

258. 11-257
Codes of Ethics as Guides to
Conduct
•DUTY TO SOCIETY
–most important duty
–duty to protect the safety, health, and welfare of
society whenever society is affected by their work
–the professions receive the privilege of self-regulation
•DUTY TO EMPLOYERS
–must act fairly and loyally to the employer
–must keep the employer’s business confidential
–disclose any conflict of interest
…CONTINUED

259. 11-258
Codes of Ethics as Guides to
Conduct
•DUTY TO CLIENTS
–same obligations to clients as an employee has to the
employer
•DUTY TO COLLEAGUES
–must act with courtesy and good will toward colleagues
–Codes of Ethics state specifically that fellow professionals
must be informed whenever their work is reviewed
•DUTY TO EMPLOYEES AND SUBORDINATES
–must recognize the rights of others, especially if they are
employees or subordinates
…CONTINUED

260. 11-259
Codes of Ethics as Guides to
Conduct
•DUTY TO THE PROFESSION
–must maintain the dignity and prestige of the profession
–must avoid scandalous, dishonorable, or disgraceful conduct
•DUTY TO ONESELF
–must ensure that the duties to others are balanced by the
individual’s own rights
–must insist on adequate payment, a satisfactory work
environment
–strive for excellence and maintain competence in the rapidly
changing technical world

261. 1/26/2021 260
•What is a Code of Ethics?
•The Code of Ethics is a basic guide to professional conduct
and imposes duties on the practising professional engineer,
with respect to:
•society;
•employers;
•clients;
•colleagues, including employees and subordinates;
•the engineering profession; and
•himself/herself.

262. Code of Ethics
For the Practice of Professional
Engineering & Professional Geoscience
Association of Professional Engineers and Geoscientists of the Province of
Manitoba
1/26/2021 261

263. 1/26/2021 262
Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941
77. The following is the Code of
Ethics of the Association:
1. It is the duty of a practitioner to the public, to the
practitioner's employer, to the practitioner's clients, to
other members of the practitioner's profession, and to the
practitioner to act at all times with, i.fairness and loyalty
to the practitioner's associates, employers, clients,
subordinates and employees,
ii.fidelity to public needs,
iii.devotion to high ideals of personal honour and
professional integrity,
iv.knowledge of developments in the area of professional
engineering relevant to any services that are undertaken,
and
v.competence in the performance of any professional
engineering services that are undertaken.

264. 1/26/2021 263
Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941
2. A practitioner shall, i.regard the practitioner's
duty to public welfare as paramount,
ii.endeavour at all times to enhance the public
regard for the practitioner's profession by
extending the public knowledge thereof and
discouraging untrue, unfair or exaggerated
statements with respect to professional
engineering,
iii.not express publicly, or while the practitioner
is serving as a witness before a court,
commission or other tribunal, opinions on
professional engineering matters that are not
founded on adequate knowledge and honest
conviction,
iv.endeavour to keep the practitioner's licence,
temporary licence, limited licence or certificate
of authorization, as the case may be,
permanently displayed in the practitioner's place
of business. Professional Engineers Ontario Code
of Ethics, Section 77 of the O. Reg. 941

265. 1/26/2021 264
Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941
3.A practitioner shall act in professional
engineering matters for each employer as a
faithful agent or trustee and shall regard as
confidential information obtained by the
practitioner as to the business affairs,
technical methods or processes of an
employer and avoid or disclose a conflict of
interest that might influence the
practitioner's actions or judgment.

266. 1/26/2021 265
Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941
4.A practitioner must disclose immediately to
the practitioner's client any interest, direct
or indirect, that might be construed as
prejudicial in any way to the professional
judgment of the practitioner in rendering
service to the client.

267. 1/26/2021 266
Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941
5.A practitioner who is an employee-engineer and is
contracting in the practitioner's own name to
perform professional engineering work for other
than the practitioner's employer, must provide
the practitioner's client with a written
statement of the nature of the practitioner's
status as an employee and the attendant
limitations on the practitioner's services to the
client, must satisfy the practitioner that the
work will not conflict with the practitioner's duty
to the practitioner's employer, and must inform
the practitioner's employer of the work.

268. 1/26/2021 267
Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941
6.A practitioner must co-operate in working
with other professionals engaged on a
project.

269. 1/26/2021 268
Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941
7.A practitioner shall,
i.act towards other practitioners with courtesy and good
faith,
ii.not accept an engagement to review the work of
another practitioner for the same employer except
with the knowledge of the other practitioner or except
where the connection of the other practitioner with the
work has been terminated,
iii.not maliciously injure the reputation or business of
another practitioner,
iv.not attempt to gain an advantage over other
practitioners by paying or accepting a commission in
securing professional engineering work, and
v.give proper credit for engineering work, uphold the
principle of adequate compensation for engineering
work, provide opportunity for professional
development and advancement of the practitioner's
associates and subordinates, and extend the
effectiveness of the profession through the
interchange of engineering information and
experience.

270. 1/26/2021 269
Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941
8.A practitioner shall maintain the honour and
integrity of the practitioner's profession and
without fear or favour expose before the
proper tribunals unprofessional, dishonest
or unethical conduct by any other
practitioner. R.R.O. 1990, Reg. 941, s. 77;
O. Reg. 48/92, s. 1.

271. 1/26/2021 270
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941
72.(1)In this section,
"harassment" means engaging in a course of vexatious comment
or conduct that is known or ought reasonably to be known
as unwelcome and that might reasonably be regarded as
interfering in a professional engineering relationship;
"negligence" means an act or an omission in the carrying out of
the work of a practitioner that constitutes a failure to
maintain the standards that a reasonable and prudent
practitioner would maintain in the circumstances. R.R.O.
1990, Reg. 941, s. 72 (1); O. Reg. 657/00, s. 1 (1).

272. 1/26/2021 271
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941
(2)For the purposes of the Act and this Regulation,
"professional misconduct" means,
(a) negligence,
(b) failure to make reasonable provision for the safeguarding of
life, health or property of a person who may be affected by
the work for which the practitioner is responsible,
(c) failure to act to correct or report a situation that the
practitioner believes may endanger the safety or the welfare
of the public,

273. 1/26/2021 272
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941
(d) failure to make responsible provision for complying with applicable
statutes, regulations, standards, codes, by-laws and rules in
connection with work being undertaken by or under the
responsibility of the practitioner,
(e) signing or sealing a final drawing, specification, plan, report or other
document not actually prepared or checked by the practitioner,
(f) failure of a practitioner to present clearly to the practitioner's employer
the consequences to be expected from a deviation proposed in
work, if the professional engineering judgment of the practitioner is
overruled by non-technical authority in cases where the practitioner
is responsible for the technical adequacy of professional
engineering work,

274. 1/26/2021 273
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941
g) breach of the Act or regulations, other than an action that is
solely a breach of the code of ethics,
(h) undertaking work the practitioner is not competent to perform
by virtue of the practitioner's training and experience,

275. 1/26/2021 274
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941
(i) failure to make prompt, voluntary and complete disclosure of an
interest, direct or indirect, that might in any way be, or be
construed as, prejudicial to the professional judgment of the
practitioner in rendering service to the public, to an employer or to
a client, and in particular, without limiting the generality of the
foregoing, carrying out any of the following acts without making
such a prior disclosure:
1. Accepting compensation in any form for a particular service from more
than one party.2. Submitting a tender or acting as a contractor in
respect of work upon which the practitioner may be performing as
a professional engineer.
3. Participating in the supply of material or equipment to be used by the
employer or client of the practitioner.
4. Contracting in the practitioner's own right to perform professional
engineering services for other than the practitioner's employer.
5. Expressing opinions or making statements concerning matters within
the practice of professional engineering of public interest where the
opinions or statements are inspired or paid for by other interests,

276. 1/26/2021 275
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941
(j) conduct or an act relevant to the practice of professional
engineering that, having regard to all the circumstances,
would reasonably be regarded by the engineering
profession as disgraceful, dishonourable or unprofessional,
(k) failure by a practitioner to abide by the terms, conditions
or limitations of the practitioner's licence, limited licence,
temporary licence or certificate,

277. 1/26/2021 276
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941
(l) failure to supply documents or information requested by an
investigator acting under section 34 of the Act,
(m) permitting, counselling or assisting a person who is not a
practitioner to engage in the practice of professional
engineering except as provided for in the Act or the
regulations,
(n) harassment. R.R.O. 1990, Reg. 941, s. 72 (2); O. Reg.
657/00, s. 1 (2).

278. 1/26/2021 277
Disciplinary Process steps
Investigation (Complaints) Committee Carries out:
Compliant received by PEO about misconduct
Gathering information
Evaluation of the complaint
Disciplinary Committee Carries out
Formal hearing
Disciplinary action

279. 1/26/2021 278
Possible Disciplinary Actions(Some)
•Lose license, getting restrictions, suspension and
limiting practice
•Fines
•Reprimand or counsel
•Publish finding with or without names (Assoc.
publication)
•We may be asked to comply by court
•More details in EngGeoMb Act

280. 1/26/2021 279
Enforcement & Discipline
Enforcement is focused on Non-members
like misuse of title and performing
unsupervised engineering work.
Discipline is focused on the EngGeoMb-
members & holders of license and
Certificate of authorization .

281. CHAPTER 12
ETHICS IN
PROFESSIONAL
EMPLOYMENT

282. Technical and Management
Authority
•Accepting an employment offer creates a
contract
•Sometimes employer and employee disagree
over professional or ethical issues
•Employer must have management authority to
direct the company’s resources
•Professional must have technical authority to
apply engineering or geoscientific knowledge
and skills

283. 12 -282
Over-Ruling Technical
Recommendations
•When an employer or client overrules advice of
a professional:
–Explain to the employer or client in writing the
consequences of ignoring your advice
–Get response in writing to ensure that the advice and
the consequences have been understood
–Employer or client now has full responsibility for the
decision and any consequences. You have satisfied
your responsibilities, unless the decision involves
illegal or unethical activities

284. 12 -283
Illegal Activities
•Professional engineer or geoscientist may be asked to
engage in an activity that is contrary to the law
•Often occurs because of pressure by management to
generate profits. For example:
A geoscientist is asked to approve improper disposal of
toxic industrial wastewater. This disposal is contrary to
provincial environmental regulations.
•The necessary action is clear: the engineer must advise
employer that action is illegal and must not break the law
•Employers do not have the authority to direct an employee to
break the law

285. Activities Contrary to the Code of
Ethics
•An engineer may be asked to perform an action
that, while not clearly illegal, is a breach of the
Code of Ethics of the Association
•In these cases, professional should decline to
act on the employer’s request
•Employer cannot direct professional engineer to
violate Code of Ethics
…CONTINUED

286. 12 -285
Activities Contrary to the Code of
Ethics
•Code of Ethics has legal significance under the
Professional Engineering and/or Geoscience
Act
•Employer, manager, or client who is also a
professional engineer or geoscientist is equally
bound to follow the Code of Ethics

287. 12 -286
Activities Contrary to
the Conscience of the Professional
•A professional may be asked to perform an activity that
contravenes his or her conscience
•Marginally ethical industries:
–distilleries, breweries, wineries, and tobacco processors
–casinos, slot machines, lotteries, and similar gambling
–manufacturing of landmines, weapons, ammunition or
explosives
–industries that pollute or create dangerous by-products
…CONTINUED

288. 12 -287
Activities Contrary to the
Conscience of the Professional
•Each individual must consult his or her
conscience to decide whether an ethically
marginal industry benefits society enough to
justify working for it
•Many Canadians face a dilemma when asked to
work in such industries
•Refusing to follow employer’s directive may
have unfair consequences such as disciplinary
action or dismissal

289. 12 -288
Professional Employee
Guidelines
•Working conditions are not under the control of
the licensing Associations
•Codes of Ethics do not cover typical
employment problems, such as:
–salaries, benefits, hours of work, hiring or
terminating professional employees
…CONTINUED

290. 12 -289
Professional Employee
Guidelines
•The Canadian Society of Professional Engineers
(CSPE) and NSPE have guidelines with the purpose to
establish a professional workplace based on “ethical
practices, co-operation, mutual respect, and fair
treatment”
•Guidelines have 60 clauses divided into subsections:
–Recruitment
–Employment
–Professional Development
–Termination

291. Professional Employees and
Labor Unions
•Professional engineers and geoscientists have a
right to negotiate pay, hours of work, and other
conditions of employment
•Professional employee should have a personal
contract specifying all of the above
•Employer may refuse to negotiate these basic
conditions
•Professional is faced with difficult choice:
–accept unfair conditions, resign, or take part in
“collective action” against the employer…CONTINUED

292. 12 -291
Professional Employees and
Labor Unions
•Professionals who are also company
managers are not permitted to join unions
•Forming a union involves confrontation,
generates bureaucracy and takes time and
effort
•Unionization should be last resort
•Should first try to negotiate personal (or
group) employment contracts

293. 12 -292
Unethical Managers and Whistle-
Blowing
•Employee who finds evidence of illegal or criminal activities in
workplace, such as fraud, theft, misrepresentation, or destructive
environmental practices, has a duty to remedy the situation
•The proper action depends on the case:
–Report the facts to employer (or supervisor) for action (quick
reporting is important)
–Employer (or supervisor) may need to obtain authority from a
senior manager or owner, who is ultimately responsible for the
organization
…CONTINUED

294. 12 -293
Unethical Managers and Whistle-
Blowing
•Further action is urgent when illegal activity is a
public hazard
•What if the employer ignores a hazardous
problem?
–creates a dilemma: your duty to the employer
conflicts with your duty to the public welfare
–Three possible courses of action:
•Correct the problem
•Blow the whistle
•Resign in protest …CONTINUED

295. 12 -294
Unethical Managers and Whistle-
Blowing
•Correct the problem
–usually most effective, especially if illegal actions are minor or
employer is open to improvement and change
•Blow the whistle
–alert external regulatory agencies that company is acting
dishonestly -whistle-blowing
–unpleasant and unfriendly act
•Resign in protest
–may be necessary in serious cases, where remaining with the
company might imply collusion in the illegal activities

296. 12 -295
Overview: Conflict of Interest
•Unethical and unprofessional
•Occurs whenever a professional receives any
benefit or has any relationship that interferes
with the duty owed to the client or employer
•Occurs when an employee secretly receives a
benefit or payment from more than one person
for the same activities
•Every Code of Ethics requires disclosure of any
conflict of interest

297. 12 -296
Common Conflicts of Interest
•Seven common categories defined by Kernaghan and Langford in
The Responsible Public Servant:
–Accepting secret commissions
–Misusing the employer’s facilities
–Secret employment or “moonlighting” without permission of the
primary employer
–Self-serving decisions
–Influence peddling
–Abusing confidential information
–Arranging future employment in return for a favor which can be
effected by your current position.

298. 12 -297
Subcategories of Conflict of
Interest
•The conflicts of interest may be subdivided into
three categories:
–Clear (or Actual) Conflict
•professional’s service to the client or employer
is clearly compromised
–Potential (or Latent) Conflict
•professional does not have a conflict of interest
at present, but the situation is such that a
reasonable person would predict a conflict to
exist in future
…CONTINUED

299. 12 -298
Subcategories of Conflict of
Interest
–Perceived Conflict
•the professional does not have a conflict of
interest, but observers believe (or might believe)
that a conflict of interest does exist

300. 12 -299
Avoiding Conflicts of Interest
•Refuse to accept gifts or bribes
•Refuse to misuse your authority for personal
gain
•Refuse to favor specific people
•Full disclosure if conflict arises
•Resist temptation to give or receive favored
treatment

301. 15 -300
Duty to Report: Whistle-Blowing
•An engineer or geoscientist who observes
unsafe, unethical, or illegal practices must take
action
•General rules:
1. Is the situation dangerous to human life?
•Need aggressive approach
•Many cases involve infractions of the Code of Ethics, but
more serious cases may also be offences under the Criminal
Code
2. Is problem caused by the situation or by the individual?
•Use own judgment
…CONTINUED

302. 15 -301
Duty to Report: Whistle-Blowing
3. Direct, but informal, personal conversation with
the closest person involved (presumably a
colleague or your boss), proposing a solution
(not just the description of the problem), usually
yields the best results
•If this yields no results, then speak to someone
further up the chain of authority
4. Finally, if no resolution in sight, consult
Association for further guidance.
…CONTINUED

303. 15 -302
•Provincial Associations have often served as
mediators to help professionals who believe that
clients, colleagues, employers, or employees
are involved in unsafe, unethical, or illegal
practices
Duty to Report: Whistle-Blowing

304. The Ethical Dilemma of Whistle-
blowing
•Whistle-blower versus Troublemaker
–Different in two important ways:
•motive of the person involved
•methods used to protect the public
…CONTINUED
15 -303

305. 15 -304
The Ethical Dilemma of Whistle-
blowing
•Whistle-blower must be aware that process may
involve public exposure and scrutiny and may
place career in jeopardy
•Before using the reporting process, engineer or
geoscientist should consider the following:
–Informal resolution
–Confidentiality
–Retaliation

306. Chapter 8
hazards, liability,
standards, and safety

307. 8 -306
Introduction
•For safe design, follow design codes and standards,
be aware of safety regulations, and make formal
hazard analyses
•For workplace safety in factories, construction sites,
well sites, or process plants, learn and follow
Occupational Health and Safety Regulations
•If a hazardous project causes damage or loss, the
engineer or geoscientist responsible may be held
liable

308. 8 -307
Sources of Professional
Liability
•If engineer or geoscientist gives client incompetent advice or
designs an unsafe product or process, they may be sued or
ordered to pay damages
•Lawsuits are based on several legal sources:
–Contract law
–Tort law
–Consumer legislation
•In addition, legal liability, negligence, incompetence, or
indifference to public safety might result in disciplinary action
by licensing Association

309. 8 -308
Professional Liability –Tort
Law
•Tortmeans injuryor damage
•The defendant’s conduct must be classified asintentional,
negligent, oraccidental
•In general, torts must be intentional or negligent to result in
liability
•To succeed in a tort action, plaintiff must prove that:
–defendant owed the plaintiff a duty of care
–defendant breached that duty
–plaintiff suffered loss or damage
–breach was the significant cause of the plaintiff’s loss

310. 8 -309
Defining Duty of Care
•A duty of care exists when an action satisfies the
following two conditions:
–A reasonably foreseeable risk of injury or damage to
others exists, because of the action
–Someone is close enough to be affected by the
action
•Scope of duty of care has expanded over time, including
people not close to the actions (for example, poor
building design, pollution, etc.)

311. 8 -310
Defining Standard of Care
•Determined by courts applying reasonable
persontest
–“What would a reasonable person do, under the
circumstances?”
•Professionals are expected to use
reasonable care, established practices, and
well-tested principles
•Best protection against negligence is
careful, thorough, accurate work

312. 8 -311
Proving Negligence
•Canadian tort lawsuits require the injured party to provide
evidence of negligence
•The courts will assume negligence has been proved when:
–whatever caused the harm was under the sole control of
the defendant, and
–the event that caused the harm would not occur without
negligence
•Tort law requires engineers and geoscientists to avoid
negligence and incompetence and to eliminate hazards that
could endanger others

313. 8 -312
Products Liability
•Consumers expect manufacturers to make quality goods
•When a consumer purchases a defective product from a
manufacturer, the contract is the basis for demanding
reparation
•Damage claims may be made for:
–Defective manufacturing, or
–Negligence in design, or
–Failure to warn of dangers associated with the product

314. 8 -313
Contract Conditions and
Warranties
•Contract clauses are divided into conditions and warranties
•Conditions
–key clauses that must be satisfied, or contract may be
terminated
•Warranties
–clauses that permit consumer to demand repairs,
replacement, or damages
–warranty clause does not permit a contract to be
terminated

315. 8 -314
Government Acts Regulating
Products
•Sale of Goods Act
–Every province and territory has a law that defines certain
conditions and warranties to protect general public
•Consumer Protection Act
–Every province has one
–Act imposes further provisions on consumer sales
•Hazardous Products Act
–Federal act that sets standards of safety across Canada for
variety of consumer products (e.g., hockey helmets)
–Motor Vehicle Safety Act sets safety standards for automobile
manufacturers

316. 8 -315
Product Laws
•United States: Strict Liability
–covers product defects and consumer safety
–Canadian engineers must be aware of it because NAFTA
permits freer flow of products across the border into the
United States
•Canada: Risk-Utility Analysis
–lawsuits for product liability are brought against the
manufacturers based on breach of warranty or on strict
liability
–lawsuit is usually brought against engineer only in case of
alleged negligence

317. 8 -316
Design for Safety
•Obtaining Codes, Standards, and Regulations
–the codes and standards are EXTREMELY important in
design for safety
–check for all that apply to your design
•Eliminate known hazards
•Follow established design standards
•Follow laws and regulations
•Follow good engineering practice

318. 8 -317
Design for Safety

319. 8 -318
Hazard Reduction
•Hazard analysis should be conducted for every design:
–Identify
–Eliminate
–Shield
–Warn, Remedy, Recall
•Failure analysis
–failure modes and effects analysis (FMEA)
–fault tree analysis (FTA)
continued…

320. 8 -319
Occupational Health and
Safety (OHS) Laws
•Occupational Health and Safety Regulations give
employees three basic rights:
–right to know
–right to refuse dangerous work
–right to participate
•Employer must ensure that workplace is safe, must
provide protective devices, and ensure they are
maintained in good condition
•There must be a workplace health and safety
committee

321. 8 -320
Workers’ Compensation Act
& WHMIS
•Workers’ Compensation Act
–each province has a law that requires employers to create
a fund that may be used to pay wages, medical disability,
and related benefits to workers that are unable to work
because of a workplace injury
–“no-fault” workers’ insurance
•Workplace Hazardous Materials Information System
(WHMIS)
–hazardous materials in workplace are under strict control
of both federal and provincial OHS laws

322. 7-321
Consulting Opportunities
•Professionals often enter private practice and consulting at the peak
of a career
•Demanding field: consultants must compete for new projects and
clients (Only a small fraction of practitioners)
•Consulting Activities:
•Engineering advice
•Expert testimony
•Feasibility studies
•Detail design
•Specialized design
•Project management

323. 7-322
•All provinces and territories (except Quebec) require firms
offering services to the public to have an additional licence
–called “Permit to Practice,” “Certificate of Authorization,” or
“Certificate of Compliance”
–protects public by requiring firms to identify professionals
responsible for firm’s engineering or Geoscience work
•most provinces and territories permit licensed individuals (sole
proprietors) to offer services to the public (exceptions are
Ontario and Newfoundland and Labrador)
Practice by Partnerships or
Corporations
continued…

324. 7-323
Liability Insurance
Requirements
•Quebec (OIQ and OGQ)
–Mandatory for all members
•BC, Manitoba, and Saskatchewan
–Mandatory in Manitoba for normal cases
–clients must be notified if the liability does not cover services
•Ontario (PEO and APGO)
–mandatory, unless clients are notified if the liability does not cover
services
•New Brunswick, Newfoundland, Labrador
–not mandatory
•Northwest Territories, Nova Scotia (APENS and APGNS), Nunavut, Prince
Edward Island, and Yukon
–voluntary
–HIGHLY RECOMMENDED, EVEN WHEN VOLUNTARY!

325. 7-324
Secondary Liability Insurance
•In all provinces and territories (except Ontario) professionals
participate in mandatory Secondary Liability Insurance
Program
•Engineers Canada administers the plan
–provides members with $100,000 in professional liability
coverage, plus unlimited legal fees
•Typically covers engineers and geoscientists who are
employees
•Provides an extra layer of protection. Not recommended to
replace errors and omissions insurance.

326. 7-325
Professional Service Contracts
•Standard contract forms are available from provincial
Associations and consultant organizations
•ACEC (Association of Canadian Engineering
Companies) recommends Quality-Based Selection
(QBS) process
–separates evaluation of consultant’s qualifications
from fee negotiation
–client negotiates fee after selecting consultant

327. 7-326
Quality Based Selection (QBS)
•QBS process:
–Identify short list of firms with relevant qualifications
–Request detailed proposals
–Select best-qualified, available firm through a detailed
process of interviews, site visits, client references,
etc., as required
–Negotiate appropriate fee based on scope of services
and execute an agreement
–Notify unsuccessful consultants

328. 7-327
QBS Criteria and Evaluation
•Sum of marks gives a relative rating:
–Experience and qualifications of project team
•Project manager/engineer and senior designers (15–25)
•Technical support staff (5–15)
•Sub-Consultants (0–15)
–Management Qualifications
•Experience on similar projects (10–20)
•Availability of key staff (5–15)
•Stability and reputation of the firm (0–10)
•Multidisciplinary/Specialty capabilities (0–10)
•Quality assurance systems (0–10)
•Local office (0–10)
•Insurance coverage (0–5) continued…

329. 7-328
QBS Criteria and Evaluation
–Project Implementation
•Approach and methodology (10–25)
•Scheduling of key activities and resources (5–
15)
•Project quality assurance program (0–10)

330. 7-329
Benefits of QBS
•Engineer and client work together to define
and deliver a project
•Selection focuses on value to client
•Life-cycle costs of the asset can be optimized
•With a detailed understanding and agreement
on the project scope, engineer is in a much
better position to determine resource
requirements, cost estimates and fees

331. 7-330
Compensation for Consultants
•Four common methods are indicated by FIDIC:
–Per Diem
•daily rates
–Payroll costs times a multiplier
•cover overhead and profit
•used for site investigations, preliminary design, process studies,
plant layout, and detailed design
–Lump sum
•includes all costs, overhead, and profit determined in advance
–Fee as a percentage of estimated or actual costs of construction
•Becoming less and less popular

332. 7-331
Starting a Private Practice
•Private practice (or consulting) is an attractive option for
a practitioner that has technical expertise, good self-
discipline, and wants a challenge
•May need two or three years to become fully established
•Need strong business management skills and
entrepreneurial spirit
•Better to get experience as an employee before starting
own business
continued…

333. 7-332
Starting a Private Practice
•Checklist of skills, traits, and talents:
–Education and licensing
–Adequate experience and technical knowledge
–Network of contacts
–Determination
–Confidence and Independence
–Business skills
–People skills
–Good health
–Intelligence

334. Chapter 3
CONTINUING PROFESSIONAL
DEVELOPMENT

335. 3-334
Career Momentum versus
Obsolescence
•It is important to keep skills and knowledge up-to-date
•Professional development maintains career momentum
–“Classical” disciplines (mechanical engineering, civil
engineering, etc.) in about 10 years
–“High-tech” disciplines (computer engineering,
mechatronics, etc) in about 5 years
•Most provinces have mandatory or voluntary programs for
continuing competence

336. 3-335
Professional Development
Activities
•Professional Practice (activity as professional)
•Formal Activity (courses, seminars)
•Informal or Self-Directed Activity (attending conferences,
seminars, meetings of technical societies)
•Participation (mentoring, committees, community service, etc.)
•Presentations (conferences, meetings, courses, etc.)
•Contributions to knowledge (writing books, papers, codes,
standards, thesis, review papers, etc.)

337. Chapter 5
technical societies

338. 5-337
The Role of Technical Societies
•Encourage research, collect and classify new information, and
disseminate it to members
–important publishers of new research
–publish journals, conference proceedings, standards, and
codes
–equivalent to the learned societies in the arts and
humanities
•Role is different than role of Associations that license
engineers

339. 1/26/2021 338
Final Thoughts….
Best wishes and
Good Luck
Ramadoss Srinivasan P.Eng.