overview of the law as it relates to engineers presented by pierre champagne krista cajka nelligan...
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OVERVIEW OF THE LAW AS IT RELATES TO ENGINEERS
Presented By
Pierre Champagne
Krista Cajka
Nelligan O’Brien Payne LLP
Nelligan O’Brien Payne LLP is a full service law firm.
For more information please contact us.
Pierre Champagne
Tel: (613) 231-8369
Krista Cajka
Tel: (613) 231-8269
The Common Law System
• System of law in all Canadian provinces and territories except Quebec
• Roots in English legal history
• “Judge made” law
– Principle of “stare decisis”
The Civil Law System
• System of Law in Quebec
• Roots in French legal history
• Main source of law is a “Code”- Quebec Civil Code
• Similar to the common law system, judges also decide cases with reference to other similar cases, however, the Quebec Civil Code takes precedence
Civil Law vs. Criminal Law
• Civil Law (as a “type” of law, as opposed to a “system” of law)– ie. anything not defined as criminal law is generally
referred to as a “civil” matter. (ie. family law, personal injury lawsuits, negligence, breach of contract, etc…)
– Governed by the common law “system” outside Quebec, and the civil law “system” within Quebec
– Includes Administrative boards and tribunals
• Criminal Law – Governed by statute and common law - even in Quebec
Main Areas of Law Relevant to Engineers
• Business associations law
• Law of copyrights, patents and trade-marks
• Contract law
• Tort law
Business Associations
• Types of Business Associations:
• Sole Proprietorship
• Partnership
• Limited Partnership
• Corporation (Public and Private)
The Sole ProprietorshipLegal Status - No separate legal existence between
owner and business
Ease of Set-Up - Comes into existence when business iscarried on- Licencing requirements may applydepending on business
Business Names ActRegistration
- Required when name of sole proprietor isnot part of business name
Ease of Financing - Limited to personal resources and creditrating of owner
Risk &Responsibility
- Unlimited personal liability- All benefits/profits and losses accrue tothe owner
The PartnershipLegal Status - No legal separation between a “partner”
and “partnership”-Governed by the Partnerships Act and
Partnership Agreements (if made)Ease of Set-Up -Exists when “two or more persons carry
on business together with a view to aprofit”
- Licence may be required depending onthe business
Business Names ActRegistration
- Required unless name is composed only ofthe names of the Partners
Ease of Financing - Limited to personal resources and creditrating of partners
Risk &Responsibility
- Unlimited personal liability of thePartners
The Limited Partnership
• Distinction from a partnership: at least one partner with unlimited liability (general partner), and at least one partner with limited liability (…continued)
The Limited PartnershipLegal Status - No legal separation
-Governed by the LimitedPartnerships Act,Partnerships Act and PartnershipAgreements (if made)
Ease of Set-Up - Licence may be required depending onthe business
Business Names ActRegistration
- Declaration must be filed (renewableevery 5 years)
Ease of Financing - Limited to personal resources and creditrating of general and limitedpartners
Risk &Responsibility
- Unlimited personal liability of thegeneral partners, maximum liability oflimited partners is amount ofcontribution
- Limited partners cannot manage
The CorporationPublic vs. Private
• Public Corporation– Large in size– Generally set up for investment– Professionally managed
• Private Corporation:
• Definition: a company that restricts the right to transfer shares, limits the number of members (usually 50 or less), and prohibits an invitation to the public to purchase company shares or bonds.– Small in size– Generally set up as method of conducting livelihood– Managed by owner/manager
The CorporationLegal Status - Separate legal entity from shareholders
and managers- Governed by OBCA, CBCA, corporate
constitution, articles, by-laws, etc..Ease of Set-Up -“Incorporation” required
- Licence may be required depending onthe business
Business Names ActRegistration
- No registration under Business Names Actis required unless a name other than thecorporate name is being used
Ease of Financing - Public: Access to public capital markets(ie. Public share or bond offerings)
- Private: Access limited to resources ofowner(s)/manager(s) (ie. Private shares)
Risk &Responsibility
- Liability accrues to corporation- Directors/officers may be personally
liable in some situations (ie. Fraud)
The Law of Patents, Trade-marks & Copyrights
• The Law of Patents
• Issued for inventions and protected solely under the Patent Act
• Inventions are defined by section 2 of the Act as any art, process, machine, manufacture or composition of matter, or any new and useful improvement of one of these
• In Canada, protection extends for up to 20 years from the date of filing
The Law of Patents, Trade-marks & Copyrights
• The Law of Trade-marks
• Trade-marks and Trade-names are protected at common law and under the Trade-marks Act
• Registration provides the exclusive right to words, symbols and designs, or combinations of these that distinguish between your wares/services and those of someone else
• Registration provides protection in Canada renewable periods of 15 years
The Law of Patents, Trade-marks & Copyrights
• The Law of Copyright - How does it work?
– Protected solely under the Copyright Act.
– Registration optional since copyright is automatically protected upon creation of the work
– Registration recommended - may provide proof in the event of a future dispute
– Copyright law grants the right of exploitation to the authors of original literary, dramatic, musical and artistic works
– Generally, copyright in Canada lasts for the lifetime of the author and 50 years following his/her death (...continued)
The Law of Patents, Trade-marks & Copyrights
• Literary work includes computer programs
• Copyright Act , section 2 defines “Computer Program” as “a set of instructions or statements, expressed, fixed, embodied or stored in any manner, that is to be used directly or indirectly in a computer in order to bring about a specific result.”
The Law of Patents, Trade-marks & Copyrights
• The Meaning of “Computer Programs”
• Case law has interpreted “computer programs” to include “source and object codes for operating and application programs, component routines such as a table of numbers operating as a program lock, the screen display generated by the program, and perhaps even the language in which the source code is written.” (David Vaver, Intellectual Property: Copyright, Patents, Trade-Marks, (Concord, Ontario: Irwin Law, 1997) at page 27).
Contract Law
• Hallmarks of a contract:
– Intention to create legal relations
– Capacity
– Offer
– Acceptance
– Consideration
The Law of Torts
• What is a “tort?”– “A tort is a civil wrong, other than a breach of contract,
which the law will redress by an award of damages” (as defined in Fleming, The Law of Torts, 8th ed. (1992), p.1)
– Tort law is primarily concerned with apportioning loss and determining when it is appropriate to shift the loss suffered by one person (the “plaintiff”) to the person allegedly responsible for the loss (the “defendant”).
– Two broad categories of torts include:• Intentional Torts
• Negligence
Intentional Torts
E xam p les : assau lt , b a tte ry, n u isan celib e l an d s lan d er, m a lic iou s p rosecu tionin ten tion a l in flic t ion o f m en ta l su ffe rin g
fa lse im p rison m en t
C on sen t
S e lf-D e fen ce
D efen ce o f Th ird P erson s
D efen ce o f P rop erty
N ecess ity
L eg a l A u th ority
C on trib u to ry F au lt an d A p p ortion m en t
D efen ces
In ten tion a l Torts(lim ited in n u m b er)
Negligence
Exam ples: product liability cases,"slip and fall" cases, professional negligence,
negligent m isrepresentation
Duty of Care- owed by the defendant to the plaintiff
- the "neighbor" principle
B reach of duty of care(failing to m eet required "standard of care")
- general standard is the "reasonable person"- higher standard for special experience
Causation- direct link between defendant's negligence
and plaintiff 's loss
Dam ages reasonably forseeableat the tim e of the breach
E lem ents of a Negligence Action
Negligence(covers an unlim ited area of hum an activity)
The Professional Liability of Engineers
• Main Civil Causes of Action Against Engineers:
• Breach of Contract
• Tort– Negligence
– Negligent Misrepresentation• Any professional offering advice as part of their services is
vulnerable to this type of claim
Duty and Standard of Care Owed by Engineers
(Breach of Contract and Tort)
• “…to exercise the skill, care and diligence which may reasonably be expected of a person of ordinary competence, measured by the professional standard of the time” (B.M. McLachlin and W.J. Wallace, The Canadian Law of Architecture and Engineering (Toronto: Butterworths, 1987) at 97).
Limitation of Actions Against Engineers
• Professional Engineers Act - One Year Limitation Period• 46(1) Proceedings shall not be commenced against a member
of the Association or holder of a certificate of authorization, a temporary licence or a limited licence for damages arising from the provision of a service that is within the practice of professional engineering after twelve months after the date on which the service was, or ought to have been performed.
Limitation of Actions Against Engineers
• Professional Engineers Act - Extension of the One Year Limitation Period
• 46(2) The court in which an action mentioned in subsection (1) may extend the limitation period specified in subsection (1) before or after the expiration of the period if the court is satisfied that there are apparent grounds for the proceedings and that there are reasonable grounds for applying the extension.
Principle of Discoverability
– Generally relevant to limitation periods
– Time begins to run at time “cause of action” arose• Professional Engineers Act prior to September, 1984• After September, 1984, time runs from date services “were or ought to have been
performed”
– Principle of discoverability not relevant to limitation period for engineers, but relevant to extension of time (s. 46(2))
– “Cause of action”: fact(s) that give a person the right to seek relief against another and arises when
• facts were discovered
• or facts ought to have been discovered by reasonable diligence of plaintiff ((Aguonie v. Galion Solid Waste Material Inc. (1998), 38 O.R. (3d) 161 (C.A))
Extension of the Limitation Period
• Professional Engineers Act, section 46(2):
• Subject to discretion of the court
• Two requirements at law:
– (1) Apparent grounds for the action• This has been proven by a simple admission by a defendant that it was
a consulting engineering firm (Kerbel v. Carlson, Dunlop & Associates Ltd. (1994), 15 C.L.R. (2d) 1 (Ont. Gen. Divl). (…Continued)
Extension of the Limitation Period
– (2) Reasonable grounds for the extension looking at all the circumstances, including:
• Length of delay and reason for delay
• Extent to which plaintiff acted reasonably once it knew whether or not the act or omission of the defendant might give rise to a legal action - (discoverability)
• Increasing difficulty of proof with the passage of time• Prejudice to the plaintiff by not granting an extension vs.
prejudice to defendant if the order to extend time is granted. (Attorney General of Canada v. Libling (1980), 29 O.R. (2d) 44 (Div. Ct.)
Professional Liability For Breach of Contract
• Elements of a Breach of Contract:
• Existence of a contract
• Breach of the contract
• Damages to plaintiff caused by the breach
• Damages resulting from breach were foreseeable
Professional Liability For Breach of Contract
• Defences to a Breach of Contract Claim:
• No Contract
• No Breach– Duty of care met in the performance of the contract services
– Liability limited by disclaimer clause
– Expiry of one year limitation period
• Breach did not result in damages
• Damages not foreseeable at time contract was made
Professional Liability for Negligence
• Recall elements of an action in negligence:
• Duty of care is owed
• Breach of duty of care by falling below required standard
• Damages as a result of the breach
• Damages were reasonably foreseeable at the time of the breach
Professional Liability for Negligence
• Defences to a Claim in Negligence:
• No duty of care owed in the circumstances– At law a duty is owed when two criteria are met:
• a relationship of proximity exists• no policy reasons support a finding that no duty is owed
(Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.)
– A contract is proof that a duty of care is owed
• No breach of the standard of care
• Damages did not result from breach of the standard
• Damages were not reasonably foreseeable
Professional Liability for Negligent
Misrepresentation• Elements of an Action for Negligent
Misrepresentation:• Duty of care based on a “special relationship”• Professional making a representation made that is untrue,
inaccurate or misleading• Professional acting negligently in making the representation• Person to whom representation is made relies on it in a
reasonable manner• Reliance is detrimental and damages result
– (Hedley Byrne & Co. v. Heller & Partners Ltd., [1964] A.C. 465, followed in Queen v. Cognos Inc., [1993] 1 S.C.R. 87 [QL] at 12.)
Professional Liability for Negligent
Misrepresentation• Defences to Negligent Misrepresentation • No duty of care is owed
– same as above: where relationship of proximity exists and no policy reasons support a finding of no duty
– plaintiff not part of the limited class of individuals whom the professional knew would rely on the misrepresentation
• Plaintiff’s reliance is not reasonable– ie. Representation was opinion, discussion etc not business– Professional has expressly waived liability in a disclaimer
• Professional’s negligent misrepresentation did not cause damages
Professional Liability The Measure of Damages
• Breach of Contract
– Objective: to restore plaintiff to position s/he would have been in had the contract been performed.
– Remoteness: Plaintiff is entitled to damages in the reasonable contemplation of the parties at time contract was made, not at time of breach
– Aggravated damages: may be awarded for manner the contract was breached
Professional Liability The Measure of Damages
• Tort-Negligence and Negligent Misrepresentation
– Objective: to restore plaintiff to position s/he would have been in had tort not been committed.
– Remoteness: Plaintiff is entitled to damages reasonably foreseeable at time of the tort
– Punitive or exemplary damages
Professional LiabilityThe Measure of Damages
• Plaintiff must prove damages
• Damages must be foreseeable
• Causation
• Mitigation
Professional Liability Insurance
• Two types of Professional Liability Insurance Exist:
• Occurrence policies– Covers actions arising during the policy term
• Claims made policies– Covers claims made during the policy term
Professional Liability Insurance
• Indemnification: – coverage defined in individual policy– may or may not include legal fees
• Exclusions: – defined in individual policy– other examples include:
• errors/omissions outside area of professional practice
• unreasonable assumed risk (ie. Undertaking responsibility in a contract not normally imposed by common law) (…continued)
Professional Liability Insurance
• Duties of the Insured:
– Examples include:
• to fully and honestly complete insurance application
• to immediately notify insurer when claim made against them
• to fully co-operate with the insurer in the investigation and resolution of the claim
The Engineer as an “Expert Witness”
• Opinions can be given on matters beyond the knowledge of the “ordinary layperson”
• Neutral role - testimony is for the benefit of the court
• Properly define and explain technical terms to the court• Become familiar with the most recent editions of
standard treatises on the subject-matter of the testimony (Thomas A. Mauet, Donald G. Casswell, and Gordon P. Macdonald, Fundamentals of Trial Techniques, 2nd Canadian ed. (Toronto: Little, Brown & Company (Canada) Limited, 1995), at 106-109.)
Nelligan O’Brien Payne LLP is a full service law firm.
For more information please contact us.
Pierre Champagne
Tel: (613) 231-8369
Krista Cajka
Tel: (613) 231-8269