the hong kong polytechnic university 1 legal dimension society and the engineers

The Hong Kong Polytechnic University 1

Legal Dimension

Society and the Engineers


Why Legal Dimension

• Knowledge of law helps engineers in their practice

• Many of engineers actions or inactions could have legal implications for their company and certainly their jobs!!!!

• Engineers need know enough about the legal aspects of engineering practice to recognize when need to take certain actions or to know when legal counsel would be prudent

Engineering your future, S.G. Walesh


Legal Dimension

• 全港最高的环球贸易广场去年 9 月发生工作台倒塌意外 , 酿 6 人死亡惨剧，香港劳工处早前向出事地盘 3 间承建商发出共 81 张传票检控， 3 间承建商代表 29 日出庭透露会承认部分控罪，其它控罪则获控方撤回，案件押后至11 月 4 日再讯，届时将作判刑。

Legal dimension

• Legal issues are usually related to other matters – Health and safety leads to legal action– Environmental issues lead to legal action etc

• Pure legal issues – Infringement of contract– Infringement of trademark, copyright etc – Project delay leads to legal action



Professional and legal considerations - Basic principles

1. Preparing contracts for services

2. Interpretation of contracts once a project is underway, or your employment contract

3. Managing to minimize personal and organizational liability

Dunham, C.W, RD Young and JT Bockrath, 1979. Contracts, specifications and law for engineers, 3 rd Ed/ New York: McGraw-Hill Book Company.


Professional and legal considerations - Basic principles

4. Anticipating and/or preparing for expert witness testimony

5. Being aware of requirements in laws and rules

6. Being aware of the ways in which government may provide funding for client’s projects

7. Being aware of relevant pending or recent legislation and possible impacts on projects

Dunham, C.W, RD Young and JT Bockrath, 1979. Contracts, specifications and law for engineers, 3 rd Ed/ New York: McGraw-Hill Book Company.


Professional and legal considerations• Breach 違反 :

– Violation of a right, a duty or a law, either by an act of commission or by nonfulfillment of an obligation

• Fraud 欺騙 :– Intentionally deceitful practice aimed at depriving another

person of his/her rights or doing him/her injury in some respect

• Negligence 疏忽 : – “ breaches ..duty to exercise requisite care and

expertise ..below the appropriate standard of care.”• Liability 責任

– Being bound or obligated according to law or equity

Example

• Breach of copyright– A Belgian court has found the world’s most

popular internet search engine in breach of national copyright legislation and levied retrospective fines on Google of up to £2.4 million

– Apple sues Samsung for 'copying' the IPhone and Ipad

– More


http://www.youtube.com/watch?v=TXZFYPL3noY

http://www.youtube.com/watch?v=TXZFYPL3noY

http://www.youtube.com/watch?v=qsz5JsDqAYs&feature=related

Fraud

• BOC Hong Kong Manager Cleared of Lehman 雷曼 Products Fraud (mini-bond)


Negligence

• Akai's liquidator, Borrelli Walsh, will sue the failed firm's former auditor, Ernst & Young Hong Kong, for up to US$1 billion

• The Bank of East Asia Ltd v Tsien Wui Marble Factory Ltd, the Hong Kong Court of Final Appeal dealt with the issue as to when a cause of action arises in tort for economic loss as a result of the negligent design of buildings


Negligence

• Negligence cases involve all types of accidents. • Slip & fall, trip & fall, store accidents, accidents at

home or a friend's home, or visiting someone. • Using a defective product or piece of machinery falls

under the 'negligence' heading. • Car accidents, dog bites, lead poisoning, landlord not

having proper smoke alarms causing damage; also fall within the 'negligence' heading.


Liability

• A West Palm Beach Jury awarded a couple $11 million in a Product Liability suit. – The case involved the death of the couple's 25 year old

son in a 2004 rollover crash. According to the Plaintiffs the death was caused by a defective seat belt and front passenger seat of a Mitsubishi Sport Vehicle involved in the fatal rollover.



Some engineering services can expose the firm to liability

• Interpreting physical restrictions as to the use of the land– Negligence: failed to allow for building setbacks– setbacks were a structural necessity for virtually all

multi-level load-bearing masonry buildings and structures.

• Assisting in procuring of financing for project– Fraud: steers client to certain lender in return for kick-

back (bribery) from lender• Use of pirated computer software in business

http://en.wikipedia.org/wiki/Masonry


Copyright Ordinance 2007 (pirate software)

A new criminal offence that may be applicable to the director(s),partner(s) or persons(s) responsible for the internal management of a body corporate or partnership if the body corporate or partnership is found to have committed an act which attracts one of the aforesaidbusiness end-user criminal liabilities, unless he proves that he did not authorize such act.


• Hiring of visitors to work without proper visa

• It is an offence to employ any illegal worker and the employer will be liable to pay a fine of $ 350,000 and jail for three years.




• Preparing drawings and specifications for architectural, structural plumbing, heating, electrical and other mechanical work– Negligence: inadequate thermal insulation

leads to fire

• Preparing cost estimates– Negligence: numerical error



• Obtaining bid from contractors– Fraud: alter a bid to favour a contractor

• Inspecting the contractor’s work on regular basis– Negligence: failing to note an unsatisfactory

change (e.g. 1981 Kansas City Hyatt failure)

• Keeping accurate books and records– Breach: failing to do and submit when

required


• Assisting in presentation of a project before bodies possessing approval-disapproval power – Fraud: falsely claim that lower level

authorities approval

• Contract promised X meeting, only had Y– breach




• Preparing as-built drawings which show construction changes and final locations of mechanical and electrical lines– Negligence: incorrectly locating buried

electric line leading to later excavation accident

• Issuing certificates of payment– Negligence: failing to verify work was

performed

• And many more… …


Question: Is it good to use these expressions in contracts and agreements?

• High quality reports

• The highest level of quality

• Highly trained professionals

• All existing information will be gathered

• Only the best

• Guarantee successful project completion

• … …


Avoid using these expressions in contracts and agreements

• Reference:W.M. Hayden, Jr. Quality by Design Newsletter, May 1987


Basic Legal Definitions

• Refers to some fundamental principles of law that govern the way in which power is exercised in Hong Kong

• Law as expressed in legislation and judicial decisions made by independent courts

• Legality and equality before the law are two fundamental facets of the rule of law

Rule of Law in Hong Kong


Basic Law 基本法• Ensures that the legal system in the

HKSAR will continue

• Will continue to give effect to the rule of law (i.e. the common law, rules of equity, ordinances, subordinate legislation and customary law)


Classification of law (1)

• Common law普通法 – made by judges applying the same rules to everyone

• Statue law 成文法– laid down by an Act of Legislative Council in HK

• Codified Law – basic principles contained in “code”

• Public law – regulates the relationship between legal individuals and the state


Classification of law (2)

• Private law – regulates the relationship between legal individuals

• Criminal law刑事法 – regulates behavior that the society considers to be wrong

• Civil law民事法 – resolves all matters that are not a crime

http://www.doj.gov.hk/chi/legal/

http://www.doj.gov.hk/chi/legal/

26

Courts of Justice in Hong Kong• Court of Final Appeal 終審法院• High Court (Court of Appeal + Court of first instance)• District Court ( 區域法院 ) • Magistrates Court ( 裁判法院 )

– 判刑上限为监禁两年和罚款 10 万港元 • Coroner’s Court 死因裁判法庭• Juvenile Court 少年法庭• Tribunals –土地審裁處 Lands, Labour, Small

Claims etc

http://www.doj.gov.hk/eng/legal/

http://www.doj.gov.hk/eng/legal/


Basic Legal Definition of Concern

Civil Law

- involves actions against individual or groups of individuals less than the general public

- brought by a plaintiff 原告 against defendant 被告

- a claim of a committed civil wrong

- compensation for a loss suffered or prevention of a loss from being suffered

Civil law case example

• http://legalref.judiciary.gov.hk/lrs/common/ju/ju_frame.jsp?DIS=77734&currpage=T

• http://legalref.judiciary.gov.hk/lrs/common/ju/ju_frame.jsp?DIS=76855&currpage=T



Contract Law

• The Law of Contract (9th ed. Sweet & Maxwell, London, 1995):

• A contract is an agreement giving rise to obligations that are enforced or recognised by the law

• Both the common law and statutory laws have application to contracts

Contract• Contract is an agreement between two or more

parties that creates for each party a duty to do something or not to do something

• Breach of contract refers – A party’s failure to perform some contracted-for or

agreed upon act, or– Failure to comply with a duty imposed by law

which is owed to another or to society



Contract Law - terms

• An offer: an expression of willingness to contract on a specific set of terms, made by the offeror with the intention that, if the offer is accepted, he or she will be bound by a contract.

• Acceptance: the act of agreeing to an offer: an essential element in the formation of a contract

• Consideration:each party to the contract must receive something of value


Contract Law - terms

offeror oferee

offer

acceptance

Source: ML Barron and RJA Fletcher, Fundamentals of Busness Law, 4th ed. McGraw Hill


6 elements of a contract1. Intention to create a legal relationship:

The parties to the contract must intend their agreement to be legally enforceable

2. Offer and acceptance:

There must be an offer made by one party and an acceptance of that offer by another.

3. Form and/or consideration:

Consideration can be defined as mutual promise. Both parties must provide consideration. A contract lacking consideration may be valid if it is in the form of a deed



6 elements of a contract4. Capacity of parties:

The parties to a contract require capacity or ability to contract. Some people are under a disability when it comes to making contracts (e.g. minors); their capacity to contract is restricted.

5. Reality of consent:It is necessary that the parties to a contract genuinely consent

to the making of a contract. Their consent must be genuine and not given because of misrepresentation, duress 強迫 or undue influence

6. Legality of objectThe purpose or object of a contract must be legal. Cannot

contract to do something illegal



Examples• Octopus card selling users’ information – a

breach of contract?

• When you apply for a credit card – is there a contract between you and the card company?

• When you bidding in ebay/yahoo – is it a contract? Who is the offeror?


Example

• KCRC and Siemens’ contract related to the communication system when building the West Rail

• Siemens was behind schedule but at the end receiving an addition of 100 millions from KCRC for settling the case


Contract law examples

• 英皇教育控告范浩揚違約的官司於高等法院正式開審，經過多輪官司後，同年 7 月 15 日高等法院判范的一方敗訴，需要賠償拖欠英皇教育一方之 880 萬 ( 扣除范應得的利潤連利息，實際只需賠 580 萬 ) 。

• 後來范浩揚於 2010 年 6 月 9 日向高等法院上訴庭提出上訴，但不足兩小時被上訴庭駁回，范得知判決後表示不會再上訴，而英皇教育一方則表示會追討范浩揚的賠償，相信范需賠償和付堂費逾千萬


Tort ( 侵權行為 )- A tort is a civil wrong as opposed to a criminal wrong

(crime is a wrong against society that results in an offender being punished)

- an offense against an individual in the form of injury to his/her personal or property rights

- actions arise from duties and natural rights which exist between parties

- proof of intent may not be important


Tort (2)

Three elements must be proven in a tort action

- the defendant owed the plaintiff a duty,

- the duty was breached by the defendant, and

- the damage resulted from the breach of this duty


Tort (3)

Tort due to negligence is defined as

- the omission to do something

which a reasonable man guided by those ordinary considerations or

which ordinarily regulated human affairs would do

- negligence is present if harm could have been foreseen and prevented


Tort of negligence

• Negligence as a tort is the breach of a legal duty to take care which results in damage, undesired by the defendant, to the plaintiff. (Winfield and Jolowicz on Tort, Sweet and Maxwell, London, 1994)

Defendant PlaintiffDamage suffered

Duty of care owed

Breach of duty of care


Tort vs Crime

• Tort– Aims to compensate– Action commenced by

individuals– Mental element may

not be required– Outcome is a remedy

for plaintiff– Perpetrator called a

tortfeasor

• Crime– Aims to punish– Action commenced by

government– Mental element

usually required– Outcomes is

conviction or release of offender

– Perpetrator 行兇者 called an offender

Case studies



Case Example (Torts)

• McDonald’s hot coffee case

• An 81-year old woman received third degree burns from spilled coffee purchased from the restaurant chain and sued to recover her costs. The coffee that patrons bought at the drive-through, it turns out, was heated to be much hotter than the coffee they served inside was.


Case Example (Torts) (answer)

• Court Decision: – The jury found the conduct of McDonald's so

objectionable that they not only awarded her compensatory damages, but awarded the woman millions of dollars in punitive 懲罰的 damages.

– The punitive damages were later significantly reduced by a judge on appeal, though this fact is not as widely known as the jury's initial decision.

IP

• Intellectual Property protected in HK


Intellectual Property protected in HK


Types of subject-matterNormally protected

Whether registrationis required foreffective protection inHKSAR

Enforcementavailable in HKSAR

Trade Marks trade or servicenames and logos

Yes Civil , Criminal

Patents invention Yes Civil

Designs industrial productdesign, fabric design

Yes Civil

Plant varieties

new agricultural orhorticultural varieties

Yes Civil

IC designs Layout designs of IC No Civil

copyright literature, drama,music, photographs,computer software,films, phonograms,broadcasts, cablediffusion

No Civil, criminal

Offences against intellectual property

• Selling goods with counterfeit trade marks

• Trading in pirated music, video or computer software

• Showing films in public without the right-owner’s permission


Protection

• IP laws are domestic – A right given under HK only applies in HK

• Various international conventions require member countries or economies to recognise rights of persons from other member countries– Paris convention for protection of industrial

property


What is a trade mark

• A mark or logo used by businesses to identify the goods in which they trade or the services they provide in the course of business

• Can be either registered or unregistered

• Trade mark obtained in China does not automatically get protection in HK


Trademarks

• iPad

• LACOSTE and Crocodile

• Wing Wah Moon Cake

• More ….


Patents

• Patents protect technical innovations• Exclusive right to the inventor of an invention to

make use or put the invention to the market• New, involves an inventive step and is capable of

being industrially applied can be patented• Patents granted in HK only get protection in HK• Patents have a time period: 20 years or 8 years

(short term)


Copyright

• Product of human creativity– Books, music, films, computer software etc– Materials available to the public on the

Internet also involve copyright• There are no formalities required to obtain

copyright protection for works in HK. Works of authors from any place in the world, or works first published anywhere in the world, qualify for copyright protection in HK


Copyright

• Infringement – such as selling photocopies of textbook– Maximum fine of HKD$50,000 and

imprisonment of up to 4 years


Others

• Registered designs– Fabric patterns, outward appearance of

watches, toys or mobile phones

• Layout design of integrated circuits

• Plant varieties – Plant breeders’ right



Legal Dimension (1)

Engineers owe well-defined duties

•under the law of contract to their immediate clients, and

•under the law of tort to those persons whom they should reasonably have in contemplation as likely to suffer injury or loss as a result of acts of negligence.


Legal Dimension (2) – think problem

• Why do engineers owe duties to the public?

• Why the above duties are not likely in general enforceable to engineers by law of contract and/or torts negligence on behalf of members of the public?

• How can individual and engineering ethical code act as legal backing to ensure engineers to observe the above duties to the public?

Check HKIE & ICAC Ethics in Practice

Final remark

•Legal = moral?



Morality and law1

• To discharge one’s legal responsibilities is not necessarily to discharge one’s moral responsibilities;

• Morality and law share concerns over matters of basic social importance and often have in common certain principles, obligations and criteria of the evidence.

• Law is the public’s agency for translating morality into explicit social guidelines and practices and for stipulating punishments for offenses.

1Business law & Ethics, Pearson; ethical theory and business practice, Ethical Theory Business, Beauchamp & Bowie


Morality and Law (cont’d)• Moral evaluation needs to be distinguished from

legal evaluation – ‘Let the lawyers decides; if it’s legal, it’s moral’

• Despite an intersection between morals and law, the law is not the sole repository of a society’s moral standards and values, even when the law is directly concerned with moral problems.– something is legally acceptable doesn’t imply that it is

morally acceptable. E.g.– The doctrine of employment at will permits employers to

fire employees for unjust reasons and is (within certain limits) legal, yet such firings are often morally unacceptable.


Morality and law (cont’d)

• The courts have often been accused with some justification of causing moral inequities through court judgements rendered against corporations; – E.g. Although whooping cough vaccine

indisputably reduces the risk of this disease for children who receive the vaccine, almost no manufacturer will produce it for fear of costly lawsuits brought under product liability laws


The rule of conscience 良心• ‘let your conscience be your guide’ has

long been what morality is all about

• But consciences vary radically from person to person and time to time

• The reliability of conscience is then not self-certifying

• Moral justification must be based on a source external to conscience.

Points to consider

• Law related to your project – Environment license etc– The right of the project is protected by which

law

• Legal action taken by, or against the project– The company suing or sued by anyone?


the hong kong polytechnic university 1 legal dimension society and the engineers

Documents

hong kong court

ernst young hong kong

legal dimension9

legal dimensionsociety

legal considerationsbreach

legal implications

legal counsel

rd young