Transcript
INTRODUCTION TO TORT LIABILITY – CHAPTER 4 Ryerson University Law and Ethics in Engineering Practice Andrew Wong, B.A. Sc., L.L.B. P2Z_3494793.7 1 Summary Different Types of Legal Obligations Different Types of Tort Liability Tort Liability – Introduction – Fundamental Purpose – Principles of Negligence – Balance of Probabilities – Duty of Care – Standard of Care – Damages – Development of Tort Law – Strict Liability – Vicarious Liability – Concurrent Tortfeasors 2 1 Summary (cont’d) Product Liability Duty to Warn Economic Loss Case Study Summary 3 Different Types of Legal Obligations legal obligations and the corresponding responsibilities may arise in different ways – contractual: parties voluntarily assume legal obligations engineer enters into service agreement with client engineer provides drawings and specifications to client as a part of the service 4 2 Different Types of Legal Obligations (cont’d) client pays a fee to engineer for the performance of the service their relationship is governed by the provisions in the agreement – statutes: legislation imposes obligations Criminal Code: do not steal Construction Lien Act: retain statutory holdback from payments 5 Different Types of Legal Obligations (cont’d) – tort: obligations based on the relationship between the person who owes the duty and the person to whom the duty is owed a civil wrong, other than a breach of contract, which the law will redress by an award of damages types of relationships 6 3 Different Types of Tort Liability Defamation: reputation of the plaintiff is damaged by untrue statements publicly made by the defendant – libel: statements made in writing – slander: statements are verbal 7 Different Types of Tort Liability (cont’d) Nuisance: alleviate undue interference with the comfortable and convenient enjoyment of the plaintiff’s land Negligence: harm is caused to the plaintiff through conduct of the defendant that falls short of what is expected of a “reasonable person” in similar circumstances 8 4 Introduction private or civil wrong or injury, that may arise independently of contract – no contract is required for tort liability to exist – does not specifically deal with Criminal Code of Canada tort liability and liability for breach of contract can both occur 9 Fundamental Purpose compensate victims of torts – put the plaintiff in the same position he or she would have been in, if the tort had never been committed punishment is not a purpose of tort law – if the circumstances of the tort also constitute criminal activities, punishment of the criminal would be governed by the Criminal Code of Canada 10 5 Fundamental Purpose (cont’d) compensation: civil proceedings – claim commenced by one person (the plaintiff) against another person (the defendant) – case must be proven by the plaintiff “on a balance of probabilities” punishment: criminal proceedings – person is charged by the crown – case must be proven by the crown “beyond a reasonable doubt” 11 Fundamental Purpose (cont’d) pool of money to fund valid claims by victims – professionals: lawyers, engineers, architects – engineers commonly obtain professional liability insurance 12 6 Fundamental Purpose (cont’d) – amount and coverage will depend on the type of services and size and magnitude of projects – exclusions to insurance coverage 13 Principles of Negligence a plaintiff in a negligence action must prove on a “balance of probabilities” that: – the defendant owed the plaintiff a duty of care – the defendant breached that duty of care by his or her conduct (i.e. did not meet the “standard of care”) – the damages suffered by the plaintiff are caused by the defendant’s breach of the duty of care 14 7 Balance of Probabilities plaintiff must present evidence to show that its case is more probable than the defendant’s case – “more likely to be true” contrast to criminal cases which are generally based on proof beyond a reasonable doubt – higher standard – “no reasonable doubt” in the mind of a reasonable person that accused is guilty 15 Duty of Care “neighbour principle” - generally, every person owes a duty to take reasonable care not to cause injury to persons whom they ought reasonably anticipate would be injured by their act or omission 16 8 Duty of Care (cont’d) Who constitutes your “neighbour”? – persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am considering the acts or omissions which are being called into question 17 Duty of Care (cont’d) When an engineer enters into a contract for services with a client, she thereafter has a duty to the client under both – Contract; and – Tort law 18 9 Duty of Care (cont’d) Does the defendant owe a duty of care to the plaintiff? – first, do the facts at hand fit within a category of relationships that the courts have already held give rise to a duty of care? – if no, is the relationship between the plaintiff and defendant one that should give rise to a duty of care? 19 Duty of Care (cont’d) Paxton v. Ramji – Facts: doctor prescribed acne drug to the mother the acne drug carried the risk of causing fetal malformation doctor was aware that the father had a vasectomy the vasectomy failed and the baby was conceived 20 10 Duty of Care (cont’d) the baby was born with considerable damage caused by the acne drug the baby sued the Doctor for negligence in prescribing the acne drug – Issue: did the Doctor owe a duty of care to the baby before conception not to prescribe the acne drug? 21 Duty of Care (cont’d) – Decision: the court held that the Doctor did not owe a duty of care to a future child the Doctor would be put in an impossible conflict of interest position between the best interests of the future child and the best interests of the patient the Doctor cannot advise or take instructions from a future child 22 11 Standard of Care once a duty of care is found to exist, the question then becomes whether the defendant’s conduct breached the “standard of care” this is the skill, care and diligence expected of a reasonable person exercising ordinary intelligence and prudence the standard is one of reasonableness, not perfection 23 Standard of Care (cont’d) Young v Bella – Facts: university student studying to become a social worker forgot to footnote a case study in her term paper professor speculated that the case study might be a personal confession of the student to having sexually abused children professor filed a report with Child Protective Services and brought her concerns up with the Director of the Faculty, who discussed with RCMP and at least ten external social workers student was not informed until two years later, at which time she sued for irreparable damage to her chosen career prospects 24 12 Standard of Care (cont’d) – the court found that a duty of care exists between a professor and his or her students – Issue: did the professor’s conduct in reporting her suspicion of child abuse fall below the standard of care expected of a reasonable person in the circumstances? the professor discussed concerns of plagiarism with the student but never mentioned her concerns that the case study was autobiographical 25 Standard of Care (cont’d) – Decision: court found in favour of the student a professor is “required to take the necessary care to get their facts straight before taking a potential career-ending action in relation to a student” 26 13 Standard of Care (cont’d) Standard of care expected of an engineer – professionals cannot escape liability by performing merely up to the capacity of the ordinarily prudent lay person – an engineer owes a duty to exercise the skill, care and diligence reasonably expected of a reputable member of the profession practicing in the same or similar locality under similar circumstances 27 Standard of Care (cont’d) Locality Rule – conduct of the defendant is judged on the basis of the conduct exhibited by a reasonable person “in like circumstances” – location of the service may be one of the relevant circumstances – if the service was performed in an area with limited access to facilities, equipment and specialists then the defendant will be asked to do what the reasonable person so limited would have done ex. MD’s in remote communities 28 14 Standard of Care (cont’d) Paxton v. Alameda County (California, 1953) – Facts roofer injured while applying tar and gravel surface to a pavilion roof files action against the architects who designed the pavilion – Issue: did the architect use the care ordinarily exercised in like case by reputable members of his profession practicing in the same locality? – Decision architect’s computations were in accordance with standards of good practice in his profession and his community—there was no basis for negligence even if there were mistakes in 29 his computations. Standard of Care (cont’d) Paxton v. Alameda County (California, 1953) – Locality Rule design professional must exercise the appropriate "learning, skill and care ordinarily possessed and practiced by others in the same profession in the same locality, at the same time." 30 15 Standard of Care (cont’d) Generalists v. Specialists – where professionals are, or hold, themselves out to be specialists they will be subject to a higher standard – this is consistent with the expectations of clients – “what would the reasonably competent generalist have done” versus “what would the reasonably competent specialist have done” 31 Standard of Care (cont’d) Higher Risk implies a Higher Standard of care – similar to the higher standard imposed on specialists, where an engineer takes on a project where the potential for harm is high, a higher standard of care is required. – McAlister v. Stevenson: “A reasonable man need not show the same anxious care when handling a pound of butter as he would a pound of dynamite.” 32 16 Standard of Care (cont’d) Inexperience – should new, inexperienced engineers be subject to a lower standard then those with average experience in their field? – courts have generally held that inexperience is not a defence to a claim of negligence 33 Standard of Care (cont’d) Roy v. Thiessen – Facts Thiessen is a 24-year-old hockey player with little experience constructing residential houses who acts as a general contractor. purchasers of Thiessen’s house bring an action against him for damages for negligent construction. – Decision “the standard of care is not one that varies from house to house based on the age, education or experience of the contractor. If it were otherwise, every purchaser would have to determine the competence of the original contractor before purchasing a building.” 34 17 Standard of Care (cont’d) Time – judged by the professional standards prevailing at the time the work was done, not by what may be known or accepted at a later date 35 Standard of Care (cont’d) No Guarantee of Success – engineers do not guarantee that their work will be successful – provided they have satisfied the standard of care, the fact that the work proves unsatisfactory in some way will not render them liable in negligence 36 18 Standard of Care (cont’d) Trizec v. EllisDon – Facts: Trizec, a real estate developer, was building “Banker’s Hall”, an office building in Calgary Trizec hired a geotechnical engineering firm, Hardy BBT Limited to assess soil conditions prior to construction the general contractor, EllisDon, relied on Hardy’s assessment during construction however, Hardy’s assessment was incorrect 37 Standard of Care (cont’d) Trizec v. EllisDon (cont’d) – Facts (cont’d): as a result, the project had to be completed with one less level of underground parking and was delayed 116 days Trizec sued Hardy in negligence – Issue: did Hardy breach its standard of care? 38 19 Standard of Care (cont’d) Trizec v. EllisDon (cont’d) – Decision: although Hardy’s assessment was incorrect, it did meet the standard of care and was not negligent the standard of care in this case was that of a reasonable geotechnical engineer, not one of perfection Hardy was not liable to Trizec for damages 39 Standard of Care (cont’d) Errors in Judgment vs. Negligence – it is sufficient if an engineer follows an accepted body of professional opinion, even though there may be a substantial body of opinion to the contrary, provided the engineer chooses the school of opinion with reasonable competence 40 20 Standard of Care (cont’d) Substantiating Negligence – determination if there was a breach of the duty of care based on an examination of the facts in light of the applicable standard of care to be followed – look at the circumstances and expert testimony 41 Standard of Care (cont’d) Contract: provisions in the agreement may alter these usual duties – increase the expectations – agree to exercise a higher standard of care than that imposed by law – guarantee their work will produce a specified result – undertake to exercise a degree of competence of the most specialized and trained members of the profession 42 21 Damages Seminal case from England (1932) Donoghue v. Stevenson – plaintiff became ill after consuming a bottle of ginger beer given to the plaintiff by a friend – the bottle reportedly contained a decomposed snail – there was no contract between the plaintiff and the manufacturer 43 Damages (cont’d) – the court held that the manufacturer was under a legal duty to the ultimate consumer to take reasonable care that the ginger beer was free of defect likely to cause injury or death – the court provided a remedy to those who suffer property damage or personal injury as a result of the careless acts of others 44 22 Damages (cont’d) Concept of Forseeability – the losses or injuries sustained by the plaintiff must not be “too remote” a consequence of the impugned conduct – the courts ask if it was “reasonably forseeable” that the harm to the plaintiff would have been caused by the conduct of the defendant 45 Damages (cont’d) Forseeability (cont’d) Barron v Barron – Facts: a man drinking coffee while driving chokes on the coffee and crashes the car his wife, the passenger at the time of the crash, sues for injuries sustained – Issue: was the crash a reasonably forseeable consequence of drinking coffee while driving? 46 23 Damages (cont’d) Barron v Barron (cont’d) – Issue (cont’d): would your answer be different if the husband had a history of coughing and choking when drinking coffee? – Decision: because of the husband’s well documented history of coffee-induced coughing and choking leading to reduced control of his vehicle, the courts found in favour of the wife 47 Damages (cont’d) Economic Loss: – Donoghue v. Stevenson did not deal with economic loss – economic loss: financial or business losses (e.g., loss of profits, costs of repair, loss in value) 48 24 Damages (cont’d) Hedley Byrne – Facts: plaintiffs are advertising agents who asked their bankers to inquire on the credit rating of a business associate the defendant bankers negligently reported that the credit rating of the business associate was favourable the plaintiffs did business with the business associate relying on the advice of the bankers as a result, the plaintiffs lost money 49 Damages (cont’d) – Decision: the court held that when one person relied on a special skill of another, the second person knew of that reliance then the second person was duty bound to take reasonable care in exercising the special skill 50 25 Damages (cont’d) – Relevance: Scope of Damages – tort law traditionally provided relief where damages to person or property had occurred – Hedley Byrne expands the scope of damages to include financial loss that results from the negligent advice Special Skills 51 Development of Tort Law Application of Hedley Byrne to engineers Edgeworth Construction Ltd. v. N.D. Lea – Facts: contractor successfully bids on a contract to build a section of highway contractor suffers financial loss allegedly due to errors in the drawings prepared by the engineers contractor sues engineer for negligence claiming that it had reasonably relied on the drawings in preparing its bid and in executing the work there was no contract between contractor and engineer 52 26 Development of Tort Law (cont’d) – Decision: court held that the engineers could be liable in tort to the contractor since – the engineers undertook to provide the information to the bidders for the work – the purpose of supplying the information was to allow the bidders to prepare a price to be submitted to the owner, which the engineers knew – the contractor relied on the information to prepare the price, the reliance was reasonable 53 Development of Tort Law (cont’d) Winnipeg Condo v. Bird Construction – Facts: building constructed in 1974 by Bird Construction for Tuxedo Properties Co. Tuxedo used the building as apartments until 1978 when they sold them as condos, at which point the building owner became Winnipeg Condo Corporation #36 in 1989, a section of the wall cladding fell the condo corporation then sued Bird 54 27 Development of Tort Law (cont’d) – Issue: there was no contract between the condo corporation and Bird, so they cannot sue in contract law. Is there a duty of care owed by a builder to subsequent purchasers? – Decision: it was reasonably foreseeable to Bird that if they constructed negligently, subsequent purchasers might suffer damage therefore, the court held that a contractor has a duty in tort to subsequent purchasers. 55 Strict Liability does not necessarily apply the concept of fault defendant may be responsible for unintentional, non-negligent harm 56 28 Strict Liability (cont’d) Example: – worker’s compensation legislation fault is not necessary for compensation to be provided employers pay premiums into a fund based on the salaries of their employees employees receive compensation notwithstanding fault 57 Vicarious Liability liability is based on the relationship between the parties one person is responsible for the misconduct of another person because of the relationship between them 58 29 Vicarious Liability (cont’d) employer is liable for the negligent performance of an employee consistent with fundamental purpose of tort law – compensate the injured party 59 Vicarious Liability (cont’d) presumably employer is in a better financial position than the employee “deep pockets theory” – employer has deep pocket of funds from which an injured party will more easily obtain compensation 60 30 Vicarious Liability (cont’d) argued that vicarious liability is fair since it places losses which are created by an activity on the person who profits from it (i.e., the employer) employer is arguably in a better position to mitigate the losses through insurance or pricing of the services encourages care in the selection and supervision of employees 61 Vicarious Liability (cont’d) Dutton v. Bognor – Facts: house is built with inadequate foundations building by-laws required the foundations to be approved by a local building inspector the building inspector failed to make a proper inspection before providing the approval the house falls down 62 31 Vicarious Liability (cont’d) – Decision: the court holds the contractor liable to the home owner for the improper foundations the building inspector was liable since he failed to carry out a proper inspection the building inspector’s employer was also held vicariously liable for the failure of the building inspector the building inspector is personally liable and the employer is also vicariously liable for the failure of the building inspector 63 Vicarious Liability (cont’d) vicarious liability will only be imposed on employers for acts of their employees, not for acts of independent contractors 671122 Ontario Ltd. V Sagaz Industries – Facts: Sagaz, a designer of automobile seat covers, hires a consultant, Stewart Landow, to assist in marketing its seat covers Landow bribes the head of Canadian Tire’s automotive division 64 32 Vicarious Liability (cont’d) – Facts (cont’d): because of the bribe, Canadian Tire terminated its supply relationship with Design Dynamics in order to carry Sagaz’s product when the bribe was discovered, Design sued Landow as well as Sagaz, as Landow’s employer – Issue: should Sagaz be vicariously liable for the conduct of Landow? 65 Vicarious Liability (cont’d) – Decision: Sagaz was not vicariously liable for Landow’s conduct the central question is whether the person engaged to do the work is performing them as a person in business on his own account consider: (1) the degree of control over the worker; (2) ownership of tools; (3) who has the chance of profit; (4) who bears the risk of loss 66 33 Concurrent Tortfeasors more than one party is liable in tort District of Surrey v. Carroll-Hatch – Facts: architect designs a police station architect hires engineers to provide structural designs for the police station building is structurally damaged due to settlement problems which could have been avoided if proper soil tests had been conducted 67 Concurrent Tortfeasors (cont’d) – Decision: both the architect and the engineer were held liable to the owner – they had breached their duty to warn the owner that proper soil tests should have been taken the architect and the engineer were concurrent tortfeasors the court apportioned liability to the architect (60%) and the engineer (40%) 68 34 Product Liability Product liability law is governed by both the law of contract and the law of tort Contract – persons who purchase goods from sellers and are unhappy with their product or are injured by it may be able to utilize warranties provided for by legislation – sale of goods legislation may imply condition into the contract – e.g., the goods will be merchantable and fit for their intended purpose 69 Product Liability (cont’d) Tort – Applicability to Engineers Donoghue v. Stevenson: duty of care is owed to all reasonably foreseeable victims of the defendant’s negligent conduct duty extends to all purchasers and other foreseeable users and consumers of the product, whether they purchased it or not duty will be owed to third parties who are injured by the malfunctioning of a defective product 70 35 Product Liability (cont’d) intermediate examination: liability of the manufacturer will usually follow if a product is used by the consumer without the possibility of intermediate examination contributory negligence could apply where the user could have, or did, examine the product before use 71 Duty to Warn some products are inherently dangerous manufacturers have a duty to warn consumers of the appropriate use of the product or the risks associated with its use 72 36 Duty to Warn (cont’d) duty to warn extends not only to dangers which are inherent in the ordinary, intended use of a product, but to risks which flow from the foreseeable use of the product, even if such use was not intended by the manufacturer however, there need not be warnings of a risk of danger which is “so obvious and apparent that anyone would be aware of it” 73 Duty to Warn (cont’d) Ho Lem v. Barotto Sports – Facts: hunter purchased a shot-shell reloading machine he did not follow instructions during the use of the machine hunter was injured hunter commences claim against the manufacturer 74 37 Duty to Warn (cont’d) – Decision: court held that adequate instructions for use had been given to the hunter the hunter did not win the case since he had not followed the instructions of the manufacturer manufacturer had satisfied its responsibilities by providing an adequate warning damages not caused by the manufacturer’s failure to warn but were instead caused by the hunter’s failure to follow the manufacturer’s instructions 75 Economic Loss economic loss: financial or business losses (e.g., loss of profits, costs of repair, loss in value) 76 38 Economic Loss (cont’d) Duty to Warn: Rivtow Marine – Facts: barge operators fitted a crane onto their barge it was discovered that the manufacturer did not warn the barge operators of a defect in the crane defect in the crane would lead to cracking and collapse 77 Economic Loss (cont’d) – Decision: Court held that the manufacturer was under a duty to warn the barge operators of the defect once they became aware of it manufacturers were liable to the barge operators for the economic loss attributable to the failure to warn – they were liable for lost profits while the crane was out of service for repairs 78 39 Economic Loss (cont’d) Economic Loss dependent on Property Damage suffered by third parties: CN Railway v . Norsk – Facts: a tug boat operator negligently allowed the barge it was towing to collide with a railroad bridge owned by the Crown in addition to the Crown’s claim for damage caused to the bridge, the railway companies which used the bridge sued the tug boat operator for economic loss as a result of not being able to use the bridge 79 Economic Loss (cont’d) – Decision courts are generally concerned about allowing economic loss claims since they may lead to indeterminate and unlimited liability the court in this instance was satisfied that there was sufficient “proximity” between the tug boat operator and the railway company to justify liability 80 40 Economic Loss (cont’d) the tug boat operator ought to have foreseen the economic loss that would result from damage to the bridge, given the need for the railway company to reroute traffic during repairs 81 Economic Loss (cont’d) Product Liability: Winnipeg Condo v. Bird Construction – economic loss is recoverable – the cost of repairing the defects and correcting the dangerous cladding – it was reasonably foreseeable that a defect in the construction would pose a risk of danger to a subsequent purchaser or user of the building 82 41 Case Study Facts: – Jeans Unlimited (the seller of jeans) enters into a contract with an architect to prepare complete drawings and specifications for the construction of a new store in Toronto – the drawings and specifications include structural engineering designs – the architect contracts with an engineer to prepare the structural drawings and specifications – Jeans Unlimited is not a party to this contract 83 Case Study (cont’d) – a recent graduate hired by the structural engineering firm prepared the structural designs – not having a lot of experience with the applicable structural design requirements, the recent graduate did not pay attention to all the details 84 42 Case Study (cont’d) – a professional engineer in the engineering firm reviewed the recent graduate’s work – the professional engineer considered the design satisfactory even though the professional engineer did not perform a detailed check 85 Case Study (cont’d) – nine months after the jean store opened, the roof collapsed during a snow storm – an engineering expert was retained by Jeans Unlimited to conduct an investigation into the collapse of the roof 86 43 Case Study (cont’d) – the engineering expert provided a report to Jeans Unlimited in the engineer’s expert opinion, the structural support system for the roof was inadequately designed the support system for the roof did not take into account snow load criteria required by applicable design requirements if the applicable design requirements had been complied with the roof would not have collapsed 87 Case Study (cont’d) Question – What liabilities in Tort Law may arise? – What is the likely outcome? 88 44 Case Study (cont’d) Discussion – Project Structure typical for an owner to directly hire an architect to prepare complete architectural and engineering drawings and specifications the architect will then directly hire the engineers as subconsultants the owner does not usually have a contract with the engineers 89 Case Study (cont’d) – Fundamental Purpose of Tort Law compensate a party that has suffered damages as a result of a negligent act or omission – Tort liability can arise even where there is no contract – will not address the contractual relationships in this answer 90 45 Case Study (cont’d) – likely that plaintiff is Jeans Unlimited and defendant is engineering firm and engineers – plaintiff must prove the three requirements on a “balance of probabilities” – duty of care, breach of the duty of care and damages 91 Case Study (cont’d) – Duty of Care engineer and engineering firm ought reasonably anticipate that Jeans Unlimited would be relying on their designs in the construction of the store and would be injured by their negligent act or omission – Standard of Care the court would look at the expert testimony to determine what the reasonable degree of skill, care and diligence would be of the engineer of ordinary competence 92 46 Case Study (cont’d) in this instance the engineer failed to take the snow load criteria into account on the facts, the engineer breached the standard of care 93 Case Study (cont’d) – Damages damages were incurred since the inadequately designed roof collapsed damages include the cost of repairing the store and the economic loss arising from the store being closed 94 47 Case Study (cont’d) – Vicarious Liability the engineer is personally liable and the engineering firm will be held liable for the negligence of its employees based on the “deep pockets” theory this is consistent with the theory behind tort law to compensate the injured party engineering firm will contact its professional liability insurance company 95 Summary people have various liabilities and corresponding responsibilities – contractual and tort tort is based on relationships between parties and does not require a contract fundamental purpose is to compensate the injured party must establish: duty of care, breach of the duty of care and damages caused by the breach concurrent tortfeasors vicarious liability 96 48 Conclusion • Questions? 97 49
