Tort Law: Vicarious Liability Douglas Wilhelm Harder, M.Math. LEL Department of Electrical and Computer Engineering University of Waterloo Waterloo, Ontario, Canada ece.uwaterloo.ca dwharder@alumni.uwaterloo.ca © 2013 by Douglas Wilhelm Harder. Some rights reserved.

Outline An introduction to the engineering profession, including: Vicarious Liability Outline An introduction to the engineering profession, including: Standards and safety Law: Charter of Rights and Freedoms, contracts, torts, negligent malpractice, forms of carrying on business Intellectual property (patents, trade marks, copyrights and industrial designs) Professional practice Professional Engineers Act Professional misconduct and sexual harassment Alternative dispute resolution Labour Relations and Employment Law Environmental Law

Vicarious Liability Employee Performance Suppose an employee is negligent and someone is harmed as a result Who is responsible for the tort?

Vicarious Liability Inspections Consider the case of Dutton v Bognor Regis United Building Co. Ltd., 1972 A house was built on a rubbish deposit This will result in settling, but this can be dealt with through larger foundations By-laws required that the foundation be approved by a building inspector The inspector failed to make an proper inspection Part of the building collapsed

Vicarious Liability Inspections In Dutton v Bognor Regis United Building Co. Ltd., 1972, the court found The inspector was responsible The local building authority, however, was liable for the damages

Vicarious Liability Inspections In Dutton v Bognor Regis United Building Co. Ltd., 1972, the court found “It is at this point that I must draw a distinction between the several categories of professional men. I can well see that in the case of a professional man who gives advice on financial or property matters—such as a banker, a lawyer or an accountant—his duty is only to those who rely on him and suffer financial loss in consequence. But in the case of a professional man who gives advice on the safety of buildings, or machines, or material, his duty is to all those who may suffer injury in case his advice is bad.”

Vicarious Liability Inspections In Dutton v Bognor Regis United Building Co. Ltd., 1972, the court found “If [an engineer] designs a house or a bridge so negligently that it falls down, he is liable to everyone of those who are injured in the fall: see Clay v A.J. Crump & Sons Ltd. None of those injured would have relied on the architect or the engineer. None of them would have known whether an architect or engineer was employed or not. But beyond doubt, the architect and engineer would be liable. The reason is not because those injured relied on him, but because he knew, or ought to have known, that such persons might be injured if he did his work badly.”

Vicarious Liability Inspections In Dutton v Bognor Regis United Building Co. Ltd., 1972, the court determined the council would bear the loss: “First, Mrs. Dutton has suffered a grievous loss. The house fell down without any fault of hers. She is in no position herself to bear the loss. Who ought in justice to bear it? I should think those who were responsible. Who are they? In the first place, the builder was responsible. It was he who lid the foundations so badly that the house fell down. In the second place, the council’s inspector was responsible. It was his job to examine the foundations to see if they would take the load of the house. He failed to do it properly. In the third, the council should answer for his failure. They were entrusted by Parliament with the task of seeing that houses were built properly. They received public funds for the purpose... Their shoulders are broad enough to bear the loss.”

Vicarious Liability Vicarious Liability Vicarious liability is the doctrine that an employer is liable for the negligent performance of an employee Therefore, if an employee in his or her role has a duty of care to another party and that employee breaches that duty of care, the employer will be vicariously liable for any damages

Vicarious Liability Vicarious Liability The overriding point is that the injured party should be compensated for the harm, and the employer is most suited to ensure this occurs Consequently, any engineers employing others should obtain adequate professional insurance

Vicarious Liability Employee Liability Employees, however, can also be liable in tort, as in Northwestern Mutual Insurance Co. v J.T.O’Bryan & Co., 1974, where: An insurance company asked the agent O’Bryan to remove an unused warehouse that had already been vandalized from a policy, a request that is standard in the industry The first request by letter was dated January 12th, 1970 After two letters followed by two weeks of telephone calls, finally, an employee of the agent assured Northwestern that the risk would be removed and later was removed

Vicarious Liability Employee Liability Employees, however, can also be liable in tort, as in Northwestern Mutual Insurance Co. v J.T.O’Bryan & Co., 1974, where: Had the employee said nothing, or had the employee given a disclaimer, Northwestern would have simply cancelled the policy themselves Northwestern was required to pay $22 372 when the warehouse was damaged by arson on July 13th Northwest claimed breach of contract with O’Bryan and negligence on the part of both O’Bryan and the employee

Vicarious Liability Employee Liability In Northwestern Mutual Insurance Co. v J.T.O’Bryan & Co., 1974, the court found: The employee was found to owe a duty of care to Northwestern for “inexcusable negligence” The breach of this duty of care was the cause of the damage The employer was held vicariously liable Had the employee not been found guilty of tort, Northwestern could sue for only a breach of contract—a contract that likely had limitation clauses that would not allow Northwestern to recover all of its losses

Vicarious Liability Employee Liability In the case of Edgeworth Construction Ltd. v N.D. Lea & Associates Ltd., 1993, the plaintiff also claimed that the engineers who sealed the documents owed a duty of care By sealing the documents, that establishes a duty of care on any who rely on that document This would not make them directly liable, but rather, the liability would thus be spread between three parties: the contractor for not doing due diligence, the engineering firm, and its employees, and by vicarious liability, the engineering firm would be responsible for any negligence on the part of its employees

Vicarious Liability Employee Liability In the case of Edgeworth Construction Ltd. v N.D. Lea & Associates Ltd., 1993, the court found the seal does not establish a duty of care: “The only basis upon which [the engineers] are sued is the fact that each of them affixed his seal to the design documents. In my view, this is insufficient to establish a duty of care between the individual engineers and [Edgeworth Construction]. The seal attests that a qualified engineer prepared the drawing. It is not a guarantee of accuracy. The affixation of a seal, without more, is insufficient to found liability for negligent misrepresentation.”

Vicarious Liability Employee Liability In the case of Edgeworth Construction Ltd. v N.D. Lea & Associates Ltd., 1993, the court found the seal does not establish a duty of care: “The only basis upon which [the engineers] are sued is the fact that each of them affixed his seal to the design documents. In my view, this is insufficient to establish a duty of care between the individual engineers and [Edgeworth Construction]. The seal attests that a qualified engineer prepared the drawing. It is not a guarantee of accuracy. The affixation of a seal, without more, is insufficient to found liability for negligent misrepresentation.”

Vicarious Liability References [1] D.L. Marston, Law for Professional Engineers, 4th Ed., McGraw Hill, 2008. [2] Julie Vale, ECE 290 Course Notes, 2011. [3] Wikipedia, http://www.wikipedia.org/ These course slides are provided for the ECE 290 class. The material in it reflects Douglas Harder’s best judgment in light of the information available to him at the time of preparation. Any reliance on these course slides by any party for any other purpose are the responsibility of such parties. Douglas W. Harder accepts no responsibility for damages, if any, suffered by any party as a result of decisions made or actions based on these course slides for any other purpose than that for which it was intended.