2. 2/13/2014 1 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development Legal Considerations Affecting Risk Acceptance R. Scott Johnson Legal Aspects of Aerospace TC McKee, Voorhees & Sease, LLP Topic 3

3. 2/13/2014 2 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development What is risk? Potential for

4. 2/13/2014 3 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development Negligence Duty Breach of Duty Injury Causation

5. 2/13/2014 4 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development Negligence Duty –Generally: Exercise Reasonable Care Breach of Duty Injury Causation

6. 2/13/2014 5 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development Negligence Duty –Specifics: Statutes, Rules, and Regulations Breach of Duty Injury Causation

7. 2/13/2014 6 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development Specifics: Statutes, Rules, and Regulations Federal Aviation Act of 1958 –49 U.S.C. Provides regulatory authority for: –Department of Transportation Aviation Economic Regulations or AERs 14 C.F.R. § 200-400 –Federal Aviation Administration Federal Aviation Regulations or FARs 14 C.F.R. § 1 - 199 –National Transportation Safety Board 49 C.F.R. § 830, 31, and 45

8. 2/13/2014 7 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development Specifics: Statutes, Rules, and Regulations State products liability laws –liability of a manufacturer or seller of a chattel which is defective and/or unreasonably dangerous and causes injury. –William R. Prosser, Handbood of the Law of Torts 641 (4th ed. 1971) –Three theories of recovery: Warranty (contract remedy) Strict liability (tort remedy) Negligence (tort remedy)

9. 2/13/2014 8 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development Negligence Duty Breach of Duty Injury Causation

10. 2/13/2014 9 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Bad Create broad range of compliance duties Create investigation bodies –NTSB determines probable cause for all aircraft accidents in the U.S. Create Enforcement Procedures –Civil and criminal penalties

11. 2/13/2014 10 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Bad Other Sources of Liability –Contract provisions –Other Federal and State Statutes and Regulations Environmental Intellectual Property Employment Corporate –International Treaties

12. 2/13/2014 11 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Good Statutes can be good?

13. 2/13/2014 12 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Good General Aviation Revitalization Act of 1994 (42 U.S.C. § 40101) –18 year statute of repose prohibits any legal action for any aircraft, engine or part at issue –Applies to all general aviation aircraft

14. 2/13/2014 13 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Good General Aviation Revitalization Act of 1994 (42 U.S.C. § 40101) - Exceptions –Manufacturer knowingly misrepresented or concealed or withheld from the FAA information relating to: The type certification components airworthiness

15. 2/13/2014 14 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Good General Aviation Revitalization Act of 1994 (42 U.S.C. § 40101) - Exceptions –claimant was a passenger for purposes of receiving emergency or medical care

16. 2/13/2014 15 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Good General Aviation Revitalization Act of 1994 (42 U.S.C. § 40101) - Exceptions –suit is brought under the manufacturers written warranties

17. 2/13/2014 16 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Good State statute of limitations International Treaties –Warsaw Convention Other liability limiters –Sales contract provisions shift liability away limit liability –Insurance agreements cover yourself

18. 2/13/2014 17 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Beautiful Risk Management Programs –By whom? –Government Initiated NTSB or FAA –Insurance Company –In-house

19. 2/13/2014 18 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Beautiful Risk Management Programs –Evaluate loss potential –Use established risk management techniques –Put a plan in action

20. 2/13/2014 19 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Beautiful Risk Management Programs –Evaluate loss potential Total potential loss X % Chance loss will occur Account for all losses (Economic & Social) –Use established risk management techniques –Put a plan in action

21. 2/13/2014 20 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Beautiful Risk Management Programs –Evaluate loss potential –Use established risk management techniques Eliminate (Dont Do It) Reduce (Rapid Response) Transfer (Insurance) Retain (Savings Plan) –Put a plan in action

22. 2/13/2014 21 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development The Beautiful Risk Management Programs –Evaluate loss potential –Use established risk management techniques –Put a plan in action Identify the risks –Maintain database of accidents, lawsuits, liability situations Create contingencies and risk reducing methods Example: British Airways BASIS program

23. 2/13/2014 22 Engineering & Technology Management Group Engineering Technology Management Tracking the Constant of Change Management History Society Legal Aspects LogisticsSupply Chain Systems Engineering Economics Risk Technical Information Multidiscipline Design Product Development Thank you! R. Scott Johnson McKee, Voorhees & Sease, PLC 801 Grand Avenue, Suite 3200 Des Moines, Iowa 50309 johnson@ipmvs.com