INNOVATION May-June 2012

further. Indeed, if your risk assessment discloses the prospect of a counterclaim in the event of you suing for your fees, you should immediately notify your professional liability insurer, and consult your lawyer. Yes, non-payment of fees is offensive, but in many cases not as offensive as a multimillion dollar lawsuit in response to demanding payment. Alternate Dispute Resolution No one likes litigation, except litigation lawyers. One can make a very lucrative living out of “duking it out” in the courtroom to enforce your legal rights. However, in today’s world, choosing litigation as the preferred method of dispute resolution can prove to be a heavier financial burden than the dispute itself. So alternate forms of dispute resolution have developed over the past two decades or so and have proven to be a very cost effective and much less adversarial way of resolving disputes. The use of neutrals, official referees and trained mediators to resolve disputes is now a frequent way of resolving disputes in the construction industry and there is every indication that it will continue its upward popular trend. With this in mind, serious consideration should be given in preparing both the consulting contract and the general contract on projects to mandating mediation or a neutral or official referee as a way for resolving disputes which arise during and after construction. At the very least, a dispute resolution mechanism should be stipulated which maximizes the prospect of avoiding litigation. Disputes will be resolved faster, with less expense being incurred and the result is often no different than if one was to throw caution to the wind and adopt the attitude, “See you in court.” As I noted at the outset, these topics have been visited repeatedly over the years to multiple participants in the construction industry and although the industry is now a much more sophisticated vehicle than it was two, three or four decades ago, it should not lose sight of these risk management concepts so as to adapt to the ever-changing world it operates in. v John Singleton QC is a founding partner of Singleton Urquhart LLP. His practice has focused on the areas of insurance, construction, professional liability and environmental matters on behalf of property owners, architects, engineers, contractors, regulatory agencies and insurers.

obligation is and what procedures are to be followed both in periodic certifications, and in issuing letters of assurance and letters of completion. The engineer must make certain that a proper field mandate is given to enable accurate certification to be made. A refusal to certify a payment which would otherwise be due and owing can attract just as much legal liability from a contractor as an over- certification can attract from an owner/ client. In each case, it is the responsibility of the engineer to provide accurate certification which, in turn, can only be achieved with a proper field mandate. Tendering The law of tenders has expanded exponen- tially since the mid-1980s with the decision of the Supreme Court of Canada in Ron Engineering . The evolution of the law in this area has made it clear that the engineer has multiple levels of responsibility throughout the tendering period and beyond. The ob- ligation to prepare clear and unambiguous instructions to bidders and tender docu- ments, to make full disclosure during the tendering period, and to comply with the terms and conditions of tender and treat all bidders fairly and equally, all arise out of this area of the practice. Paying close at- tention to each of these aspects of this stage of a project can go a long ways to avoiding liability, as can resisting the tendency to provide the client with legal advice as to whether or not a particular bid is compliant or capable of acceptance. If your client is having health problems, they should see a medical doctor. If your client is having legal problems, they should consult a lawyer, not an engineer. Suing for Fees Clients often have a good subjective reason when they are refusing to pay consulting fees. So when an engineer sues a client for fees, the client often seizes on the opportunity to prove their right to withhold payment by commencing legal proceedings against the consultant. This is the nature of the beast, and you should be aware of it before making any quick decision to sue a client for outstanding fees. A risk assessment should first be conducted to determine whether or not there are some underlying causes for non-payment which might involve an error or omission on your part in the provision of professional services. If that is the case, then you may have a legal problem and you should take legal advice before proceeding

2 . For claims involving physical damage to property or bodily injury, for two years from the date the party suffering the loss or injury becomes aware that you might be responsible. 3. With respect to both of the above- mentioned claims, the ultimate limitation period currently stipulated in the Limitation of Actions Act is 30 years from the day the service was provided out of which the claim arises. As noted above, these periods can be shortened in the case of potential claims against you by your client by stipulating a shorter period in your contract. However, these shortened periods would not be binding on third party users of the projects you have designed and your exposure would remain as outlined above in claims of that nature. There is currently in front of the BC Legislature Bill 34 to repeal the Act and enact new legislation imposing a common two-year limitation period from the date the claimant has knowledge of the claim, and to reduce the ultimate limitation period from 30 years to 15 years. ( Editor’s note: see page 11 ) Field Services Of course the responsibility of an engineer goes beyond providing a design which meets applicable codes and standards. On most projects, field services also have to be provided. The improper provision of field services can attract just as much liability as a design error. So it is important to pay very close attention to the way in which the field services are provided and observations are reported. Assigning qualified personnel to the field is critical, as is proper record- keeping. Establishing a reasonable system for the provision of field services and adopting standard reporting formats can go a long way to avoiding liability arising out of this aspect of the professional life of an engineer. And, equally important is the need to keep the client advised and fully informed of any difficulties being encountered in the field that are not being properly attended to by the contractor. Payment Certificate A still further responsibility of the engineer which is closely tied to, or at least should be closely tied to, the engineer’s contractual mandate is payment certification. The obligation to provide this service necessitates clearly outlining in the contract what the

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