Canadian Legal Systems &Business

Organizations (Chapter 1nd 2)Cont

Theory of precedent: Applying legal principles

established earlier for the current case
Terminology: Plaintiff, Defendant
Plaintiff: one who makes the claim
Defendant: One who is defending the action or
claim.
Sole proprietorships, partnerships and
corporations

2/4/2015 1
5-2
Business Organization

Directors Standard of Care:

Every director and officer of a corporation in exercising powers or discharging
duties shall: (a) Act honestly and in good faith with a view to the best interest of the
corporation; and
(b) Exercise the care, diligence and skill that a reasonably prudent person would
exercise in comparable circumstances.
Director's Fiduciary Duty :
The obligation of a director to act in the best interest of the corporation and not in a
manner that is in the interest of the director personally.
Directors Conflict of Interest :
Every director and officer must disclose any personal interest in any contract or
dealings to which the corporation is a party and not to participate in decision
making process of such contract or transaction. This is to avoid the conflict of
interest while discharging the duty as director of corporation
Tort Liability (Ch 4 Very Important)

No contract required between the parties.

Example : Pedestrian struck by automobile. Even
though there is no contract. Still Driver of the
automobile is liable.

Generally negligence of one person causing

damages to the other ( must satisfy Tort
principles)

Tort: Means Civil wrong

2/4/2015 4
Overview

Tort = breach of a duty of care owed to another

party that causes injury or loss to that other party
Negligence is the tort architects, engineers and
geoscientists are most commonly sued for
Two categories of tort: intentional and unintentional
Tort law evolves continually as new cases are
decided

12-5
Tort Liability (Ch 4 Very Important)

Back Ground of Tort Laws:

Traditionally a contract is required to claim damages

Certain cases like Dongoghue V. Stevenson( Decomposed snail in

a bottle of ginger beer. Court ruled manufacturer liable)

Few other cases involving financial services also took the above
path and Tort liability become widely known

2/4/2015 6
Tort Liability (Ch 4 Very Important)

Negligence(PEO ACT): Means an act or

an omission in the carrying out of the work of a
practitioner that constitutes a failure to maintain
the standards that a reasonable and prudent
practitioner would maintain in the
circumstances. R.R.O. 1990, Reg. 941, s. 72
(1);

2/4/2015 7
Tort Liability (Ch 4 Very Important)

Purpose of Tort law is to compensate the victims

of tort. Punishment of wrongdoers is not the
purpose of tort laws

Other laws like Criminal laws focus on punishing

the wrong doers

2/4/2015 8
Tort Liability (Ch 4 Very Important).

Principle of tort laws are

A) The defendant owed the plaintiff a duty of care

B) The defendant breached that duty by his or her conduct

and

C) the defendant's conduct caused the injury/loss to the

plaintiff

If any of the above is not substantiated , plaintiff will not

succeed

2/4/2015 9
Tort Liability (Ch 4 Very Important)

Negligence

Negligent behavior is not ok.

Some judgment error or calculation error may not

constitute negligence

2/4/2015 10
Tort Liability (Ch 4 Very Important).

Duty of Care:

We need to provide service in accordance with the conduct

of a prudent and diligent engineer in the circumstances.

Common example we go to Doctor expecting good service.

Imagine negligence. Engineers fail to do critical tests (like
soil test before building work)

2/4/2015 11
Duties of Care for Engineers

Professionals owe a tort duty of care to the owner

even if there is no contractual relationship with the
owner e.g. when an engineer is hired by the
architect
A consultant who prepares specifications owes a
duty of care to bidders
Generally, consultants hired by the owner do not
have a duty of care to the contractor, or to the
contractors employees, but if the consultant
supervises the construction, such duties may arise

(Continued) 12-12
Duties of Care for Engineers
(Continued)
Tort claims by workers against professionals are
normally barred by workers' compensation
legislation
Third parties to the construction process may have
tort claims against consultants if the harm was
foreseeable
Tort liability is limited by policy considerations that
limit the circumstances in which duties of care apply

12-13
Tort Liability (Ch 4 Very Important).

Breaching the Duty by ones conduct:

Not doing what is right thing to do, due to

whatever reason. ( As public safety is paramount,
it is clear case of breach of duty)

2/4/2015 14
Breach of Duty

A breach of duty occurs when the standard of care

is not met
The standard of care is defined by what a
reasonable and competent member of that
occupation would have done in the situation
Expert evidence is used to establish the standard of
care in a particular case
The standard of care is determined considering the
state of the art at the time of the alleged breach
(Continued) 12-15
Breach of Duty (Continued)
Commonly practiced norms are relevant to, but not
determinative of, the standard of care
Professionals who hold themselves out as specialists will
be held to a higher standard of care
Most breaches of duty occur due to lack of care, not
incompetence
Continuing professional education programs guard
against incompetence
Checklists and other quality control procedures should
be used to prevent lack of care

12-16
Tort Liability (Ch 4 Very Important).

Economic Loss:

It is sometimes possible to recover economic loss(

wrong financial advice Hedley Vs Byrne)

Product liability matters : Some times may be

possible to recover

In few cases not always possible like damage to

electrical cable in industrial setting resulting
time /production loss
2/4/2015 17
Tort Liability (Ch 4 Very Important).

Apart from definition question, There will one

sure case study question in the exam about Tort
laws.

Concurrent Tort feasors: Torts concur to

produce same damage. More than one party to be
liable in such tort action.

2/4/2015 18
Tort Liability (Ch 4 Very Important).
Other torts
Tort of defamation : Libel and slander
Occupiers Liability: The occupier of the property
must exercise standard of care to ensure the
safety of individuals coming on to that property
Tort of Nuisance: To alleviate undue interference
with comfortable and convenient enjoyment of
the plaintiffs land

2/4/2015 19
Categories of Tort

12-20
Tort Liability (Ch 4 Very Important).

Disclaimer clause :
When dealing with Tort claim where in disclaimer
clause is present, all the general approaches for tort
liability should be discussed and general conclusion is
court will uphold (take disclaimer in consideration and
tort claim may not be successful in most cases)

2/4/2015 21
Limitation Periods, Proof (Ch 5 and 6)

Limitation Periods: Generally provides that tort actions and actions

for breach of contract must be commenced within prescribed time
periods after the time the cause of actions arose. Action may be
commenced at any time within the prescribed period. After the
prescribed period ,it will fail.
Law changed as of 1Jan 2004
3 rd edition Law book has old information pl ignore w.r t. limitation
period
Within 2 years of being discovered( Tort, contact and negligence )
Take note of recent amendments. PEO web site has it.

2/4/2015 22
Limitation Periods, Proof(Ch 5 and 6)Cont

Limitation Periods:
Ultimate fifteen Year limitation period: It is 15
Years running from the date that the act or
omission on which claim is based took place. So,
even claims that may not have been discovered(
and still not barred under the basic two year
limitation period) may still be barred by this ultimate
limitation period

2/4/2015 23
Limitation Periods, Proof(Ch 5 and 6)

Proof:
Plaintiff must prove the case against the defendant by
persuading the court on a balance of probabilities( In
criminal situations: It is beyond reasonable doubt)

2/4/2015 24
Contracts Law(Ch7 to 24 Very Important)

Engineers deal with contracts in some form or other

It is essential we understand this thoroughly
Also there is one sure question about the contracts
mostly case study
It is very interesting to read about contract case
studies

2/4/2015 25
Contract -Definition

Two or more parties entering into an

agreement which is enforceable by law
An enforceable contract has to have five
elements

2/4/2015 26
Contracts Law(Ch7 to 24 Very Important).

Binding and enforceable contracts must have five

elements
1.An offer must be made and accepted;
2.Mutual intent to enter into the contract;
3.Consideration;
4.capacity to contract;
5.lawful purpose;

2/4/2015 27
Contracts Law(Ch7 to 24 Very Important).

1.An offer must be made and accepted;

Promise made by one person to another.
For Evidence sake it is preferable to effect
communications in writing.
Offer has time limit for acceptance like validity
Until accepted it is not final unless otherwise stated
Acceptance must be clearly communicated.

2/4/2015 28
Contracts Law(Ch7 to 24 Very Important).

Occurs when the offering party receives the

acceptance or when the acceptance is
mailed
Revoking is effective when notice is
received by the party which received the
offer initially.

2/4/2015 29
Contracts Law(Ch7 to 24 Very Important).

Jurisdiction or Governing Law

Law( of the place) where the contract is
accepted unless other wise agreed upon.

2/4/2015 30
Contracts Law(Ch7 to 24 Very Important).

2.Mutual intent to enter into the contract;

Both parties must agree to the terms of
contract
Mutual interest in the engagement is
required.

2/4/2015 31
Contracts Law(Ch7 to 24 Very Important).

3.Consideration;
Something of value exchanged by the contracting
parties.
E.g..: Designing something for money
Each party promises to do something
Without consideration, contract not enforceable. It is
only promise to do something)

2/4/2015 32
Contracts Law(Ch7 to 24 Very Important).

3.Consideration;
The reason, cause, motive or price that
causes a person to enter into a contract
No need for consideration if the document is
sealed ( Sealed document is considered
alternate/substitute to consideration)
Tenders are often sealed

2/4/2015 33
Contracts Law(Ch7 to 24 Very Important).

3.Consideration;
Seal: (Two Types of seals)
Mechanical seal: like lock or mechanical
seal
Personal seal: red adhesive wafer
Tenders are sealed

2/4/2015 34
Contracts Law(Ch7 to 24 Very Important).

3.Consideration;
Equitable estoppel:
Concept where relief is available to the party, which
received gratuitous promise (promise made without
consideration) is called equitable estoppel. Court will
only exercise its discretion to apply the concept of
promissory or equitable estoppel to avoid an obvious
inequitable result.

2/4/2015 35
Contracts Law(Ch7 to 24 Very Important).

3.Consideration;
Equitable estoppels:
Issues: Party A & B have a contract. As the contract is going
on, A& B modify the contract and execute without
consideration ,( it unfair to a party A, if the party B is denies
contract modification and later on sticking to the original
contract there by making loss/damage to A). The party B is
estopped (prevented) from strictly going by the terms of the
contract.
Courts can intervene and remedy such injustice. These are
broad aspects of Equitable estoppels

2/4/2015 36
Contracts Law(Ch7 to 24 Very Important).

3.Consideration;
No consideration:
Gratuitous promise
A valid contract must involve a "consideration" (something of value,
such as a fee, property, etc) that induces each party to complete the
contract. A contract made without consideration, is a "gratuitous
promise.". It may be enforceable under equitable estoppels, if there
is a clear inequity.

2/4/2015 37
Contracts Law(Ch7 to 24 Very Important).

4.capacity to contract;
Contract with minors by adults not
enforceable

2/4/2015 38
Contracts Law(Ch7 to 24 Very Important).

5.lawful purpose;
Contract will not be enforceable if the
purpose of the contract is unlawful.
Business must be legal for contract to be
valid

2/4/2015 39
Tendering: Introduction

The law of contract applies

Large amounts of money at stake: failure to abide
by the rules of the process may result in lost
contracts for bidders & liability for buyers
Law of mistake applies, but courts are reluctant to
allow bidders to withdraw bids
Bid depositories resolve some of the problems
inherent in tendering

10-40
Tendering: Contract Formation

Invitation to treat = request for offers

Call for tenders = offer to enter into a
"Contract A", which may lead to
formation of "Contract B" for construction
of the project: Ontario v. Ron
Engineering, [1981] 1 S.C.R. 111
Generally, every bidder enters into a
Contract A, but only the successful
bidder enters into a Contract B 10-41
Tendering: Contract Formation
(Continued)

10-42
Duress

Contract induced by means of intimidation,

is voidable. This is called Duress.
Threatened or actual violence or
imprisonment used as a means of
persuading a party to enter into contract

2/4/2015 43
Undue influence. Contact A, Contract B

Similar to Duress but less drastic

circumstance. One party dominates the
other and forces the free will.
Contract A Deals with tendering phase
Contact B- The actual (construction)
contract itself.

2/4/2015 44
Contract Interpretations

Two Approach to interpreting contract

Liberal Approach takes intent of the parties may
lead to speculation
Strict Approach Precise words in agreement
Relaying on Dictionary
It will be courts decision what constitutes
reasonable interpretation in the circumstances

2/4/2015 45
Contract Interpretations

Rule of Contra Proferentem: Contract rule of

interpretation that underscores the
importance of clear and unambiguous
language in the drafting of contracts. If it not
clear , contact will be construed or
interpreted against the party drafted it.

2/4/2015 46
Contract Interpretations .

Parol Evidence Rule: Contract law rule that

precludes evidence (Excludes evidence) of
the omitted condition is called Parol
Evidence Rule.
Discharge by Frustration: Without default of
the both parties some times circumstance
may change the obligation like war. Under
such situation ,it is called discharge by
frustration

2/4/2015 47
Breach of Contract

If contracts are breached Liquated damages

are possible
Duty to mitigate: party that suffers a loss
through breach of contract must take
reasonable steps to reduce the damage.
Specific performance: Court may order for
contract obligation

2/4/2015 48
Damages

Damages: Those suffered by the plaintiff as result of tort

liability or contract issues.

Liquidated damages: Damages due to breach of contract

like fines , lost production etc..

Indirect /Consequential damage: It is also called special or

indirect damages. It is best illustrated as consequential to the breach
and might include damages for lost profits caused by a plant shut-
down resulting from a contractor failing to perform services
properly and thereby affecting the overall operation of the plant.
Power line cut by Contractor that results in the loss. Fine to owner as
result of non-compliance with environmental protection statute.

2/4/2015 49
Fundamental Breach of Contract

Harbutts Plasticine Ltd V Wayne Tank and Pump Co Ltd,---Plastic pipe

built by Wayne Tank cracked and fire resulted. Wayne in
fundamental breach of contract could not rely on exemption clause.
The intent was unsuitable for the purpose.
Very Good example of Fundamental breach of contract.
Hunter Vs Syncrude Canadian Supreme court decision overruling
Fundamental Breach---Hunter & Allis chambers contracted to give
gear boxes to Syncrude-failed badly- another vendor fixed the
problem-Sued for cost-Allis warranty denies all warranty including
statutory warranties (sale of goods act). Fundamental breach? If yes
then exemption clause will be overruled. SC ruled Hunter allies not
liable-free contract-no evidence of unequal bargaining power

2/4/2015 50
Employment Contracts

All contract rules applies

When in dispute court uses (1)
Reasonableness approach and (2) Favors
free trade approach; discourages restrictive
trade

2/4/2015 51
Lien Legislation

Lien Rights: It is to protect the interest of

sub contractors who does the work for main
contractor.
Certain amount is held from contractors
invoice for a specified period . This hold
back will be published in daily paper . If no
sub contractor claims ( that they werent
paid).

2/4/2015 52
Lien Legislation

Lien Rights: Hold back from contractor until

a specified time
Certain percentage is held back . Basic and
finishing work.
Provincial legislation has lien provisions
Certificate of substantial performance

2/4/2015 53
Intellectual property

Patents
Trade marks
Copy right
Trade secrets.

2/4/2015 54
Intellectual Property:
Introduction

Protects the expression of ideas

Can be viewed as a bundle of rights
Governed by federal legislation and
international treaties
Categories include: copyright, patent,
trademark, industrial design, integrated
circuits
Copyright 2007 Pearson Education Canada Inc. 4-55
Intellectual Property: Copyright

Protects works e.g. literary, musical,

dramatic, artistic
The work must be original, permanent,
published and the product of skill
Term of protection in Canada = Authors
life + 50 years

Copyright 2007 Pearson Education Canada Inc. 4-56

Intellectual Property: Patents

Protect inventions: process, machine,

composition of matter, or an improvement
on one of those
Invention must be new and useful
No protection without registration
No protection if publicly disclosed before
registration
Term of protection in Canada = 20 years
4-57
Intellectual Property:
Trademarks

Protects marks used to distinguish goods

or services
Must be distinctive, and actually used, to
be registerable
Registration gives the right to exclusive
use of the trademark throughout Canada
Term of protection = 15 years, renewable
Copyright 2007 Pearson Education Canada Inc. 4-58
Intellectual Property: Industrial
Design and Integrated Circuits

Industrial design:
Protects the shape, configuration and
general look of mass produced items
Term of protection = 10 years

Integrated circuits:
Protects the design of integrated circuits in
electronic equipment
TermCopyright
of protection
2007 Pearson=Education
10 years
Canada Inc. 4-59
Law Exam Case study- Strategy to Answer

EGAD Strategy
Make out what kind of question Tort or
contract?
Approach: Introduction, legal principles
involved, Analysis and conclusion

2/4/2015 60
READ - EGAD! - SUMMARIZE.

READ - EGAD! - SUMMARIZE.

The acronym "EGAD!" (an old English exclamation of surprise) is explained below, and is then demonstrated
by two examples which are similar to previous exam questions:
Step 1: READ - Read the problem thoroughly. You must gather the facts and separate the key facts from
unimportant details. Highlight or underline key facts on the exam paper; do not copy the question into
the exam book, since this takes valuable time which should be spent on your answer.
Step 2: E - ETHICALILEGAL ISSUES - Identify the ethical problems or legal issues. In the professional
practice exam, the questions usually give you a hint. For example: "Has Mr. Smith broken the Code of
Ethics?" or "What potential tort liabilities arise from this incident?" These questions help you to identify
the ethical or legal area. However, some exam questions may say simply: "Explain and discuss this
case. You must think of similarities to previous cases. If the ethical or legal issue is not immediately
clear, then analyze the behaviour or facts by asking yourself the following "Who? What? How? Which?"
questions:
. Who is involved? (Who has caused harm, or might cause harm, and to whom?) . What type of harm or
damage has occurred? (or may potentially occur?)
. How has this harm occurred? (or may potentially occur?)
. Which principles of ethics or law appear to apply to this behaviour?
Step 3: G - GENERATION - Generate (or identify) possible courses of action. The goal, in this step, is to
"generate" (or imagine) all the alternatives. An exam question will usually state an ethical dilemma in a
way that implies two alternatives, both of which are undesirable. However, you may be able to suggest a
2/4/2015
third possibility, which is better. The Generation step applies readily to most ethics problems, particularly 61
if the question asks -what should you do?" However, it may apply differently in some law questions,
Law Exam Case study- Strategy to Answer

Dont write facts given in question.

If question is vague, write your assumptions
90 minutes is for each plan accordingly
Can write in the margin to show your thought
process
Use bullet form answer. Use pen

2/4/2015 62
Law Exam Case study- Strategy to Answer

Draw to show the relation ship between

parties Example

Owner Consultant Engineer

Contractor

2/4/2015 63
Case study Topics

Tort Laws:
1. General Tort law
2. Concurrent Tort feasors
3. Tort law with disclaimers

2/4/2015 64
Case study Topics

Contract Laws:
1. Breach of contract Fundamental
2. Equitable estoppel
3. Tendering Contract A
4. Employment related

2/4/2015 65
Law Exam-overview Summary

2/4/2015 66
Law Case Study discussions

Small group of say 7 people. Each will be

given two case studies. Discuss the issues
write down and will share with other groups.
Every one need to participate.
Group members will answer the questions.
20 minutes per case study.

2/4/2015 67
Agenda
Day2 : Sunday

9:00 Review and Revise Law &Liability

10:00 Break
10:15 PEO Overview, Act &Regulations
12:00 Lunch break
12:45 EthicsCase studies
15:00 Break
15:15 Case study,review Q &A ,Mock test
16:45 Wrap-up

2/4/2015 68
Agenda
PPE_ETHICS
1. Regulatory practice of professional engineering in Ontario
2. Understanding Important regulation O.Reg.941/90 sec 77
(Code of ethics) & O.Reg.941/90 sec 72(professional
misconduct)
a) Short answer questions review
b) Code practice
c) Solve case study questions whole class
3. Applying mainly (2) and few aspects of (1) in case study
answers
a) Small group activity

2/4/2015 69
ETHICS _OVER VIEW

Text Book: Professional Engineering Practice

and Ethics By Andrews & Kemper
Topics: Regulation of the Engineering
profession
Ethical problems in Industry, Management,
Private practice.

2/4/2015 70
ETHICS _OVER VIEW ..

Engineers duty to society and the

Environment
Disciplinary Powers and Procedures.
Six Step Strategy for Problem solving both in
ETHICS and LAW
READ-EGAD-SUMMARIZE

2/4/2015 71
What is Profession?

Profession: A profession is defined as a self-

selected, self-disciplined group of
individuals who hold themselves out to the
public as possessing a special skill derived
from training and education and are
prepared to exercise that skill in the interest
of others.

2/4/2015 72
Aspects of Professionalism

Public obligation is paramount

Acceptable standards of conduct and
competence
Intellectual rather than manual
Trust worthy while practicing the profession

2/4/2015 73
Provincial and Territorial Acts

Provincial and territorial governments regulate

engineering and geoscience by Acts of provincial
legislatures (in the provinces) or legislative councils
(in the territories)

2-74
Contents of the Acts

Legal definition of engineering and/or geoscience

Purpose of the Act (which, in every case, is to
protect the public)
Authority to establish a provincial (or territorial)
Association
Purpose (or objects) of the Association
Standards for granting licenses (or for admission to
the Association)
CONTINUED
2-75
Contents of the Acts

Procedures for establishing regulations to govern professional

practice
Procedures for establishing bylaws to govern the Association
itself
Code of Ethics to guide the personal actions of the Licensees
(or members)

Every Act is available on the Internet via the Web pages for
the provincial and territorial Associations.

2-76
Engineering Associations
Rules

Regulations: rules to implement or support

the Act (e.g., admissions, conduct and
misconduct, discipline)
By-laws: rules to administer the Association
itself (e.g., elections, financial matters,
committees, meetings)
Engineering Code of Ethics: states
standard of conduct expected of individual
engineers 2-77
Principal object the Association
(PEO)

The principal object of the Association is to

regulate the practice of professional
engineering and to govern its members, holders
of certificates of authorization, holders of
temporary licences, holders of provisional
licences and holders of limited licences in
accordance with the PEO Act, the regulations
and the by-laws in order that the public interest
may be served and protected
 Additional objects

For the purpose of carrying out its principal object, the Association has
the following additional objects:
1. To establish, maintain and develop standards of knowledge and skill
among its members.
2. To establish, maintain and develop standards of qualification and
standards of practice for the practice of professional engineering.
3. To establish, maintain and develop standards of professional ethics
among its members.
4. To promote public awareness of the role of the Association.
5. To perform such other duties and exercise such other powers as are
imposed or conferred on the Association by or under any Act. R.S.O.
1990, c. P.28, s. 2 (4).
Admission to Engineering

Education (more details to follow)

Experience (more details to follow)
Knowledge of professional practice and ethics
Language
Character
Age

2-80
 What is a Professional
Engineering?

practice of professional engineering means

any act of planning, designing, composing,
evaluating, advising, reporting, directing or
supervising that requires the application of
engineering principles and concerns the
safeguarding of life, health, property, economic
interests, the public welfare or the environment,
or the managing of any such act.
2/4/2015 81
 Role of PEO

Regulates the practice of professional engineering in Ontario.

It is a licensing body for individuals and organizations. Its
activities are geared to in such a way that the public interest
are served and protected to high standards.
It Enforces the act. PEO Act.
Peo establishes and maintains the Professional practice
Promote public awareness of PEO

2/4/2015 82
PEO and Types Of License

PEO is self regulating body. Ontario act Formed PEO. PEO

regulates itself
Few different Types Licenses 1. Regular license, Temporary,
provisional ,limited.
EIT provision
Engineer and Consulting engineer designations
Certificate of authorization

2/4/2015 83
Licensing Requirement

They are the same for all applicants, no matter where they come
from. They must:
Hold a degree from a Canadian Engineering Accreditation
Board (CEAB) - accredited program or equivalent
qualifications;
successfully complete PEOs Professional Practice
Examination (PPE); and
have at least four years of acceptable, verifiable experience in
engineering, one of which must be acquired in Canada under
a Professional Engineers supervision.

2/4/2015 84
Licensing Requirement..Cont..

be at least 18 years of AGE;

be of good character

2/4/2015 85
Admission to the profession:

Once the requirements are completed

You will be issued a license
A seal (stamp)
Can use P.Eng.
You can attend Certificate presentation ceremony-
chapters conduct that.

2/4/2015 86
Seal Engineers Seal

All Licensed Engineers get a seal

Primarily to seal the drawing (Approving),
specification, report, plan etc..prepared or verified
by the Engineer.
Should be legible and dated
Seal should be applied to copies not master
Any changes to the document) should be sealed
Seals should not be used in Business card or
advertising.

2/4/2015 87
Enforcement & Discipline

Enforcement is focussed on Non members

like misuse of title and signing the vital
document etc.
Discipline is focussed on the PEO members.

2/4/2015 88
Disciplinary Process steps

Complaints Committee Carries out:

Compliant received by PEO about misconduct
Gathering information
Evaluation of the complaint
Disciplinary Committee Carries out
Formal hearing
Disciplinary action

2/4/2015 89
Possible Disciplinary Actions

Loose license, getting restrictions, suspension and limiting

Fines
Reprimand or counsel
Publish finding with or without names(Eng Dimension)
We may asked to comply by court

2/4/2015 90
 What is Ethics?
Study of right and wrong, good and evil, obligations and rights,
justice, and social and political ideals.
Common Definition for us: Defining , analyzing, evaluating and
resolving moral problems and developing moral criteria to
guide human behavior.

2/4/2015 91
 Ethics and Problem Solving
11- 92

Philosophy
Derived from the Greek meaning love of
wisdom
Deals with search for truth and knowledge
Ethics is one of the four branches of philosophy
Ethics
Logic
Epistemology
Metaphysics
 Philosophy Branches
11-
93

Ethics
study of right and wrong, good and evil, obligations and rights,
justice, and social and political ideals
Logic
study of the rules of reasoning
Epistemology
study of knowledge itself
Metaphysics
study of very basic ideas such as existence, appearance,
reality, and determinism
 Ethics
11-
94

Ethics and logic have many practical

applications in our lives
Ethical writings can be traced back over 3,000
years
Logic is also important to engineers and
geoscientists, it is the basis of mathematical
derivations
 Principles of Justice
11- 95

Definition of justice:
A state of affairs in which conduct or action is
both fair and right, given the circumstances

For an ethical dilemma, the decision must

satisfy both the test of rightness, by agreeing
with the ethical theories, and also the test of
fairness
Four basic categories of justice, depending on
the application
 Corrective Justice
11- 96

Fairness in rectifying wrongs

When someone harms a person or damages a
persons property, ethical theories agree that
the person has the right to rectification,
replacement, or repair

Two applications are relevant in engineering

and geoscience practice:
Tort law
Professional discipline CONTINUED
 Corrective Justice
11- 97

Tort law
Tort means injury or damage
Engineers and geoscientists must be responsible for their
actions and decisions (covered in Chapter 8)

Professional discipline
Licensing Associations protect public by deterring unlicensed
persons from practicing, and by disciplining licensed
professionals
Each Association must respond to complaints and must
discipline professionals who are found guilty of misconduct,
which includes incompetence, negligence, and breaches of
the Code of Ethics
 What is a Code of Ethics?
The Code of Ethics is a basic guide to professional conduct
and imposes duties on the practising professional engineer,
with respect to:
society;
employers;
clients;
colleagues, including employees and subordinates;
the engineering profession; and
himself/herself.

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 Codes of Ethics as Guides to
Conduct
11- 99

Codes of Ethics include statements of general principles followed

by instructions for specific conduct that emphasize the duties
General principles:
Duty to Society
Duty to Employers
Duty to Clients
Duty to Colleagues
Duty to Employees and Subordinates
Duty to the Profession
Duty to Oneself
 Codes of Ethics as Guides to
11-
Conduct
100

DUTY TO SOCIETY
most important duty
duty to protect the safety, health, and welfare of
society whenever society is affected by their work
the professions receive the privilege of self-regulation
DUTY TO EMPLOYERS
must act fairly and loyally to the employer
must keep the employers business confidential
disclose any conflict of interest
CONTINUED
 Codes of Ethics as Guides to
11-
Conduct
101

DUTY TO CLIENTS
same obligations to clients as an employee has to the
employer
DUTY TO COLLEAGUES
must act with courtesy and good will toward colleagues
Codes of Ethics state specifically that fellow professionals
must be informed whenever their work is reviewed
DUTY TO EMPLOYEES AND SUBORDINATES
must recognize the rights of others, especially if they are
employees or subordinates

CONTINUED
 Codes of Ethics as Guides to
11-
Conduct
102

DUTY TO THE PROFESSION

must maintain the dignity and prestige of the
profession
must avoid scandalous, dishonorable, or disgraceful
conduct
DUTY TO ONESELF
must ensure that the duties to others are balanced by
the individuals own rights
must insist on adequate payment, a satisfactory work
environment
strive for excellence and maintain competence in the
rapidly changing technical world
CODE OF ETHICS & PROFESSIONAL MISCONDUCT

It is under On Regulation 941 made under

Professional Engineers act.
Code of Ethics and Professional misconduct
Excerpts are in your hand out.
Need to go through them few times
While answering ethics Questions, need to
quote from this. This is a must.

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Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941

77. The following is the Code of

Ethics of the Association:

1. It is the duty of a practitioner to the public, to the

practitioner's employer, to the practitioner's clients, to
other members of the practitioner's profession, and to the
practitioner to act at all times with, i.fairness and loyalty
to the practitioner's associates, employers, clients,
subordinates and employees,
ii.fidelity to public needs,
iii.devotion to high ideals of personal honour and
professional integrity,
iv.knowledge of developments in the area of professional
engineering relevant to any services that are undertaken,
and
v.competence in the performance of any professional
engineering services that are undertaken. 2/4/2015 104
 Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941

2. A practitioner shall, i.regard the practitioner's

duty to public welfare as paramount,
ii.endeavour at all times to enhance the public
regard for the practitioner's profession by
extending the public knowledge thereof and
discouraging untrue, unfair or exaggerated
statements with respect to professional
engineering,
iii.not express publicly, or while the practitioner
is serving as a witness before a court,
commission or other tribunal, opinions on
professional engineering matters that are not
founded on adequate knowledge and honest
conviction,
iv.endeavour to keep the practitioner's licence,
temporary licence, limited licence or certificate
of authorization, as the case may be,
permanently displayed in the practitioner's place
of business. Professional Engineers Ontario Code
of Ethics, Section 77 of the O. Reg. 941
2/4/2015 105
Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941

3. A practitioner shall act in professional

engineering matters for each employer as a
faithful agent or trustee and shall regard as
confidential information obtained by the
practitioner as to the business affairs,
technical methods or processes of an
employer and avoid or disclose a conflict of
interest that might influence the
practitioner's actions or judgment.

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Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941

4. A practitioner must disclose immediately to

the practitioner's client any interest, direct
or indirect, that might be construed as
prejudicial in any way to the professional
judgment of the practitioner in rendering
service to the client.

2/4/2015 107
Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941

5. A practitioner who is an employee-engineer and is

contracting in the practitioner's own name to
perform professional engineering work for other
than the practitioner's employer, must provide
the practitioner's client with a written
statement of the nature of the practitioner's
status as an employee and the attendant
limitations on the practitioner's services to the
client, must satisfy the practitioner that the
work will not conflict with the practitioner's duty
to the practitioner's employer, and must inform
the practitioner's employer of the work.

2/4/2015 108
Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941

6. A practitioner must co-operate in working

with other professionals engaged on a
project.

2/4/2015 109
 Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941

7. A practitioner shall,
i.act towards other practitioners with courtesy and good
faith,
ii.not accept an engagement to review the work of
another practitioner for the same employer except
with the knowledge of the other practitioner or except
where the connection of the other practitioner with the
work has been terminated,
iii.not maliciously injure the reputation or business of
another practitioner,
iv.not attempt to gain an advantage over other
practitioners by paying or accepting a commission in
securing professional engineering work, and
v.give proper credit for engineering work, uphold the
principle of adequate compensation for engineering
work, provide opportunity for professional
development and advancement of the practitioner's
associates and subordinates, and extend the
effectiveness of the profession through the
interchange of engineering information and
experience. 2/4/2015 110
Professional Engineers Ontario Code of Ethics,
Section 77 of the O. Reg. 941

8.A practitioner shall maintain the honour and

integrity of the practitioner's profession and
without fear or favour expose before the
proper tribunals unprofessional, dishonest
or unethical conduct by any other
practitioner. R.R.O. 1990, Reg. 941, s. 77;
O. Reg. 48/92, s. 1.

2/4/2015 111
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941

72. (1) In this section,

"harassment" means engaging in a course of vexatious comment
or conduct that is known or ought reasonably to be known
as unwelcome and that might reasonably be regarded as
interfering in a professional engineering relationship;
"negligence" means an act or an omission in the carrying out of
the work of a practitioner that constitutes a failure to
maintain the standards that a reasonable and prudent
practitioner would maintain in the circumstances. R.R.O.
1990, Reg. 941, s. 72 (1); O. Reg. 657/00, s. 1 (1).

2/4/2015 112
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941

(2) For the purposes of the Act and this Regulation,

"professional misconduct" means,
(a) negligence,
(b) failure to make reasonable provision for the safeguarding of
life, health or property of a person who may be affected by
the work for which the practitioner is responsible,
(c) failure to act to correct or report a situation that the
practitioner believes may endanger the safety or the welfare
of the public,

2/4/2015 113
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941

(d) failure to make responsible provision for complying with applicable

statutes, regulations, standards, codes, by-laws and rules in
connection with work being undertaken by or under the
responsibility of the practitioner,
(e) signing or sealing a final drawing, specification, plan, report or other
document not actually prepared or checked by the practitioner,
(f) failure of a practitioner to present clearly to the practitioner's employer
the consequences to be expected from a deviation proposed in
work, if the professional engineering judgment of the practitioner is
overruled by non-technical authority in cases where the practitioner
is responsible for the technical adequacy of professional
engineering work,

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Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941

g) breach of the Act or regulations, other than an action that is

solely a breach of the code of ethics,
(h) undertaking work the practitioner is not competent to perform
by virtue of the practitioner's training and experience,

2/4/2015 115
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941

(i) failure to make prompt, voluntary and complete disclosure of an

interest, direct or indirect, that might in any way be, or be
construed as, prejudicial to the professional judgment of the
practitioner in rendering service to the public, to an employer or to
a client, and in particular, without limiting the generality of the
foregoing, carrying out any of the following acts without making
such a prior disclosure:
1. Accepting compensation in any form for a particular service from more
than one party. 2. Submitting a tender or acting as a contractor in
respect of work upon which the practitioner may be performing as
a professional engineer.
3. Participating in the supply of material or equipment to be used by the
employer or client of the practitioner.
4. Contracting in the practitioner's own right to perform professional
engineering services for other than the practitioner's employer.
5. Expressing opinions or making statements concerning matters within
the practice of professional engineering of public interest where the
opinions or statements are inspired or paid for by other interests,
2/4/2015 116
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941

(j) conduct or an act relevant to the practice of professional

engineering that, having regard to all the circumstances,
would reasonably be regarded by the engineering
profession as disgraceful, dishonourable or unprofessional,
(k) failure by a practitioner to abide by the terms, conditions
or limitations of the practitioner's licence, limited licence,
temporary licence or certificate,

2/4/2015 117
Definition of Professional Misconduct: Section 72 of
Regulations RRO. 941

(l) failure to supply documents or information requested by an

investigator acting under section 34 of the Act,
(m) permitting, counselling or assisting a person who is not a
practitioner to engage in the practice of professional
engineering except as provided for in the Act or the
regulations,
(n) harassment. R.R.O. 1990, Reg. 941, s. 72 (2); O. Reg.
657/00, s. 1 (2).

2/4/2015 118
 Illegal Activities
12 -
119

Professional engineer or geoscientist may be asked to

engage in an activity that is contrary to the law
Often occurs because pressure on management to generate
profits. For example:
A geoscientist is asked to approve improper disposal of
toxic industrial wastewater. This disposal is contrary to
provincial environmental regulations.
The necessary action is clear: the engineer must advise
employer that action is illegal and must not break the law
Employers do not have the authority to direct an employee to
break the law
 Overview: Conflict of Interest
12 -
120

Unethical and unprofessional

Occurs whenever a professional receives any
benefit or has any relationship that interferes
with the duty owed to the client or employer
Occurs when an employee secretly receives a
benefit or payment from more than one person
for the same activities
Every Code of Ethics requires disclosure of any
conflict of interest
 Common Conflicts of Interest
12 -
121

Seven common categories defined by Kernaghan and

Langford in The Responsible Public Servant:
Accepting secret commissions
Misusing the employers facilities
Secret employment or moonlighting
Self-serving decisions
Influence peddling
Abusing confidential information
Arranging future employment
 Subcategories of Conflict of
12 -
Interest
122

The conflicts of interest may be subdivided into

three categories:
Clear (or Actual) Conflict
professionals service to the client or employer
is clearly compromised
Potential (or Latent) Conflict
professional does not have a conflict of interest
at present, but the situation is such that a
reasonable person would predict a conflict to
exist in future
CONTINUED
 Subcategories of Conflict of
12 -
Interest
123

Perceived Conflict
the professional does not have a conflict of
interest, but observers believe (or might believe)
that a conflict of interest does exist
 Avoiding Conflicts of Interest
12 -
124

Refuse to accept gifts or bribes

Refuse to misuse your authority for personal
gain
Refuse favour specific people
Full disclosure if conflict arises
Resist temptation to give or receive favoured
treatment
 Environmental Ethics
- 125

Environment is a public resource

Protecting environment is everyones duty
Professional engineers and geoscientists
have a special responsibility because their
decisions sometimes can cause great harm
Professionals must avoid unsafe, unethical,
or illegal environmental practices
May be forced to report unethical practices to
the appropriate authorities
 The Duty to Society
15 -
126

Requires reasonable care

In environmental terms, reasonable care, prudence,
and scientific knowledge:
Knowledge of environmental law
seek advice before taking any action that might contravene
an environmental law, regulation, or bylaw
compliance with environmental law
Adequate technical knowledge
before releasing any substance into the environment, must
have knowledge of effects of the release, even when
substances are not toxic
CONTINUED
 Implementing the Guidelines
15 -
127

Professional must:
find and comply with the appropriate regulations
for the professionals discipline
apply professional and responsible judgement
call for specialist guidance when it is needed
disclose information when necessary, to protect
public safety
General case study (Ethics) Areas

1. Public safety including environmental issues

2. Conflict of interest
3. Moon lighting Part time Engineering work)
4. Non _technical authority over ruling engineers
5. Permitting non qualified technical people to do
engineering job without supervision
Note: Familiarising the Sub -sections of On Reg 941/90
sec 77 and 72 Cannot be over emphasised

2/4/2015 128
 Ethics Case study Guidance to answer

Case study answers should include,

Explanations ( where applicable) about the manner in which -
dilemmas between duties to the public and duties to employers,
situations involving moonlighting and situations involving conflicts of
interest are handled
Engineers ethical duties to the public, to the employer/client, to fellow
engineers and to the image of the engineering profession, as well as
analyze the impact of each one of those duties on every action related
to the circumstances described in each question. ( wherever relevant)
Reference to the code of professional misconduct and of ethics
(Sections 72 and 77 respectively). By making reference to the codes
in your responses you are showing the examiner you understand the
concepts and know how to apply them correctly in your answers.
Reference to the code is very very important

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Ethics Case Study discussions

Small group of say 7 people. Each will be

given two case studies. Discuss the issues
write down and will share with other
groups.Every one need to participate.
I will choose who will answer the questions.
15 minutes per case study.

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Final Tips for The PPE Exam

1. Practice writing down - definitions, case

study
2. Try to solve the case studies yourselves
3. Use EGAD principles and mark in margins

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Final Thoughts.

You will clear this step with fun

You have few weeks to exam
Focus and study, write, think about it all the
time
Remember Definitions, case study , Model
template

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