We are frequently consulted on disputes over the wording of
contracts between environmental engineers and their clients. Some
contracts are just badly drafted, so it's hard to know what
they mean. Others are clearly drafted, but don't describe what
the client was promised. Some deprive clients of virtually all
meaningful remedies for shoddy work.
One common problem is limitation of liability clauses. Many
engineering firms put in their contracts clauses that limit their
liability to the lesser of, say, $50,000 or their fees, whichever
is less, no matter how badly they perform. For many contaminated
sites in the GTA, $50,000 is just not a meaningful amount of money;
it is rarely enough to complete the work that the client had
already paid for.
When a client hires a professional to do a highly important job,
and pays for that job, they expect to be able to rely on the
result. This is particularly important when large amounts of money
are at stake. But under many engineering consulting contracts, the
consequences of an engineer's negligence fall almost entirely
on the client.
Powerful clients, like banks and the federal government, simply
won't sign these sorts of contracts. But individuals and small
to medium sized businesses often do. It creates injustice, and it
creates litigation. Hiring an engineer is not simply a question of
filling out a standard form. It involves a serious decision on the
allocation of risk, which the parties should realize they are
For this reason, I struck a committee of the Ontario Bar
Association and the Association of Consulting Engineers, to develop
a model environmental consulting contract that lawyers, engineers,
and their clients could use. If they do, the parties will have to
discuss and agree on critical risk allocation issues, such as
limitations of liability, insurance, the cost of extras such as
surface treatment restoration, etc. If clients want extra liability
protection, such as extra insurance or higher liability limits,
they may have to pay higher premiums to get it. Any paragraph that
is entitled "mutual indemnity" will actually be mutual,
instead of the usual one-sided language. Wouldn't that be an
Ontario's Ministry of the Environment and Climate Change continues to roll out its Climate Change Action Plan with its proposed GHG guide for projects that are subject to the province's Environmental Assessment Act.
The Imperial Oil refinery pled guilty to one offence for discharging a contaminant, coker stabilizer, thermocracked gas, into the natural environment causing an adverse effect and was fined $650,000...
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