New Wave

Engineers are now liable to prosecution in British Columbia under the Workers Compensation Act. Also, there is a rumour that the Workers Compensation Board has an unofficial policy to target the construction industry in B.C. for prosecutions under the Act. The mandate to prosecute is a new development in the province. This change means that engineers producing designs relating to potentially hazardous construction sites — for example, shoring an excavation site or calling for the use of potentially hazardous materials — need to be aware that in the absence of a due diligence defence they risk incurring legal consequences that go beyond civil liability.

Each province and territory in Canada has some version of the Workers Compensation Act and Industrial Health and Safety Regulations. In Ontario, prosecutions under the Workers Compensation Act have been going on for some time. Alberta and the Yukon have had occasional prosecutions, usually when workers died as a result of an employer’s failure to hire, train, equip and supervise workers properly. But elsewhere in Canada, although the equivalent legislation is in place, prosecutions have not been routine.

The situation changed recently in British Columbia. A provincial Crown counsel has been seconded to work with the Workers Compensation Branch and its in-house legal counsel. He approves charges requested by the Workers Compensation Branch and prosecutes the charges through trial in provincial court. About seven sets of charges were laid in 1996 and 1997.

One set of charges, for example, was against Allspan Engineering and Construction, one of its officers and a project design engineer. The case involved the collapse of a bridge which potentially could have killed 17 workers. A summary of the charges, laid in August 1996, is as follows:

1. failure to provide erection drawings and supplementary information for falsework and formwork that indicated the sequence, method, and rate of concrete placement in order to prevent overloading of any part of the formwork;

2. failure to provide erection drawings and supplementary information for falsework and formwork that indicated sufficient information regarding loads, moments and deflections so as to permit the design of the formwork and falsework to be verified by a registered professional engineer;

3. failure to obtain the seal of a registered professional engineer for erection;

4. failure to provide structurally complete erection drawings and supplementary information; and

5. failure to obtain the signature, seal and written certificate of a registered professional engineer for formwork and falsework prior to a concrete pour.

After negotiations between the defence counsel and the Crown counsel, convictions were registered in October 1998 against only the engineering firm, not the individuals, and only on counts 2. and 5. The firm was ordered to pay a fine.

Consulting engineers could already be sued in civil law for negligence, for breach of contract, and in severe cases could even be prosecuted under the Criminal Code for criminal negligence. What the new policy in B.C. means is that now they may also be liable to quasi-criminal prosecution in criminal court for breaches of the Industrial Health and Safety Regulations and the Workers Compensation Act. In addition to facing possible conviction in court, firms may be involved in an administrative tribunal process in the Workers Compensation Branch which carries fines and penalties upon finding any breach of the act or regulations. The company’s rating is then affected and it has to pay higher annual premiums.

The defence could argue that the engineer acted with due diligence against such charges. An example of where this defence could apply is when a firm has made diligent enquiries of someone when hiring him or her, trains the person appropriately in the job, and after initial close monitoring only periodically checks his or her performance. If the employee then has a lapse in judgement of a kind of which no hint had been given in the past, the employer could argue that it did everything it reasonably could have done to avoid the accident caused by its employee. At trial the issue is proof. Documented evidence of training, supervision, performance review and such matters is vital.

Another defence could involve a charge relating to inadequate site supervision. A due diligence defence could entail expert evidence to show that periodic site inspection not only met the standard of safety and care, but also should have been all that was required in the circumstances of the case. Once again, written records would be crucial to the defence, this time showing site attendance and instructions given. Also crucial would be expert evidence.

All engineers need to refresh their knowledge of the Workers Compensation Act sections and regulations which may be relevant to the kind of work they do. They should consult specific sections that call for documentation procedures to prove compliance with the law.

A guilty plea or conviction in B.C. currently carries a potential maximum fine of $38,000. The fine is indexed and increases annually. An individual engineer could be jailed for up to three months. Counterpart workers compensation legislation in other provinces either already has similar sentence options or likely soon will.

A trial of Workers Compensation Act charges in provincial court could take as long as two weeks, not including preparation time. Typically it would be necessary to call expert evidence on standard practice and the standard of care in the profession. The cost of a trial could therefore run to tens of thousands of dollars.

Firms carrying errors and omissions insurance should ask their insurance broker if the cost of defending such prosecutions is insurable. To the best of our knowledge, currently such risks are not insurable.

An engineering firm could also be assessed an administrative penalty by the Workers Compensation Board, which has a hearing and appeals process separate from the court system. The penalties are fines, and the firm’s rating is affected, which entails paying higher contributions to the board.

Remember the days about 15 years ago when environmental legislation was new? Once the policy to enforce the legislation came into being, prosecutions soon became routine and are now here to stay. Industrial practices have changed as a result, and the cost of doing business has increased.

Similarly, the Workers Compensation Board in B.C. is seeking to reform the practices of the construction industry. As a result, consulting engineering firms in B.C. have to shoulder yet another potential legal and financial burden — one which Ontario firms already carry and which soon could be loaded onto the backs of those in other provinces as well.

MARINA MORGAN, LLBSHAPIRO HANKINSON & KNUTSON, BARRISTERS AND SOLICITORS, VANCOUVER, B.C.