Risk Management and Liability Flashcards

Under Canadian law, what is the 'but for' test in causation, and why is it important in professional liability claims?

Answer: A test for whether the defendant's negligence caused the plaintiff's harm: would the harm have occurred but for the defendant's negligence?

The 'but for' test asks whether the plaintiff's harm would not have occurred but for the defendant's negligent act. It is the primary causation test in Canadian negligence law and is essential for establishing liability in professional negligence claims.

A professional engineer's negligent design causes physical damage to a building but also financial losses to the building's tenants (business interruption). Under Canadian tort law, which losses are recoverable?

Answer: Both the physical damage and the tenants' consequential economic loss flowing from the physical damage, subject to foreseeability

Where physical damage is caused, consequential economic losses (such as business interruption) that flow foreseeably from that damage are recoverable in negligence, subject to the principles of remoteness.

What is 'contributory negligence' and how does it affect a professional engineering liability claim in Canada?

Answer: Negligence by the plaintiff that contributes to their own loss, which reduces (apportions) the damages recoverable from the defendant

Contributory negligence occurs when the plaintiff's own negligence contributes to their harm. Under contributory negligence legislation in Canadian provinces, the court apportions fault and reduces the plaintiff's damages by their percentage of responsibility.

Which Canadian case is frequently cited for the principle that a manufacturer (or designer) may owe a duty of care in tort directly to an end user with whom they have no contract?

Answer: Donoghue v Stevenson [1932] UKHL 100 (adopted in Canada)

Donoghue v Stevenson [1932], adopted as binding precedent in Canada, established that a manufacturer owes a duty of care to end consumers even without a contract, based on the 'neighbour principle' — reasonable foreseeability of harm.

In assessing damages in a professional liability claim against an engineer, what is the principle of 'mitigation of loss'?

Answer: The plaintiff's duty to take reasonable steps to minimise their losses after suffering harm — failure to do so can reduce the recoverable damages

The mitigation principle requires the plaintiff to take reasonable steps to minimise their losses after the harm occurs. Unreasonably failing to mitigate reduces the recoverable damages by the amount that could reasonably have been avoided.

What is a 'professional indemnity' clause in a sub-consulting agreement, and why is it important for prime consultants?

Answer: A clause requiring the sub-consultant to indemnify the prime consultant against claims arising from the sub-consultant's own professional negligence

A professional indemnity clause in a sub-consulting agreement requires the sub-consultant to indemnify the prime consultant for liability arising from the sub-consultant's professional negligence, protecting the prime consultant from bearing the cost of another professional's errors.