July 23, 2012

Engineers use talk-show format to discuss business risks

PATRICIA WILLIAMS

DCN staff writer

In consulting engineering circles, the subject of business risks tends to be a perennial agenda item at industry conferences.

But as John Gamble, president of the Association of Consulting Engineering Companies - Canada is the first to admit, the topic can be a tad dry.

So, in an effort to make the subject more engaging, the association opted for an informal talk-show format for a session at its 2012 annual summit, as an alternative to the more usual canned Powerpoint presentations.

Gamble acted as host, asking questions of casually seated “guests” Stephen Panciuk, vice-president, architects & engineers at insurance company Encon and lawyer Owen Pawson, a partner in Miller Thomson LLP. Both are members of the ACEC’s contracts committee.

The title of the one-hour session was: ‘What are the top risks to your business? If they aren’t keeping you awake they should be!”

Panciuk and Pawson commented on the insurance and legal implications of a dozen famous last words commonly uttered by consultants.

The list included such phrases as:

It’s a small job. I know the client. I don’t need a contract;

I have no idea what that clause means, but it must be okay or they wouldn’t put it in the contract; and

I’m sending this to you by email because I don’t want to put it in writing.

In their comments, both speakers underlined the importance of written contracts, no matter the size of the job. ACEC is currently revising its suite of standard contract documents.

Panciuk joined Encon as a claims analyst for the architects and engineers program in 1997. He moved to the underwriting team in 2004 and now manages the architects and engineers department.

He said there is no correlation between the size of fees and potential claims.

“I would say that of all the messages that we are going to deliver from the insurance perspective, having a good, written contract is definitely in the top three,” he said.

Pawson, whose clients include construction companies, as well as design professionals and government agencies, agreed, noting that it is advisable to have contracts in place with subconsultants as well.

“You find out how friendly you are after things go south and you don’t have a contract,” he said.

Pawson shared his thoughts on email correspondence.

“The first thing litigators will ask for is your hard drive because in this day and age, electronic communication is pretty much a given,” he said.

“Even if you tried to erase your hard drive, there are people on the forensics side of things who can recover the stuff you thought you erased. So, I would be very, very cautious about taking this approach.”

Some of the famous last words pertained to dealings with contractors.

Phrases included:

So then I told the foreman, those guys don’t need fall protection;

The contractor can’t sue me over the bid documents. There’s no contract between us;

You’re right. It can’t be built like that. But don’t tell the owner. I’ll just fix the drawing. It won’t be an extra — will it?.

On the matter of fall protection, the audience was reminded that the contractor is responsible for construction means, methods and techniques under typical contractor-owner agreements.

“Don’t take on that liability,” Pawson said.

In an interview later, Gamble said he and the two panelists came up with the list of famous last words after they had bandied about some ideas for the session.

“Our first thought was to put up some legal clauses that we commonly see,” he said. “But, we concluded that would make for a dry presentation. We wanted to frame these issues in a way that might come up in conversation.”

Gamble said feedback from consulting engineers attending the session has been extremely positive.

The summit was held at the Rodd Brudenell River Resort in P.E.I.

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