The Consulting Engineers Association has begun negotiations with the Ontario Bar Association on a possible framework agreement for consulting/contracting services provided by engineers on environmental projects.

Are the contracts fair?

Over the last several years, many engineering consulting firms have adopted standard terms and conditions that we think lack fundamental fairness between client and consultant. While consultants are sometimes willing to negotiate less unfair terms on a project by project basis, this is often too expensive for small or medium-sized businesses, many of whom do not realize that the fundamental bargain between themselves and their engineers has changed.

Allocating liability

We are therefore exploring the concept of a framework agreement that would require clients and consultants to agree expressly on how various risks are to be allocated between them, given the nature of the work and the amount of fees involved.  This is particularly important in the area of insurance, since PEO’s minimum policies of $250,000 (including the engineer’s own defence costs) are inadequate for most environmental matters.  Other important issues include limits of liability, limits on damages, ownership of reports, reliance on such reports, and what services count as “engineering” for regulatory and insurance purposes.