To what extent can, or should, a design consultant be held responsible by their professional regulatory body for their client’s failure to follow the requirements of a contract with the Authority Having Jurisdiction (“AHJ”)? This interesting question arose in the context of a recent claim handled by the writer and provides a good opportunity to consider the legal differences between obligations imposed upon a design consultant by the rules of professional conduct and those pursuant to the law of negligence.
In the case at hand, the owner retained the design consultant to provide professional services in relation to the restoration of an existing house. Due to the heritage nature of the house and the applicable legislation, the owner was required to enter into a written agreement (the “Heritage Agreement”) with the AHJ, whereby the owner agreed to follow specific rules and requirements in relation to the restoration of the house, including re-using existing materials and installing only pre-approved materials. The design consultant was not a party to the Heritage Agreement but issued a confirmation (the “Confirmation”) to the AHJ undertaking to perform field reviews to ensure compliance with the Heritage Agreement.
During the course of construction, the owner violated the terms of the Heritage Agreement three times by failing to re-use existing materials found on the house and installing unapproved materials. In each instance, the design consultant discovered the breach after it had occurred. The AHJ complained to the design consultant’s professional regulatory body alleging that the design consultant breached the rules of professional conduct, failed to discharge the duties imposed by the Confirmation, and failed to mitigate the impact of the owner’s multiple breaches by continuing to allow the owner’s breaches to occur. The AHJ argued that the design consultant’s breaches had cost it additional time and resources, which it could not afford.
Ultimately, the professional regulatory body dismissed the complaint against the design professional, but only after extensive written submissions on the issues and an interview of the design consultant.
Rules of Professional Conduct vs. Common Law Principles of Negligence
A design consultant’s obligations and duties arise from the rules of professional conduct and the common law, however, they differ in scope and application. As confirmed by the Supreme Court of Canada in Galambos v. Perez, common law duties are separate and distinct from professional standards set out in a regulatory body’s bylaws or Code of Ethics:
… there is an important distinction between the rules of professional conduct and the law of negligence. Breach of one does not necessarily involve breach of the other. Conduct may be negligent but not breach rules of professional conduct, and breaching the rules of professional conduct is not necessarily negligence. Codes of professional conduct, while they are important statements of public policy with respect to the conduct of lawyers, are designed to serve as a guide to lawyers and are typically enforced in disciplinary proceedings. They are of importance in determining the nature and extent of duties flowing from a professional relationship: … They are not, however, binding on the courts and do not necessarily describe the applicable duty or standard of care in negligence: [citations omitted].
A professional regulatory body has no jurisdiction to consider the scope of a design consultant’s alleged common law duties, nor any ability to judge the design consultant for those alleged breaches. The proper forum to advance a claim upon a breach of common law duties is an action before the Supreme Court. Conversely, the Supreme Court is not the forum to consider breaches of professional ethics.
In the case under consideration, the complainant alleged that the design consultant breached the following professional bylaws: (1) the requirement to act with reasonable care and competence and knowledge, skill and judgment; (2) the requirement to perform professional services only when qualified; and (3) the requirement to comply with all applicable laws.
The Confirmation provided by the design consultant in this case was similar to a Schedule B Letter of Assurance issued pursuant to the British Columbia Building Code. That document evidenced the design consultant’s agreement to undertake field review and notify the AHJ in writing if the contract for field review was terminated. No other duties or obligations were imposed upon the design consultant in the Confirmation. The design consultant had no contract with the AHJ.
The complaint against the design consultant was framed in negligence language and premised upon the (implied) assumption that the design consultant owed the AHJ a duty of care. The complainant argued that the design consultant failed to supervise the project (i.e. the owner) to the “standard of a reasonably competent” design consultant and to give “due regard” to the complainant’s interests. The complainant asserted that the design consultant’s actions must be judged as to whether they were “reasonable”, regardless of the behaviour of the client. Put more simply, the complainant’s argument was that the design consultant knew, after the first breach of the Heritage Agreement, that the owner had a propensity for non-compliance and that, as such, the design consultant had a duty to increase supervision of the project to police the owner and proactively ensure that no further breaches occurred. Although the design consultant was not a party to the Heritage Agreement, the complainant asserted that the design consultant’s professional obligations extended to impose such duties.
The case at hand confirms that negligence principles do not provide a basis for a professional conduct complaint. As stated by the Supreme Court of Canada in Perez, there is an important distinction between the rules of professional conduct and the law of negligence. Breach of one does not necessarily involve breach of the other. Conduct may be negligent but not a breach of the rules of professional conduct, and breaching the rules of professional conduct is not necessarily negligence. In this particular case, the design consultant breached neither a duty of care (as none was owed) nor the rules of professional conduct.
The client’s breach of contract puts the design consultant in a difficult position, and the design consultant may have to consider whether resignation from the project (in order to avoid a potential future breach of contract claim) is the most prudent course of action. However, unless there is a specific contractual requirement, or the particular circumstances of the case give rise to a duty of care, a design consultant should have no duty to guard against the actions of non-compliant clients. There is no public policy that would warrant the imposition of such a duty upon a design consultant. This would be far too onerous and ignore the practical realities of the profession and the role of the design consultant.
 2009 SCC 48 at para. 29.