Infrastructure Canada Program: ACEC helps limit the liability of consulting firms

As a result of ACEC representations regarding the indemnification clauses in the Infrastructure Canada Agreements, the Government of Canada will be consulting provinces and territories with a view to seeking their concurrence in amending the clause (as proposed by ACEC) to limit the liability of consulting firms. The original clauses were clearly unfair to the consultant, and government officials at the federal and provincial level demonstrated a willingness to find an acceptable approach.

ACEC had been advised in December 2001 by member firms that some contracts for projects funded by the Federal Infrastructure Program contained indemnification clauses imposing abusive liability on the consultant. ACEC believed that consultants’ liabilities should be limited to the extent of the professional services rendered. ACEC made the case that indemnification clauses should clearly address that fact and avoid imposing liability above what the law imposes — i.e. that negligence must be established.

Engineering firms currently working on an Infrastructure Canada funded project are strongly advised by ACEC to examine the indemnification clauses of contracts to ensure that they do not extend beyond professional responsibilities. A new standard indemnification clause imposing balanced liability to the consultant and the municipality has now been presented to the provincial secretariats of the Infrastructure Program. For more information about this issue or to share information on other issues requiring ACEC collaboration or assistance, please contact Mr. Richard Roulx, ACEC Manager of Business Practices and Government Relations at 1-800-565-0569.