Ethics Double Check 9

[KootK]

The situation:

1) I have a contractor client that accounts for 5%-10% of my annual revenue.

2) This contractor did some work on a property and, in the course of that work, may have done some inadvertent damage to the structure. This is the property owner's claim. The contractor doesn't really agree but has done some DIY reinforcement anyhow.

3) The property owner wants a structural engineer to sign off on the damage / repairs before paying the contractor for their services.

4) The contractor has engaged me to help the property owner with this. They see this as a favor that they are trying to do for the property owner. They've not leaned on me to influence my recommendations etc. They just want to do what's right and exit the situation with their reputation in tact as much as possible.

5) The property owner has raised the question as to whether or not this is a conflict of interest for me.

Is this a conflict of interest for me? My instincts are not always great on this stuff. I just like to work and ride my bike(s).

Yes, I do have a vested interest in helping my contractor client to solve their problem. However, I consider that interest to be trumped by my ethical obligations to our profession and the public.

Frankly, I struggle to envision a real world assignment where I would not have some vested interest in helping my clients in ways that would be in opposition to my ethical obligations. It's a constant balancing act. Saving people money and making whacky architectural dreams come true is the cornerstone of my business after all.

What say you?

 

[mfgenggear]

For a long time and may be as well as today
Manufacturing engineers and design engineers
Had a bad rap. Unable to fulfill contracts and delivery schedules that were nearly impossible to manufacture no less delivered on the schedule
Negotiated by management. Yet it was always the engineers fault. It could not be built in the time frame. So short cuts were the result.

Koot all we have is our integrity. Our self ethics.
I not an expert in your field. And for sure I not trying to be. However.
This much I do know , there are intervals of build and inspections. And the reason is for integrity
Of the build, And construction.

results of customer suing their contractor.
Is bad construction.
I once ask quotes for a replacement of main fuse box. Upgrade for more ampere. I asked for a permit.
Electrical contractors replied with no permit required. I did not contract with those contractors.

 

[KootK]

results of customer suing their contractor.
Is bad construction.

It's more nuanced than that.

The contractor did nothing wrong in terms of process other than initiating an engineered fix on something that probably didn't need to be fixed without documenting the "before" condition.

In this situation, the contractor is doing work that:

1) Society implicitly acknowledges the need for, even if it involves some risk.

2) Is inordinately difficult to execute without causing some degree of structural damage.

In a way, the issue has only come about because the property owner is an engineer and therefore can recognize the compromise that has been made.

 

[JoshPlumSE]

I just want to thank everyone here for this thread.

Honestly, this could be a lecture in "engineering ethics" at a local university. I remember the department at UCSD (when I was there in the mid to late 90's) really wanted assistance from the SEAOC and ASCE clubs really wanted to get some more documented efforts to deal with engineering ethics.

 

[EZBuilding]

I think there is a conflict of interest, but it's the same conflict of interest that occurs in every situation where an engineer is hired by the proejct's contractor. In these instances, I think the disclosure of the conflict of interest is what should be ethically required. If the owner wants to limit his risks relative to this conflict of interest, he can choose to hire his own engineer and litigate the issue.

Reading the email, it seems you have an educated and informed owner. Seems like a phone call to explain yourself, your thought process and approach may put his mind at ease. That is probably the best case scenario for all involved - including the owner.

Personally - you may want to consider some risk-mitigation strategies in your agreement with the subcontractor. A limit of liability and a duty to defend clause seems like a reasonable request to ensure that you don't have outsized risk relative to your fee on this project or even the profits from your relationship with this client.

 

[KootK]

I think there is a conflict of interest, but it's the same conflict of interest that occurs in every situation where an engineer is hired by the proejct's contractor.

I've come to see it the same with a gradually evolving understanding of just what a conflict of interest is.

I have conflicted interests here, so it's a conflict of interest. That said, and echoing somebody's earlier comment, that doesn't preclude my ethical involvement so long as everyone understands just what my interests are.

A limit of liability and a duty to defend clause seems like a reasonable request to ensure that you don't have outsized risk relative to your fee on this project or even the profits from your relationship with this client.

That could be fun. This particular client recently had me add them to my policy as a "named insured" which is kind of the reverse. It turned out to be no big deal with no impact on my premiums but it's the first time that I've been asked to do this.

 

[KootK]

What do you mean he “doesn’t really agree?”

The contractor views the "damage" as a natural and structurally insignificant consequence of the work that was required. They only executed the repair that they undertook to assuage the property owner. Which, in retrospect, may well have been an error.

Thanks for your thoughtful response. As other's have mentioned, it was exceptionally articulate.

 

[phamENG]

This particular client recently had me add them to my policy as a "named insured"

They should probably be made aware that will preclude them from collecting any money from you. It's like getting into a car accident with your wife. They're not going to pay somebody else that's on the same insurance policy. At least, that's how my insurer explains it in the annual webinars as they laugh about people who do this...

 

[phamENG]

@KootK : not from my insurer, but a good write up and it aligns with what my insurer tells me. So Your Client Wants to be Additional Insured

 

[SWComposites]

KootK - as long as you are being paid by the contractor, I don't see an issue. If you were being paid by the homeowner, then there could definitely be a conflict of interest. If the homeowner does not accept your analysis or the contractor' position, they are free to hire their own structural consultant.

Regardless of the result, I would put this homeowner on your "do not work for" list.

 

[Once20036]

I`ve always heard that the question isn't about whether or not theres a conflict of interest, but rather whether or not there's the appearance of a conflict of interest.
If I was the owner, I`d be looking to hire my own guy. If I was a lawyer, I`d look to have all your results thrown out (thanks ANE91).

I don't see any issues with proceeding with the work, but why bother if the owner and courts are likely to reject that work?

 

[XR250]

They should probably be made aware that will preclude them from collecting any money from you. It's like getting into a car accident with your wife. They're not going to pay somebody else that's on the same insurance policy. At least, that's how my insurer explains it in the annual webinars as they laugh about people who do this...

Yea, same here (since we have the same insurer). I get this request about 4 times per year. I try to explain that to the customer but they have a dumb lawyer somewhere who thinks they are being smart. Makes sense why the insurers are quick to add this to our policies as it reduces their exposure instead of increasing it.

 

[KootK]

@KootK : not from my insurer, but a good write up and it aligns with what my insurer tells me. So Your Client Wants to be Additional Insured

I want that. But the link was bunk. Can you check and repost?

I thought the whole thing sounded a little fishy. But my insurer brushed it off as common place. On one level, I don't want to have to list everybody that I've ever work with as an additional insured. I'm happy to just allow anybody to sue me for my shoddy work.

 

[KootK]

I try to explain that to the customer but they have a dumb lawyer somewhere who thinks they are being smart.

This is one of the few clients that I have with in-house legal counsel.

 

[phamENG]

Can you check and repost?

Yeah. I screwed that up pretty bad.

https://www.oswaldcompanies.com/wp-...our-Client-Wants-to-Be-Additional-Insured.pdf

 

[KootK]

Ok, I owe my client's lawyer an apology. They wanted to be added on my General Liability and not my Professional Liability. Which jives with that article. My insurer won't allow me to add additional insureds to my Professional Liability. And for good reason it seems.

 

[skeletron]

The contractor is being asked to provide an engineer to sign off on the work? Or is the homeowner paying you? If the contractor is paying for the engineering, then they are allowed to hire whoever they want. If the owner is paying, well they can find someone else if they like, as long as you have disclosed your relationship to the contractor it's fine.

This is the simplest and most agreeable take. Reading through some, not all, of the thread responses also indicates that the owner may be acting a little more prickly than they need to be...perhaps rightfully so under the circumstances. But if they want an "independent" engineering assessment then the Owner should probably hire out their own engineer (not the one recommended by the contractor who botched things to start) and then forward the bill. But I think that is where the trickiness comes from (i.e. Owner doesn't want to be inconvenienced by the legwork to hire another engineer, Owner wants power role over contractor, Owner doesn't want to forward a bill that may be unpaid for several months, Owner wants contractor to pay the expense).

I do think there is a conflict of interest based on the contractor providing regular work to you and also being part of your insurance policy. However, a good engineer would be able to still approach the project with an objective viewpoint. I also believe that you can disclose the conflict of interest and, if acceptable to all parties, continue to do the work.

Disclose. Document. Complete the assignment or move on.

 

[mfgenggear]

OP
Consult a lawyer. Not other engineers.
This could go smooth, and the owner except the engineering. And that would be great.
But then there's Murphys law. We all know it to well. This contractor is in a pickle. The question is will the owner accept it, then there is a problem.
Lawyers and courts cost thousands. And if you lose then one has to pay the plantifs lawyer and court cost. This is Russian roulette.
If you decide to proceed . Look ahead and document it very well. Weight the money earn
And is it worth the risk.

 

[KootK]

It seems like there's a lot of jumping from this to "they wanted the contractor to get somebody." @KootK , is that the case? Did they ask the contractor to call somebody? Or did they say that's what they wanted, and the contractor tried to get ahead of things?

Let's see...

The homeowner is dissatisfied with the contractor's performance on a number of fronts, not just this structural bit. They prepared a deficiency report that, it seems to me, is targeting a resolution of a scale much larger than "please fix / sign off on my damages roof framing". In that deficiency report, they said something to the tune of "Here's some structural damage that you guys caused. You attempted to fix it but you are not structural engineers. So I still expect that a qualified structural engineer will review the situation."

So, no, the owner did not explicitly ask the contractor to recommend / engage an engineer. The contractor's perspective is that they want out of this mess and they would like to get paid for some or all of their work. Before that can happen, it seems that they need to address all of the items in the deficiency report. So, to address this particular item, they have elected to "get ahead of it" by offering my services to the home owner. The damage that we're talking here is pretty far from being catastrophic by any reasonable standard. My own, virgin roof from 1978 has way more problems that I don't worry about at all. Granted, I'm well qualified to be underwhelmed.

 

[KootK]

Consult a lawyer. Not other engineers.

Not gonna happen. Firstly, it's just not my style. Secondly, I've played chicken with a number of legal hiccups in the past, sans lawyer, and haven't been burned yet. So I'm emboldened for better or worse. Thirdly, I absolutely love to hear what other engineers have to say about this kind of thing.

And is it worth the risk.

Yes, I believe that it will be worth the risk. But who really knows? My ATF engineering books are shown below. They've revolutionized my thinking. As engineers, we're trained to be so risk adverse in our work that we let that spill over into our businesses and lives in unhealthy ways.

All you ever hear about here is how stressed out engineers are, how hard it is for them to make good money, and how they wish that they'd chosen other career paths. This is why. Taking a mature, probabilistic view of uncertainty is the very foundation of mental health. It's how our brains work (large language models). It's trying too hard to be safe that ultimately makes us miserable. Nobody wants to drown but everybody needs to surf.

If I retire without enduring a significant lawsuit, I will consider myself to have played things much too safe. And I don't say that to seem hip and nonchalant. I'm 100% serious. And I'm running out of time.

 

[ANE91]

New info…adding the below to the discussion.

I’m reading a lot of comments that lean into the idea of client = who pays. That is not a complete truth. There are ordering clients, paying clients, etc. The homeowner’s email explicitly expresses his/her intent to “engage” (read:retain) @KootK. Your obligations (if any) to each party must be clarified. If it can be argued that (1) the engineer has a duty to the homeowner beyond that which is extended by default to the public, in parallel with (2) the engineer’s duty to the contractor, who will pay the engineer for this matter and may increase/decrease future work based on the outcome of this matter, then a conflict of interest is evident and no longer a matter of perception.

Verbal contracts, and, by extension, emails using contract-like language or language that could successfully be interpreted by an adverse party to create a contractual relationship, are almost always valid and enforceable and should be treated as such.