Fees vs liability for design to be manufactured 3

[thejonster]

a mechanical engineer friend who runs his own business said that he was told to assume no liability for a design that will be manufactured, they're not hiring you for your insurance coverage, they're hiring you for your expertise.

How do you mech guys handle liability in design for a part that could be replicated 1000's of times? I was asked to design shear walls for a tiny house manufacturer and the low fee vs unlimited liability seems to be unreasonable to move forward if they don't want to pay per-use of the design.

This is related to a recent post
thread507-497347

 

[CWB1]

There is no such thing as being completely indemnified against liability. Even as an employee in product design you can be personally named as a codefendant alongside your employer, hence one of the major reasons for standard design process. Contractors typically require manufacturers to treat them similar to employees and indemnify them against the majority of lawsuits as a term of the contract. The unwritten asterisk however is that in cases of engineering malfeasance, the indemnification can be voided at the court's discretion. Liability is just risk, a combination of frequency and severity. IOW, the severity of lawsuits for ME's can be high but the frequency is extremely low, so you just do what you can to keep it low.

What that boils down to is that most contracting ME's have a token umbrella policy but are also very careful to follow standard design process and ethical practices to avoid losing their indemnification. Design only what you personally have experience with, and ensure your design goes through well-documented design-review, DFMEA, and other process checks with an experienced, multi-functional team. Free-wheeling, do-it-all sole-practitioners need not apply.

 

[Jboggs]

Good advice above. I've been an engineering consultant on and off for years, as was my father. One must ALWAYS assume that one's designs can be misused, assembled incorrectly, abused, etc. Your liability in those situations is more a case of "legal arguments" than defined law. If a lawyer can convince a jury, that's it.

Your phrase above "told to assume no liability" caught my eye. If you produce the design, the initial liability is yours. Period. You can't really choose "not to assume" it. True, others can "indemnify" you for it, promise not to sue, or even assume liability themselves, but all they're really doing in those cases is "protecting" you from your own liability, which is ALWAYS yours.

One thing my father told me which made sense is this: the lawyers in such cases are always going to go for the big fish. If you're a one-man operation running out of your basement (which I was at the time) you're affectively a pauper in their eyes. Your lack of assets can actually be somewhat of a protection. Errors and Omissions insurance premiums can be VERY expensive.

Your only real protection is in the way you conduct your business. Are you conservative in your designs, remaining within commonly practiced boundaries? Can you prove that? Are you open and honest with your clients and any contractors or users? Have you warned your clients in writing of any known or potential hazards? Have you gone out of your way to make sure you remain aware of any new technological advances or code revisions?

I have a photo at my desk that I always make sure remains clearly in my field of view. It is a shot of a large steel platform hanging sideways from an overhead crane. I designed that platform. When the operator of a steel melting furnace needed to perform maintenance on the pour spout of the furnace he could swing this platform into position using an overhead crane. Then while safely standing on an adjoining platform he could attach this maintenance platform to the front side of the melter, and lock it into position. One night an operator attached the platform but something in the lock mechanism got jammed. Since the platform was already "attached", this operator's solution was to get out on the unlocked platform (35 ft above a concrete floor) and jump on it to try to knock it into place. Instead it detached and flipped over sideways, leaving the 300 lb operator hanging from the siderails. He was able to get help and is ok. He was fired that night for violating written safety procedures. But if he had not been able to save himself with the siderails the outcome would have been MUCH worse.

I could legally say that situation was not my fault, but could you sleep at night knowing someone was badly injured or worse using one of your designs? Wouldn't you be asking yourself if there wasn't something more you could have done? Yes, I can blame the operator but I've been in this business long enough to know that sh__ happens. It is unavoidable. I've worked with guys that were missing fingers or eyes because they were thinking about that argument with their wife last night instead of concentrating on the job at the moment. No one is perfect, and we should design with that maxim in mind.

That's what I think of when I look at that photo in front of me.

 

[thejonster]

You are correct, my lawyer said I can't control my liability like I was thinking and indemnification has limits too. For this to work for Manuf / SE a process similar to what CWB1 discussed would be needed.

 

[rb1957]

"could you sleep at night knowing someone was badly injured or worse using one of your designs?" ... if there was nothing wrong with my design, and it was "user error" then I'd sleep ok. I cannot envision every way that someone my abuse my design, I am not that "god-like". People have to take responsibility for their own actions. I wonder if mgmt would have fired the worker if he had managed to get the platform locked and carried on with the work ? (I suspect they'd've said "good job".)

"Hoffen wir mal, dass alles gut geht !"
General Paulus, Nov 1942, outside Stalingrad after the launch of Operation Uranus.

 

[Jboggs]

"I wonder if mgmt would have fired the worker if he had managed to get the platform locked and carried on with the work ? (I suspect they'd've said "good job".)"
I can tell you this management would have definitely fired him. They are "dead serious" about it. I know many aren't, but this one is.

I also agree that we cannot foresee how folks will misuse our designs. My only point is that it is in my opinion less than professional to not take steps to anticipate some possible misuse, or misunderstanding of instructions, or lack of complete attention. I'm not taking blame for their mistakes. I'm just trying to prevent injury or even additional cost if I can.

 

[hendersdc]

There is a term in medical device development that I like "reasonably foreseeable misuse". We can design with that in mind (and document what cases we considered and designed against) but we can never foresee all possible misuse cases, people do crazy things!