Due Diligence Engineering

Transcription

1 Objective Engineering To outline the concept of due diligence engineering particularly as it applies to engineering design. Townsville Regional Group Richard Robinson 17th March 2015 The Plan 1. What is due diligence? 2. How did the concept arise? 3. What is due diligence engineering? 4. How is it applied in design? Curragh Boom Drop

2 The Reasonable Person Due diligence is a legal concept. It represents an aspect of moral philosophy, that is, how the world ought to be and how humanity should behave in order to bring this about. It is forensically tested by our courts with the advantage of hindsight, for example, using the reasonable person test. The reasonable person is not any particular person or an average person The reasonable person looks before he leaps, never pets a strange dog, waits for the airplane to come to a complete stop at the gate before unbuckling his seatbelt, and otherwise engages in the type of cautious conduct that annoys the rest of us This excellent but odious character stands like a monument in our courts of justice, vainly appealing to his fellow citizens to order their lives after his own example. J M Feinman (2010). Law 101. Everything You Need to Know About American Law. Oxford University Press. Page 159. Due diligence is about the management of downside risk Conceptually, due diligence appears as a manifestation of the ethic of reciprocity or the golden rule, historically prevalent in major philosophies and religions, along the lines that one should treat others as you would like to be treated by them. safety business project

3 Due diligence (legally) seems to manifest itself in at least two ways: 1. As a defence against negligence in common (case) law, and 2. In statute law, especially for fiduciary concerns, environmental issues, and most recently, health & safety matters. Origins How did the concept of due diligence legally arise? The Common Law According to (Sir) Tony Robinson (aka Baldric): HEADING GOES HERE Use this slide for a main topic with yellow accents for important points The common law particularly flows from King Henry II (circa 1266) and a desire to extend the influence of the King s justice by sending Lord Judges on circuits, consistently applying the common laws observed in the various feudal fiefdoms, thereby superseding the justice systems of the local aristocracy and enhancing the power of the king.

4 Negligence The case that launched the negligence tide is generally recognised as Donaghue vs Stevenson (1932). Essentially this tested the responsibility of a drinks manufacturer for a stomach ache resulting from a late discovered decomposed snail in an opaque soft drink bottle, purchased by one of two friends to share. Until that time, the liability for a bad product rested with the contractual arrangement between the seller and buyer, not a third party friend with whom the drink was shared and who fell ill. See viewed 17 July 2013 Donoghue v. Stevenson (1932) M'ALISTER or DONOGHUE (Pauper) Appellant v. STEVENSON. Respondent Lords Present Lord Buckmaster Lord Atkin Lord Tomlin Lord Thankerton Lord Macmillan Judgment See viewed 17 July 2013 Interestingly, it was a split decision by the 5 judges in the UK House of Lords as to whether or not the case could proceed at all since the potential liability to the manufacturer lay outside the existing buyerseller contract. The minority was concerned that a finding for the plaintiff would launch an uncontrolled avalanche of negligence claims in common law jurisdictions, a concern that has pretty much eventuated. The majority decision favoured to adopt the golden rule of most major philosophies and religions. This is usually expressed in the Christian tradition, as: do unto others as you would have done unto you (the principle of reciprocity). That is, it was felt that the soft drink manufacturer owed a duty of care to any reasonably foreseeable consumer, not just the one who purchased the soft drink.

5 Lord Atkin The rule that you are to love your neighbour becomes in law you must not injure your neighbour; and the lawyer's question "Who is my neighbour?" receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who then in law is my neighbour? The answer seems to be persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question. Negligence An action in tort law, the elements of which are: the existence of a duty of care; breach of that duty; and reasonably foreseeable damage as a consequence of the breach of duty... Whether the defendant has breached this duty of care is determined by considering the standard of care a reasonable person would have exercised in the circumstances, including taking reasonable precautions to avoid the risk of harm... The type of damage, not its extent, must be foreseeable. LexisNexis Concise Australian Legal Dictionary (4th Edition) Due diligence - a common law defence against negligence Where it is possible to guard against a foreseeable risk, which, though perhaps not great, nevertheless cannot be called remote or fanciful, by adopting a means, which involves little difficulty or expense, the failure to adopt such means will in general be negligent. in Legislation Some examples: Commonwealth Corporations Act (2001) Model Work Health and Safety Act/s (2011) Rail Safety National Law Act/s (2012) NSW Protection of the Environment Act (1997) Chief Justice Sir Harry Gibbs. Turner v. The State of South Australia (1982) (High Court of Australia before Gibbs CJ, Murphy, Brennan, Deane and Dawson JJ).

6 NSW Protection of the Environment Act General defence for tier 1 offences It is a defence in any proceedings against a person for an offence under this Part if the person establishes: (a) that the commission of the offence was due to causes over which the person had no control, and (b) that the person took reasonable precautions and exercised due diligence to prevent the commission of the offence. Model WHS Act/s 27 Duty of officers (1) If a person conducting a business or undertaking has a duty or obligation under this Act, an officer of the person conducting the business or undertaking must exercise due diligence to ensure that the person conducting the business or undertaking complies with that duty or obligation. Engineering Engineering is all about aligning the laws of man and nature Due diligence engineering is the reverse engineering of the decisions of our courts. That is, discovering the technological principles of court decisions through analysis of their structure, logic and argument. This can be problematic for new legislation for which no test cases are apparent as, in such circumstances, convergent, pre-event legal opinion is unavailable. Societal objectives To be prosperous, safe, efficient, sustainable and happy Physical reality Don't harm neighbours, either deliberately or inadvertently Legal prescriptions Acts of parliament and the common law The laws of nature (scientists) Due diligence (engineers) The laws of man (lawyers)

7 Hazard vs precaution Hazard focussed Future uncertainty Decision re hazard Unwanted Event/s Judgement Future uncertainty Technical risk targets Safety critical Time SFAIRP approach (precaution based and criticality driven) Preventability Identify all practicable precautions for each critical hazard following the hierarchy of controls Reasonableness Determine which practicable precautions are reasonable based on the High Court established balance (disproportionality) Criticality Establish critical hazards Hazard identification (Foreseeability) Risk Management of downside (negative or pure) risk ISO31000 approach (hazard based and risk driven) Hazard analysis and risk calculation process to determine the nature of risk and the level of risk (inherently unrepeatable) Selected risk criteria terms of reference against which the significance of a risk is evaluated (inherently subjective) Compare against criteria process of comparing the results of risk analysis with risk criteria to determine whether the risk and/or its magnitude is acceptable (may eliminate further consideration of acceptable or tolerable risks) Precaution focussed Judicial Scrutiny SFAIRP vs ISO Implementation of reasonably practicable precautions SFAIRP ALARP Monitoring and Review (Quality assurance) Risk mitigation and management options process to modify risk. (may not follow the hierarchy of controls) Hazard vs precaution Hazard based e.g. AS/NZS ISO Precaution based Reasonableness Establish the context Risk assessment (hazard based): (Hazard) risk identification (Hazard) risk analysis (Hazard) risk evaluation* Risk treatment Establish the context Risk assessment (precaution based): Identify credible, critical issues Identify precautionary options Risk-effort balance evaluation Risk action (treatment) The point is to ensure that all reasonable practicable precautions are in place, not to achieve an indefensible target level of risk or safety. * From the definition in the standard: 2.24 risk evaluation process of comparing the results of risk analysis (2.21) with risk criteria (2.22) to determine whether the risk (2.1) and/or its magnitude is acceptable or tolerable MAGNITUDE OF RISK PROBABILITY OF OCCURANCE SEVERITY OF HARM EXPENSE DIFFICULTY AND INCONVENIENCE UTILITY OF CONDUCT

8 What is reasonably practicable is an objective test What is reasonably practicable is determined objectively. This means that a duty-holder must meet the standard of behaviour expected of a reasonable person in the duty-holder s position and who is required to comply with the same duty. There are two elements to what is reasonably practicable. A duty-holder must first consider what can be done - that is, what is possible in the circumstances for ensuring health and safety. They must then consider whether it is reasonable, in the circumstances to do all that is possible. This means that what can be done should be done unless it is reasonable in the circumstances for the duty-holder to do something less. INTERPRETIVE GUIDELINE MODEL WORK HEALTH AND SAFETY ACT THE MEANING OF REASONABLY PRACTICABLE Reasonableness Approved or common practice may or may not be reasonable. Compliance with standards and codes of practice is a starting point, not a goal. In an ar2cle in Engineers Australia Magazine of March Engineers cannot avoid liability in negligence or for TPA contraven2on by simply relying on a current or published standard or code. (Page 38) Leigh Duthie is a partner and Phillipa Murphy and Angela Sevenson are senior associates of Baker & McKenzie in Melbourne. Reasonableness R2A s Approach Engineers should remember that in the eyes of the court, in the absence of any legislative or contractual requirement, an Australian Standard amounts only to an expert opinion about usual or recommended practice. Also, that in the performance of any design, reliance on an Australian Standard does not relieve an engineer from a duty exercise his or her skill and expertise. Defensible risk management or due diligence engineering. That is, aligning the laws of man with the laws of nature. In terms of safety, managing the laws of nature is logically prior to managing the laws of man. Paul Wentworth, Partner, Minter Ellison (28 March 2011) AS/NZS 7000:legal status of standards and relevance to professional liability

9 R2A s Approach Engineering Disproportionality decision making system Credible, critical issues MAGNITUDE OF RISK PROBABILITY OF OCCURANCE SEVERITY OF HARM Precautionary options EXPENSE DIFFICULTY AND INCONVENIENCE UTILITY OF CONDUCT 1. Completeness check - argument to establish all credible critical issues. 2. Identification of all possible practicable precautions for each issue. 3. Determination of the reasonableness of the practicable precautions - in the circumstances. 4. Implementation of a QA system to ensure that s what s been agreed is implemented and sustained. Precautions QA system Grounding of the Tai Ping at Southport Threat Scenarios Vulnerabilities and Escalation Scenarios Preliminary Passage Plan error Passage Plan error Lapstone Cutting c1920s Use this slide for a main topic with yellow accents for important points Agreed Passage Plan error Pilot Execution Error Helmsman error Loss of Control Outside operating envelope Track, speed, leeway at channel abort points and in Reach 3. Loss of visual nav aids Ship breakdown

10 HEADING GOES HERE Use this slide for a main topic with yellow accents for important points Derailment potentials into the gorge Lapstone Cutting mid 2000s Coffey Geosciences Pty Ltd ACN Drawn Approved MH / AJH PJW Date 21/9/06 Scale NTS! Geotechnical l Resources l Environmental l Technical l Project Management RAILCORP RFP NOs. 26/035 & 630 Lapstone Cuttings km to km: Risk Assessment of Natural Slopes and Cuttings. Photograph showing cut km to km from east (end of Governors Drive) Rockfall threat-barrier diagram! FIGURE 1 Job no: S22540/01 Koko (Natural News) Koko the Gorilla, celebrated for her 1000-word sign language vocabulary, is known for her affinity toward cats. After she learned how to communicate with her caretakers at the Gorilla Foundation in Northern California, she asked for a kitten to have as a pet. The cat came in handy on one particularly destructive day. When no one was around, Koko managed to rip a sink out of the wall in her habitat. When the humans returned, they asked Koko who ripped out the sink. Koko signed, "The cat did it." _primates_liars_gorilla.html viewed 27feb14

11 R2A s Understanding Exactitude If due diligence has been arguably demonstrated to a common law due diligence standard (the balance of the probabilities test) then being successfully prosecuted under statute law (beyond reasonable doubt test) is most unlikely. That is, that provided something is not prohibitively dangerous, to ensure that all reasonable practicable precautions are in place for all foreseeable, credible, critical issues. It is better to be vaguely right than exactly wrong*. Put another way, do not let probability theory mask your ignorance. You can t be right all the time but you can always be diligent. *Carveth Read (1898). Logic, deductive and inductive. EEA-R2A ENGINEERING DUE DILIGENCE WORKSHOP WORKSHOP AIM A Workshop for Directors and Senior Managers PROUDLY PRESENTED BY WORKSHOP OBJECTIVES DUE DILIGENCE ENGINEERS At the end DATES of the workshop, March participants will be able to Melbourne May Perth July Sydney August R2A Engineers ABN R2A Pty Ltd Level 1 55 Hardware Lane Melbourne VIC 3000 Australia P F E risk@r2a.com.au W