The Law and Engineering

Tim ProcterDue Diligence

R2A / Due Diligence / The Law and Engineering

The notion of engineering due diligence has expanded into Australian society, gradually displacing pure risk management as the ultimate aim of engineering decision-making. Numerous national and state-based laws have moved from mandating risk assessments to imposing specific duties to exercise due diligence, in health and safety, environmental protection and other areas.

However, some standards and other non-mandated guidelines, regardless of legislated and common law precaution-based (SFAIRP) requirements and judgments (the laws of man), still promulgate approaches requiring the ‘scientific’ (ALARP) measurement and comparison of risk. This is presumably done with the view that risk can be examined and dissected as part of the laws of nature. Engineering and legal practitioners find themselves caught between these competing paradigms.

An egalitarian society like Australia desires to ensure fairness amongst its citizens. One outcome of this view is that no one should be inequitably exposed to risk, and certainly not for the benefit of others. Being a free society, an individual can choose to be ‘riskier’, but this should be a matter of personal choice, not economic necessity.

Risk equity can be demonstrated in two key ways. One is a scientific exercise that sets and complies with a maximum level of risk to which any person may be exposed. This requires detailed modelling of potential event sequences and comparison to a predetermined maximum acceptable level of risk.

The second provides a minimum level of precaution (i.e. protection from risk) for all persons exposed to the undesired outcomes. This minimum level is generally demonstrated in recognised good practice, i.e. precautions considered reasonable by virtue of their implementation in similar situations.

Pre-event, both methods conceptually provide for equal risk outcomes. However, post-event, only the minimum precaution equity approach can be tested objectively – either the precaution was in place or it was not. The maximum risk level equity approach is problematic to justify on a number of levels.

The courts, reflecting Australia’s societal desire for fairness, established the precautionary approach in the common law duty of care. Post-event, the courts test whether all reasonable steps were taken to avoid damage to people. This long-established approach considers both precautionary risk equity and financial efficiency in determining what precautions, for any particular event, were reasonable.

Unlike the courts, engineers and lawyers don’t have the benefit of hindsight in determining what is reasonable. Decisions must be made, with business, safety, societal and environmental implications, to address any number of potential events. These often include complex issues with valid but irresolvable competing stakeholder points of view.

Due diligence engineering expands the courts’ ‘equal minimum level of precaution’ principle to a pre-event precaution-based decision-making philosophy incorporating the requirements of both science (the laws of nature) and society (the laws of man). This philosophy allows engineers and lawyers to together cut the Gordian knot that has developed when decision-making at the complex interface of physical and social infrastructure.