Essay System: Engineer a. Engineer

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taNSPE Board of Ethical Review 2/21/01 - Approved Case No. 00-10 Pg. 1

CONTINGENCY FEES – ENGINEER/ATTORNEY HIRING ENGINEERING EXPERT

Case No. 00-10 Facts: Engineer A is both an attorney and an engineer. Engineer A is retained by Client X on a contingency basis to perform legal services in connection with an accident in which Client X alleges that a manufactured product caused the accident. Engineer A interviews a number of experts familiar with the product and the reasons for similar accidents and hires Engineer B, an expert in the product in question. No written agreement is executed between Engineer A and Engineer B for the services in question. Engineer B reviews the facts and circumstances surrounding the accident, conducts and completes study, and issues a report to Engineer A. Engineer A reviews Engineer B’s report and informs Client X that it appears that no basis exists for a lawsuit. Engineer B bills Engineer A for his professional services. Engineer A refuses to pay, indicating that since Engineer A was not paid for his services, Engineer A has no obligation to pay Engineer B. Question: Was it ethical for Engineer A to refuse to pay Engineer B for Engineer B’s services? References:
Preamble Code of Ethics: Engineering is an important and learned profession. As members of this profession, engineers are expected to exhibit the highest standards of honesty and integrity. Engineering has a direct and vital impact on the quality of life for all people. Accordingly, the services provided by engineers require honesty, impartiality, fairness and equity, and must be dedicated to the protection of the public health, safety and welfare. Engineers must perform under a standard of professional behavior which requires adherence to the highest principles of ethical conduct. Avoid deceptive acts. Conduct themselves honorably, responsibly, ethically and lawfully so as to enhance the honor, reputation and usefulness of the profession. Engineers shall not request, propose, or accept a commission on a contingent basis under circumstances in which their judgment may be compromised.

Section I.5. Section I.6.

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Code of Ethics: Code of Ethics:

Section III.6.a.

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Code of Ethics:

Discussion: The facts in this case illustrate a frequently encountered situation often presented within the design and construction industry – payment disputes that occur between clients that ripple into disputes between design and construction industry parties. The Board of Ethical Review has considered ethics cases in the past involving an engineer being retained on a speculative basis. In BER Case No. 77-4, a county agency published an open announcement to consulting engineering firms soliciting
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NSPE Board of Ethical Review 2/21/01 - Approved Case No. 00-10 Pg. 2

expressions of interest in providing services for a water system project. The announcement made it clear that the engagement would be for the purpose of preparing an engineering report to be submitted to a federal agency to seek financial assistance for the proposed project. It was also made clear that the agency did not have any present funds to pay the consultant, that the agency was not committed to carrying through the project to construction, that if the report shows that the project is not feasible either from an engineering or financial standpoint, "…or that there is discerned a majority sentiment against the project for whatever reason, prior to federal funding commitment, then the project preparation will be terminated." The announcement further stated, "The consulting engineer would be retained solely on the basis of speculation that the project may proceed through the construction phase. If the project is stopped at any time…