Can Professional Associations Be Held Liable in Negligence?
Professions, such as law, accounting and engineering, are self-regulated to some extent by professional associations, which govern and discipline their members and protect the public. In consideration of these responsibilities, it is interesting to ask if a professional association could be held liable for failing to discipline one of its members or for failing to warn the public about the conduct of one of its members.
Few legal authorities in Canada have considered the liability of a professional association to individuals who suffer a loss, economic or otherwise, from a member’s negligence. This seems to suggest that, under existing law, individuals would have a difficult time establishing liability against a professional association for failing to discipline or warn about a member. However, the Supreme Court of Canada has endorsed the position that “the categories of negligence are never closed.” They have broadened the categories and, with them, broadened when a duty of care may be owed and to whom.
The rationale underlying the establishment of self-governing professions is the protection of the public. It is this rationale, coupled with a professional association’s enabling statute, that could engender a private law duty of care being owed by an association.
Most professional associations, under their enabling statute, have the power to license and discipline their members. This power, often joined with an ethical code of conduct, defines a “self-governing” profession.
The public is protected by ensuring that only qualified, competent individuals are permitted to practise and that those individuals conform to standards of professional conduct established by rules and bylaws.
Any claim against a professional association for failing to discipline a member or failing to warn about the negligence of a member would be framed in negligence. If the enabling statute imposes a positive duty on the association to investigate or discipline its members, then arguably that association could owe a private law duty of care to a person in the public who has used the member’s services. As for any claim in negligence, the person making the claim would have to establish a sufficiently close relationship between the association and himself or herself, such that it was reasonably foreseeable that a careless act or omission by the association could result in damages being suffered by that person. Further, one must weigh any policy reasons or considerations that would limit the scope of the duty and the class of persons to whom it is owed or the damages to which a breach of it may give rise.
It is arguable, in certain circumstances, that an association is akin to a public authority. As such, there are public policy reasons to negate or limit its duty of care because of the potentially indeterminate number of
As well, the association’s disciplinary powers may well be deemed quasi-judicial and therefore exempt from any liability. The enabling statute may include clauses protecting the association from actions brought against it as long as it acts in good faith. The wording of the enabling statute is of critical importance.
It is likely that an association, like any individual or public body, is also subject to a standard of reasonableness. Failing to act at all may be unreasonable. Failing to initiate a review or to discipline a member when the association knows, or ought to know, of his or her negligence or misconduct may also be unreasonable. The facts of each case will obviously affect the reasonableness of the alleged act or omission of the professional association.
Notwithstanding policy defenses, the potential for liability exists in the current negligence climate.
Accordingly, it is in an association’s best interests to ensure that its statutory obligations are clearly identified and adhered to in carrying out its role as a self-governing body.
For more information on this topic, please consult Bob Hodgins. (Frida Tromans assisted in writing this article.)