Negligence law reaches beyond physical injury to certain words and to certain economic losses. Both are areas of acute exposure for design professionals.
Negligent misrepresentation was established in Hedley Byrne v. Heller (1964): a person who negligently makes a statement may be liable for resulting economic loss where there is a special relationship and reasonable reliance on the statement. Canada applied this directly to engineers in Edgeworth Construction Ltd. v. N.D. Lea & Associates Ltd. (1993 SCC):
Edgeworth v. N.D. Lea call-out: An engineering firm that prepared the design and specifications in tender documents can be liable to a contractor who reasonably relied on that information when bidding, even though the contractor's contract was with the owner, not the engineer. Faulty information in tender documents is an actionable negligent misrepresentation.
Recovery for pure economic loss (financial loss without accompanying physical injury to the plaintiff or its other property) is generally restricted, but Canada recognizes an important exception for dangerous building defects in Winnipeg Condominium Corp. No. 36 v. Bird Construction Co. (1995 SCC):
Winnipeg Condominium call-out: A contractor (and by extension a design professional) can be liable to a subsequent owner for the reasonable cost of repairing a dangerous defect, even with no contract between them, where the defect poses a real and substantial danger. The duty is grounded in safety.
Together these cases mean an engineer's negligent design or representation can attract liability to parties far beyond the immediate client.