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Case Summary: Liability of Regulators for Negligence

Salehi v. Association of Professional Engineers of Ontario, 2015 ONSC 7271 (CanLII) (Ont Sup Ct), claim of regulatory negligence during registration struck on basis of no private law duty of care.

Mr. Salehi, a foreign educated engineer, sued the Association of Professional Engineers of Ontario (“PEO”) for “financial and emotional damages” resulting from PEO’s alleged negligence in processing and approving his application for a professional engineering license. Mr. Salehi applied for registration in 2006 and, after a number of processes, his application was approved on June 14, 2013. Mr. Salehi was dissatisfied with the decisions made during the application process and claimed the PEO was negligent in processing and approving his application.

The first element of a claim in negligence is a duty of care owed by the defendant to the plaintiff. A duty of care exists when there is proximity, meaning a “close and direct relationship” between the plaintiff and defendant, and “reasonably foreseeable harm.” In the absence of these factors, PEO had no legal duty of care to Mr. Salehi.

The Court held that regulators did not owe a duty of care to members of the regulatory body or to specific private individuals receiving services from regulated members but rather to the public as a whole. Mr. Salehi argued that a registration applicant was in a different position compared to the members or individuals receiving services and that since Ontario legislation required all registration practices to be “transparent, objective, impartial and fair,” a failure to meet these requirements was negligence.

The Court agreed that PEO’s registration practices had to be “transparent, objective, impartial and fair.” However, the Court concluded that Ontario legislation also provided various internal and external appeal routes to address dissatisfaction in the licensing process and found that, while the PEO had many public duties, it did not owe a private duty of care to Mr. Salehi. Accordingly, the claim in negligence was dismissed.

The Court also found that PEO’s “good faith” statutory immunity from civil action applied. Bad faith is very difficult to establish as it requires an intention by the regulator to mislead or deceive, or a decision to refuse to fulfill a duty that is motivated by ill­ will. There was no bad faith in this case.

Comment: While Alberta regulators operate under a different statutory regime, their primary duty remains to serve and protect the public interest. Serving and protecting the public interest includes being transparent, objective, impartial and fair, but also includes ensuring registration applicants are qualified to become members of the profession. As regulators are responsible for the regulation of their members and protection of the public as a whole, there is no “proximity” between a regulator and its members, registration applicants, or members of the public sufficient to create a private law duty of care.