Due diligence widely misunderstood in safety community

It does not mean simply gathering large amounts of records

Due diligence widely misunderstood in safety community
Art Babych / Shutterstock.com
Dave Rebbitt

Due diligence is a phrase that gets bandied about in the world of health and safety as if safety people invented it.

The truth is it’s one of the most misused phrases and misunderstood concepts in the Canadian safety community. It is an excuse for the bureaucratization we see in modern safety because it is consistently misinterpreted.

In 1978 the Supreme Court of Canada rendered a decision recognizing the strict liability offense and the defense of due diligence. Many safety people think this has something to do with safety. That, of course, is not true.

The Supreme Court decision (R v Sault Ste Marie, 1978), deals with a case involving a contractor managing a landfill for the city of Sault Ste. Marie, Ont. The case concerned the pollution of a waterway by the contractor.

The contractor discharged to a substance into a waterway, and the city was also charged, along with the contractor, as the legislation at the time made it an offense to “discharge, or cause to be discharged, or permit to be discharged” materials into the creek and river. Interestingly the city was also charged under the criminal code, but those convictions were subsequently quashed upon appeal.

It was not a safety case

In November 1970, the city retained a company to manage the disposal of all garbage from the city. The landfill site selected bordered on a creek which ran into a river. This was a sanitary landfill where the garbage is compacted layers and covered each day with actual sand or gravel.

Before becoming a landfill, the site had some freshwater springs that flowed into the creek, which emptied into the river. The contractor covered the site with material and then placed the garbage and waste over the top. Over the course of time, the garbage formed a mound that sloped steeply towards the creek. Pollution of the creek resulted.

Both the contractor and the city were initially convicted of offenses. However, through subsequent appeals, the city was given leave to appeal to the Supreme Court of Canada.

The Supreme Court of Canada rendered its decision in 1978. Here it drew a clear distinction between the criminal offense and the requirements of the Crown to establish the mental element, mens rea, or guilty mind. This term means that the accused committed the prohibited act intentionally, or recklessly, with knowledge of the facts constituting the offense, or willful blindness towards them.

Due diligence was already established

The court also discussed the “absolute liability” offense, where the Crown simply has to show that a prohibited act was committed.

Also addressed was what the court termed “public welfare offenses” which is part of the English common law. There was a bit of crossover between the absolute liability offense and the public welfare offense. An example given by the court was the Alberta Highway Traffic Act which provided that a judge could find a violator not guilty if the offense was “committed only by accident or misadventure and without negligence and could not by the exercise of reasonable care of precaution have been avoided.”

The strict liability offense and due diligence had been adopted in other countries such as Australia in the 1960s. Several earlier cases of Ontario had brought forth this concept of a strict liability offense and the defense of due diligence. Courts had accepted the concept of reasonable care in other cases in Ontario, British Columbia, and Saskatchewan. There was even a case in New Brunswick, as early as 1923, regarding failing to properly fit goggles contrary to the Industrial Safety Act that was deemed strict liability.

In 1976 the Law Reform Commission, formed by the Minister of Justice endorsed a working paper, The Meaning of Guilt – Strict Liability. It endorsed that negligence should be the minimum standard of liability for regulatory offenses.

In the late 1970s, the time was ripe to formally recognize this strict liability offense that had arisen from the English common law “public welfare offense.” There was a real need for a “halfway house,” as the court put it between the mens rea and absolute liability.

In the initial trial and at the Ontario Court of Appeal, Sault Ste. Marie did not present evidence to plead due diligence, nor did the judge address himself to the availability of such a defense. A new trial was ordered by the Ontario Court of Appeal with leave to appeal to the Supreme Court. The Supreme Court of Canada agreed and directed a new trial.

Due diligence?

In rendering its decision, the Supreme Court of Canada defined the scope of the due diligence defense. It was made clear that the burden of proof would shift from the prosecution to the defendant, and that it was up to the defendant to demonstrate that they had been duly diligent.

The question then became: What is due diligence? This had already been clearly established within the several court cases and was reinforced by the Supreme Court of Canada with some key statements:

•“offences of "strict liability" in which mens rea need not be established but where the defence of reasonable belief in a mistaken set of facts or the defence of reasonable care is available” (R v Sault Ste Marie, 1978, p. 1300)

•“The due diligence which must be established is that of the accused alone. Where an employer is charged in respect of an act committed by an employee acting in the course of employment, the question will be whether the act took place without the accused's direction or approval, thus negating wilful involvement of the accused, and whether the accused exercised all reasonable care by establishing a proper system to prevent commission of the offence and by taking reasonable steps to ensure the effective operation of the system.” (R v Sault Ste Marie, 1978, p. 1331).

Due diligence and safety

I started off saying that due diligence was misunderstood by many people in the safety field. One only needs to look at rooms full of boxes filled with “due diligence records.”

Most ignore the part of the definition that talks about the reasonable belief in a mistaken set of facts. This means that someone who is an expert has provided some advice or direction that a reasonable person would understand and believe. The problem is that, in safety, it is unclear who is an expert and upon whose advice you can rely.

The final arbiter of who is an expert is usually established in court through a process called voir dire. This would allow prosecutors or lawyers to challenge the credibility of any witness brought forward as an expert.

Is important to realize that the courts are the only real judge of due diligence. No person outside of a courtroom can really guarantee that the company is duly diligent. This leads us to a key statement. A company must have a system in place to prevent the commission of an offense and take reasonable steps to ensure that system is operating.

Some think this means gathering large amounts of records to demonstrate that the system is operating. The records gathered are often less than convincing in showing an operating system. For example, many companies rely on employee-driven hazard assessments to identify and control hazards. One has only to read these hazard assessments to realize that not all the hazards have been identified, and the only real understanding of controls is that the employee may wear their personal protective equipment or not.

That seems rather damning, particularly when one recognizes that the law in Canada places the onus on the employer to conduct hazard assessments and identify controls. Pushing this responsibility onto employees does not alleviate the employer of their legal responsibility. Collecting all these poorly filled out forms demonstrates that there is a system for having people fill out forms and collect them, but not an effective system for identifying can controlling hazards.

The collection of documents seems ignorant of the fact that demonstrating a system means that someone might speak to employees to determine if the system is operating effectively. Monthly inspection forms that show no problems consistently tell the employer nothing. They certainly don’t demonstrate a working system to prevent the commission of an offense (employees injured by an undetected hazard).

Due diligence is actually meant to be activity-based. That means ensuring that your system is operating, not that records are being kept of questionable activities.

Boxes of documents may give us comfort. They can also be proof that the company has not exercised, or is not exercising, reasonable care.

We ignore risk in favour of hazard as this is the term that appears in legislation. Having a system, and ensuring its operating, does increase safety and does prevent incidents.

Due diligence is about ensuring that you have an active system that is being effective, not about filling boxes with paper. Due diligence is not about trying to prove you have it, but actually acting and working with reasonable care.