Not trying to start an argument … why do you think it has worked well for 11 yrs? Do you go strictly by the book? How do you handle issues like this one (this discussion about narrow alley, or possibly noncompliant exits)?
There are two basic concepts that go into effective liability mitigation for building officials in Canada based on settled law:
1. You do not get to enforce your interpretation of the code. While we are all experts, proper interpretation of the code is the least restrictive, reasonable interpretation. Building regulations encroach upon rights guaranteed under our charter (and I believe your constitution). Because some infringement is reasonable in the operation of an orderly society, the law (adopted code is considered a law) generally can accept infringements written into laws shown to be for the public good. However, because these laws infringe an guaranteed freedoms, judges will interpret them to be the lease amount of infringement possible, while being reasonable in their interpretation. There is naturally an exception to this which many of us have likely encountered, there might be a less restrictive interpretation, but it is not reasonable because it lacks consistency with the remainder of the code, or would outright create conflicts with other provisions. This is why the "reasonable" measure is so important. It falls to us to be certain that we can prove that our interpretations are "reasonable" as building officials.
2. Just because a violation exists, does not mean it needs remedied. When a violation is encountered in the course of construction, the violation must be reviewed to understand the potential impact it could have on the building users, the building itself, and any other interest groups using a three part analysis. We need to review the gravity of harm (how bad could someone get hurt), the likelihood of harm (how likely someone would get hurt), and the cost of repair (self-explanatory). Based on this outcome, some violations would not make sense to correct, and instead become learning opportunities for contractors. And I do hope they learn, because next time they are fixing it regardless.
The final thing we do, which is a significant deviation from what is standard liability mitigation practice is to admit when we make a mistake. We work with the damaged party to find solutions to the issue and to fix the process to reduce the chances of it happening again. In speaking with a friend of mine who literally makes her living suing various levels of government here, this is the most effective liability mitigation practice for governments. Judges are not very inclined to find against government entities that when presented with a problem that they exacerbated actually engage in helping to find a solution to the problem. The alternative rewards stonewalling and causing the owners to suffer further damages, which they wish to de-incentivize.
It's not that we haven't made mistakes, it's that when we do, I sit down with them in their home at their kitchen table. I listen to their side and how it affected them. I empathize with them, I tell them how sorry I am that this happened to them, and we work together to develop a solution. I've had to do this twice in my career. Both times it was awful to see how the mistakes we made really affected the owners. Both times we were successful in ensuring we helped get the issues straightened out.
More to your question, how do we handle issues like this, existing buildings are hard. Contractors know it. RDPs know it. Building officials know it. Sometimes the best you can do is the best you can do. We have a system in Canada where designers can propose an alternative to the code that meets the same level of performance. In situations like this, we would be looking at timed egress studies for the width reduction. We would also be looking at ensuring queuing at this exit is reduced to minimize any crowd crush created. Existing buildings are frequent users of this system. From a liability perspective, the designer retains liability. The building official is only responsible to ensure the designer follows the proper process for the alternative solution (which includes demonstrating their professional capacity to perform the evaluation) and the designers responsibility is for if the design actually works. If I start deciding what an exit is and what is not, I am not regulating, I am engaged in designing and have significantly more liability.
