When I read this thread title, I thought it was going to address something like the #2 engine fell off the wing and the pilot just tells the paxs it's normal. Sometimes a lie is necessary, especially when you're in command of 200-400 lives, all from very different walks of life and possessing ranging levels of aviation expertise. Like when your small child asks if the family dog is going to die after it's been hit by a car--you say "I don't know" or "I hope not" instead of "yeah, he's gonna become glue."

However, that aside...this touches on the old battle between weather and mechanical. I'm not sure how this is regulated nor who decides, but it seems to me the fairest way is third-party intervention - probably the best is FAA/ATC.