A month ago my insurance carrier sent me e-mail about a free seminar they were planning on various professional liability topics. Frankly I do not usually enjoy to sit in this kind of presentation and listen to horror (and sad) stories about architects and engineers taken to courts for all kinds of reasons: from construction delays, over-budget projects to leaking windows.
Several years back I attended one and came out regretting my choice of profession. All we were told that we were in risky profession and vulnerable to legal issues. Given that we make relatively little in this business, the risk seems to far outweigh the reward.
This time I decided to attend partly because my carrier promised some sort of reduction in the premium if I would go.
After one hour bus ride to downtown Seattle on usual rainy morning I made it to the seminar on time; the traffic was not bad. The seminar turned out to be a good one, at least from my perspective. We had about four to five different sessions covering topics such as current trends in legal issues for A/E firms (I know this sounds bad!), managing clients' expectations, new issues that come with the increasing popularity of LEED, etc.
At the last session a local Seattle construction litigation lawyer spoke about alternative dispute resolutions. Then he made a very strong case about something that was repeatedly echoed throughout the seminar: to have good written contract on every project that limits our exposure to legal problems by introducing additional contract provisions such as limit of liability, statute of limitations and standard of care provision. There may be some others. And do not forget to have it signed by the client! (Notice to proceed by e-mail may not be enough). You may say these provisions would cause annoyance and put your clients in an odd situation. It might. However, these should also help educate our clients about what to expect from us and our insurance coverages. It is better to be upfront now than battling a combative client later!
We know lawsuits can always happen. They often go after those who can pay for the damages rather than those who did something wrong. In some cases, we are not able to avoid them and many factors are beyond our control. We can however reduce our liabilities. I heard that only a few A/E firms can survive from a major litigation because it is very expensive to defend. I would agree with that.
Our best defense at the end of the day may rest on the questions: "Do you have a signed contract?" and "What are the terms in your contract?"
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