As an architect in California, you have a duty to practice due diligence in ensuring your plans are free of design defects. Failure to do so opens an architect up for a liability lawsuit if a patent defect is discovered within 4 years, or if a latent defect is documented within 10 years after the substantial completion of the project or improvement.
An experienced construction and liability law firm is your best resource in ensuring your business and reputation are protected. Having a specialized construction attorney review design contracts mitigates risk in agreements and protects your interests.
Protecting Your Business from Liability Claims
The American Institute of Architects provides resources and form contracts that provide basic level protection from liability, but the experience of a construction and liability attorney hones those contracts for your benefit.
At a minimum, your design contracts should absolve you of liability if the construction costs of the project exceed your architectural estimate, and detail the “proportionate percentage of fault” your services would incur if any defects were found and the project owners sued.
Legislation that Protects You
Before 2017, architects and other design professionals could be financially liable for the legal fees and defense costs incurred by project owners who were sued by third parties. This liability was enforced through “duty to defend” clauses in their contracts.
These duty-to-defend clauses were enforceable even if there was no evidence of wrongdoing on the part of the architect or design firm. This was illustrated in the 2010 California Court of Appeals case, UDC-Universal Development v. CH2M Hill, where CH2M Hill, the engineering firm, was liable for hundreds of thousands of dollars in legal and defense costs incurred by their developer client, despite being found innocent of wrongdoing by a jury.
Thankfully for design professionals, Senate Bill 496 was passed and enacted as a revision to California Civil Code section 2782.8 following the CH2M Hill case, which limits their financial responsibility.
Under the current laws, the contractual duty to defend on the part of the design professionals is limited to their proportionate percentage of fault. This means that the architects and engineers can only be found financially liable for the percentage of damages caused by their errors, omissions, or negligence.
What This Means for You
These legislative changes protect your business’s assets and your reputation from undue harm or financial loss due to faults not caused by you or your design.
However, this Senate bill does not cover the issue of advance duty to defend demands, so it is important to engage the services of an attorney experienced in construction law and contract negotiation. While the law does supersede any contractual obligations regarding the duty to defend, the best defense is a good offense, so an up-front clause in the contract stating that you as the architect have no obligation, financial or otherwise, in defending a project owner or developer client.
“After the fact” defense obligations are good contractual clauses to add, specifying that your business’s duty to pay for any costs related to your proportionate percentage of fault takes effect only after a final determination of responsibility has been made by a non-invested party, such as a jury.
As with everything related to legislature and liability for your design firm, consulting an experienced, practicing construction and liability law firm is the best course of action. It will save you time, stress, and legal culpability down the road, and is time well spent.