The following material is provided for informational purposes only. Before taking any action that could have legal or other important consequences, speak with qualified legal and insurance professionals who can provide guidance that considers your own unique circumstances.
Most architects and engineers, particularly those familiar with risk management and contract review, understand the concept of “standard of care.” Put simply, the standard of care sets the minimum acceptable bar for a design consultant’s level of performance. This standard states that design consultants are expected to perform in a manner consistent with the same degree of care and skill ordinarily exercised by reasonably competent members of the same profession or discipline currently practicing under similar circumstances, during the same time and in the same or a similar locale. Anything less in terms of performance could possibly be considered negligence and subject a design consultant to a professional liability claim or other legal action. This could lead to judgments, fines or other penalties should another party suffer a loss due to the design consultant’s so-called underperformance.
Notice that meeting the standard of care does not require perfection on the part of the design consultant. It only requires that consultants be generally skilled, knowledgeable and careful and that performance be consistent with the level of performance of other similar design firms practicing under similar circumstances.
It is highly recommended that design consultants define this standard of care in its contracts with clients and other parties to a project. It is equally important that design consultants not intentionally or inadvertently raise this standard with any of its words or actions related to their practice or the project. For instance, design consultants must avoid over-reaching or ambiguous self descriptions such as “the best,” “expert,” “most qualified” or “leading edge” in contracts or marketing and other company materials and presentations.
Similarly, design firms must not allow a client to raise the standard of care in its contract language. For example, don’t let a client demand “error-free, non-negligent performance” or “state-of-the-art delivery of all services.” Otherwise, the design consultant could be opening itself up for a professional liability claim for anything less than perfect, error-free, state-of-the-art performance.
Worse yet, there is a good chance that any professional liability claim resulting from breaches of your heightened standard of care will be uninsurable. Insurance companies rarely grant coverage for any increased exposure insureds voluntarily assume. If you would not otherwise be liable for your performance absent your voluntary assumption of liability, the exposure is likely not going to be covered.
It’s A Moving Target
It sounds so simple:
- Make sure your quality and scope of services at least matches the industry standard of care.
- Make sure your contracts define the prevailing standard of care to which you will be held.
- Avoid far-reaching and over-stated language from you or your client that could raise your responsibilities above the prevailing standard and result in heightened and uninsured liabilities.
Indeed it would be simple if the standard of care was not a constantly moving target. As the old adage goes, the only constant is change. The prevailing standard of care today is much different than it was 10 years ago and it will be much more different 10 years into the future.
A lot has changed and is changing in the design consulting profession these days. What was considered innovative only a few years ago is now considered standard practice for design and construction. Meanwhile new procedures, products and materials continue to enter the marketplace yearly. Standards of care related to these new practices have yet to be established. It is important that design firms not be held liable for losses or damages resulting from the implementation of untested products, materials and systems selected at the demand of the client.
Here are four of the major factors impacting changes in the standard of care for design consultants today and tomorrow.
Perhaps nothing presents a greater impact on your ability, or inability, to meet the prevailing standard of care as advancements in technology. At first, when a new design technology emerges, there is no proven history of success to create a universal standard of care. But, it doesn’t take long for a significant advancement in computer-aided design to spread throughout the industry and create the standard for modern project design. This potentially leaves some slow-to-respond consultants delivering services that clients may consider outdated, resulting in an inadequate project and an unhappy project owner.
It’s not unusual for some of today’s clients to demand that their design firms use a certain new and largely untested design and project management program. Adopting this software may require extensive investments in programs, hardware and training.
Technological advancements not only impact the selection of the hardware and software used to create the design and manage the project, but it dictates how design services are delivered. For instance, the client, the contractor, the design consultant and all subcontractors and subconsultants increasingly rely upon online information sharing via secure networks and clouds. When was the last time you and your clients passed CD-ROM discs back and forth to share the project designs?
Now, think about all of the changes that have occurred in client/design consultant communications in the recent past. Remember when email and instant messaging were considered new age? Today, online communication tools such as Zoom and social networking platforms like Twitter, Instagram and Facebook are completely changing communications and giving rise to virtual practices.
The ability to use these and other communication tools as part of your project delivery system is becoming an industry requirement. The failure to adapt and meet these new standards of practice management can lead to miscommunications and missed communications that can result in unmet client expectations and project errors. What may be intended as an informal suggestion on instant messaging or during a Zoom meeting can be interpreted as a formal request for a project change.
How do you bridge the technology gap and keep your business up to prevailing standards? Keep abreast of new technologies through research. Hire employees who demonstrate knowledge of and experience with the burgeoning technologies. Invest in the hardware and software that your clients and prospects are demanding. Conduct formal training programs for relevant staff.
There is substantial debate going on regarding the impact of climate change and how much the design industry can and should change their design standards in response. Evidence suggests that across the globe, severe weather events are increasing in both frequently and severity. Hurricanes, floods, droughts, winter storms, and forest and brush fires have ravaged populated areas and caused property damage, injuries and deaths. What were once considered 100-year weather events are now recurring multiple times in the same decade.
Climate change is having its own impact on a design consultant’s standard of care. Architects and engineers need to be aware of the severe weather events occurring in the areas where clients require their design services. Are there trends showing an increase in the severity of weather events? Do these trends warrant a response on your part so that your projects can withstand these more severe weather events?
Designers who work in small towns in California’s forests and foothills, for example, now need to create design changes with fire prevention and suppression in mind. Fire-resistant building materials and exterior designs, sprinkler systems, fire breaks, landscaping, gas and water supplies, faucet/hydrant locations, drainage and debris-flow mitigation: these design elements all require heightened emphasis in today’s fire prone areas.
At a minimum, you need to meet the ever-more-stringent building codes now being applied in severe-weather-prone areas. To meet prevailing and escalating standards of care, you may need to go beyond the minimum and increasingly incorporate climate change and its potential effects into your designs.
Client, governmental and community demands for sustainable design and energy efficiency are clearly on the rise. Design consultants serving this “green” sector of design and construction are required to create building envelopes, HVAC systems and interior designs that require less energy to heat, cool and make habitable year round.
Client requests for sustainable design and LEED certification are raising the standard of care for design consultants who take on these challenges. This is especially true for those design consultants who market themselves as environmentally responsible or go as far as obtaining LEED credentials. Professional societies are also raising standards of performance by establishing principles and codes of ethics for green design and sustainable development.
With sustainable design, some clients are requesting or even requiring that more building components be made from recycled and nontoxic materials. Rainwater harvesting is moving from a novelty feature to a required component of water-saving landscaping. Smart buildings are designed and programmed to be ultra energy efficient. The standards of care for sustainability are growing higher day by day.
Health and Safety
The ongoing COVID-19 pandemic is a prime example of the types of health and safety issues that can impact the design industry’s standard of care. In particular, we can expect that ventilation will become a more critical design element in the future. Maximum occupant capacity and density may also become a more important design element.
In the wake of COVID-19, the prevalence of virtual organizations, where a substantial number of employees continue to work at home or other off-site locations, may become a permanent part of the business landscape. This will require a rethinking of how workflows and communication systems can best be accommodated by innovative office design.
Documentation is the Key
Whether its adopting new technology, addressing climate change, reaching for new energy efficiencies, dealing with new health and safety issues, or confronting any other additional challenges facing your project, documentation can aid you in avoiding having your standard of care raised above a reasonable level. Being thrust into a situation where you are responsible for achieving the highest standards imaginable while challenging new frontiers in design is an untenable position for any consultant. Making sure your decision-making process is documented can provide added protection.
When we say “documentation,” we are thinking beyond the primary designer/client contract. You may need to spell out these standard of care issues in separate addendums that are reference in the main contract. Consider documenting these issues when clients are demanding the latest and greatest in project management and design:
- List the new, innovative, untested or unproven products, materials, systems and processes being used on the project.
- Identify who recommended or demanded the use of the new, innovative, untested or unproven products, materials and systems.
- List the client’s goals and objectives for demanding or agreeing to the use of new, innovative, untested or unproven products, materials, systems and processes.
- Specify the responsibilities, authorities and obligations of each party who has a primary role in designing and executing these new, innovative, untested or unproven products, materials and systems.
- Acknowledge the risks of using new, innovative, untested or unproven products, materials and systems, including the failure to perform or achieve objectives, and estimated extra expenses and losses incurred to correct potential problems.
- Acknowledge that the client accepts the risk of recommending or requiring new, innovative, untested or unproven products, materials or systems used in the project.
- Acknowledge that using new, untested or unproven materials and systems may exceed the design consultant’s prevailing standard of care.
Clients have every right to expect their design consultants to perform to the prevailing standard of care. They do not, however, have the right to place unrealistic expectations on their design firms and hold them liable for not meeting unrealistic or nonexistent standards.
Can We Be of Assistance?
We may be able to help you by providing referrals to consultants, and by providing guidance relative to insurance issues, and even to certain preventives, including the development and application of sound human resources management policies and procedures.
Please call on us for assistance.
We’re a member of the Professional Liability Agents Network (PLAN).
WE’RE HERE TO HELP!
Contact us at 800-969-4041 or click here to request a confidential evaluation of your insurance policies and risk management needs.