Avoid confusion with your client (and with potential fact finders) by defining your role on the project from the very outset.
As design firms see their roles expand with the growth of alternative project delivery, it’s more important than ever for them to be referred to in their contracts as professionals, consultants, architects, engineers – or almost anything other than a contractor or a subcontractor.
After observing dozens of trials involving design firms over more than three decades and interviewing jurors, it has become abundantly clear that ambiguous descriptions of a professional cause confusion. More significantly, they can lead a fact finder, particularly a jury, to attribute responsibilities to design professionals that the contracts don’t call for – or even imply – are their responsibility.
By definition, a contractor is a company that undertakes a contract to provide materials and labor to do a job. Contractors perform work and they provide warranties.
On the other hand, design professionals provide services to design a project for an owner, or sometimes for a contractor. They provide professional services in accordance with the professional standard of care specific to their profession – be it an architect, an engineer, a surveyor, or some other type of technical consultant. They should not be required to provide warranties, which are excluded by their professional liability coverage. In effect, they do not do work, as a contractor does.
Effective communication provides clarity. It’s widely known that a steady flow of communication among all project participants is key to have the project run smoothly. For design firms, however, communicating effectively needs to start with properly defining the roles of all the individuals involved in the project – and that originates with proper identification in the contracts.
If the owner, or the design-build contractor think of you as a contractor or a subcontractor, you start the project at an immediate disadvantage. To some, it may seem like semantics – and it may seem difficult to insist on changing the terminology throughout the contract – but communication with respect to roles and responsibilities is critical.
Perhaps, the best way to illustrate this is by providing an example. Many years ago, a lawsuit went to trial involving a developer and a civil engineering firm. It occurred long enough ago that there were 12 jurors who served on a civil trial. This case was a delay and extra matter; the owner had paid the contractor significant funds which the contract alleged were the result of the engineer’s alternate paving detail. The owner now sought to recover those payments made to the contractor from the engineer, as well as claiming additional damages, which were in excess of $1 million dollars.
The action ended in a mistrial (not a common occurrence in a construction case). Upon speaking with jurors following the trial, we learned the jury had hung 11-1 against our designer. The holdout in this situation turned out to be a schoolteacher, who may have been the one lone juror who listened carefully to the evidence and understood the contracts and the roles on the project. Yet, another juror we spoke with had no clear explanation for his line of thinking and said, “We just thought that your client could have paved earlier.”
Of course, the design client had no construction responsibilities – and no ability to pave – but the jury was confused and clearly didn’t understand the roles and responsibilities on the project.
So, a lesson learned that’s worth putting into practice: Always start off on the right foot. Avoid confusion with your client (and with potential fact finders) by defining your role on the project from the very outset.
Lauren Martin is a risk manager and claims specialist at Ames & Gough. She can be reached at lmartin@amesgough.com.