Construction & Design Risk Library

The Construction & Design Risk Library (formerly A&E Library) contains articles and litigation case notes on a number of topics providing risk management insights for design professionals.  Topics currently include (1) Limitation of Liability, (2) Certificate of Merit, (3) Time Limitations of Filing Suit, (4) Indemnification, (5) Economic Loss Doctrine,  and (6) Discovery of Electronic Documents. It is hoped that these articles, in conjunction with workshops and webinars offered by Zurich will serve as a valuable risk management resource.

About the Author: 

Mr. Holland is president of the construction risk management consulting firm of ConstructionRisk, LLC.  He and his team provide risk management services (including contract reviews) for Zurich Construction and insureds of Zurich Construction.   He is a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C (1986 – 2007), and now with ConstructionRisk Counsel, PLLC) representing design professionals, contractors and project owners.  The articles in this library were written by Mr. Holland unless otherwise indicated.  They originally appeared in issues of the ConstructionRisk.com Report, available at ConstructionRisk.com.

Topics:

Limitation of Liability (LoL): Examples of court decisions enforcing and rejecting LoL clauses and lessons to apply in drafting clauses so that they have a greater likelihood of being enforced on motions for summary judgment.

• Limitation of Liability Clause Enforced
• Limitation of Liability Clause Enforced in Arizona is Matter for Summary Judgment
• Limitation of Liability Clause Enforced in Favor of Architect by Georgia Court
• Limitation of Liability Clause Unenforceable to Protect Individual Professional in Florida
• Limitation of Liability Clause Enforced in North Carolina Case

Certificate of Merit: When suits are filed against architects and engineers some states require that an affidavit or certificate of merit be filed with the complaint stating that in the opinion of a licensed professional the defendant was negligent, and the basis for that opinion.

• Inadequate Certificate of Merit Results in Dismissal of Negligence Count in Complaint Against Architect

Time Limitations on Filing Suits: Using statutes of limitations and statutes of repose are important legal tools to have cases dismissed that have been filed later than the statutory deadlines. The articles below provide examples of cases addressing these statutes, and also describe contractually created time limits that are enforceable by courts.

• Time Limit for Filing Suit Shortened by Contract Condition
• Statute of Repose Enforced to Bar Claim Against Engineer

Indemnification: Perhaps the most problematic clause in a contract by virtue of creating uninsurable risks for design firms is an indemnification clause requiring the designer to defend its client, and clauses requiring the designer to indemnify its client for damages arising out of acts and errors that are not negligent. Articles in this section discuss the impact of indemnification clauses and explain why design firms should not agree to defend their clients.

• Duty to Defend and Indemnify
• Professional Services Providers Shouldn't Agree to Defend Clients
• The Duty to Defend as Part of Indemnity Agreement is Alive and Well in California
• Agreeing to Pay Reasonable Attorneys Fees as Part of Indemnification May Create Uninsurable Loss
• Indemnification Clause Required Design Professional to Defend City Against Claims City was Negligent

Economic Loss Doctrine: A frequently misunderstood defense available to design firms is the economic loss doctrine that in many states prohibits a party, such as a contractor who is not in privity of contract with the designer, from suing a designer for purely economic losses where there are no bodily injuries or actual property damages.

• Arizona Supreme Court Reaffirms Economic Loss Doctrine

Discovery: Electronic discovery is becoming a burden and a problem in some cases. Articles in this section discuss some of the issues concerning electronic discovery as well as destruction of evidence subject to discovery.

• Electronic Discovery Requires Cooperation between Opposing Counsel

Disclaimer: The opinions expressed herein are solely those of the author and are not to be attributed in any way to Zurich or any entity or client with whom the author may be associated. The ideas and commentary expressed herein are for general risk management education purposes only and are not written with the idea of being applied to any specific situation or facts. Likewise, the commentary is not intended to provide a legal opinion or legal advice. Legal counsel familiar with the law of the state that will be applied to a given contract should be consulted to assist in drafting contract language appropriate to the circumstances and the state law.