How your disgruntled client can turn into your very own car crash! (and how to avoid it) (law tips)

Over the summer, I was involved in a car crash.  It was *not* my fault– heck, I wasn’t even driving but riding shotgun.  But it wasn’t my husband’s fault either.  A guy pulling out of a parking lot was watching the traffic coming up the road, but failed to see our car sitting in the same intersection waiting to turn into the same parking lot.  He ran right into us.  Here was the damage:

car damage

 

It may not look like much, but the panels were so damaged it cost almost $9k in damages, over a month of car rental fees, and a LOT of aggravation on our part.  The guy who hit us was very nice, apologized, and was concerned if we were injured.  His insurance company ultimately paid for all of the damage.  However– it wasn’t he who suddenly got a new part time job– that was me.  I had to spend lots of time with police, insurance representatives, auto body mechanics, rental car places, you name it.  If you’ve ever been in an accident, you know the headache involved.  In fact, I have had 2 other accidents over the years (again, neither of which were my fault– I think I’m just a beacon for bad drivers?).  One of those accidents was a 4 car accident– a driver hit my car, pushing it into the car ahead, which went into the car ahead of that.  In that accident, my car was actually totaled.  Fun times!

How is this relevant to your life as an architect or engineer?  If you stay in the game (that is, the design field) long enough, chances are, you will, at some point, end up dealing with disgruntled clients.  One of those clients may even file a lawsuit against you.  Or, for that matter, you may end up getting sued by another party involved in your construction projects– one that you don’t even have a contract with.

If that happens, you too will have a new part-time job– working on your defense.  Think meetings with your attorneys, calls with your insurance adjuster, unbilled time sitting for deposition, searches through all of your project emails and files, and the potential for a long jury trial (again, unbillable time for you).  Sounds fun, doesn’t it?  Maybe even makes you want to scream with the unfairness of it all.

The thing is, while there are certain things you can do to minimize your risks of being sued and your chances of prevailing if you are sued, even if you win, you’ve lost in time and opportunities.  In a fair system, you wouldn’t face this for unfair or frivolous claims.  In a fair system, I wouldn’t have to spend hours dealing with the fall out of an accident I didn’t cause.  But sometimes, stuff happens.

Just like there are ways of minimizing your risk of car accidents (turn signals, watching for inattentive drivers) and reducing damage when they occur (using seat belts, driving slower), there are also ways to minimize your risk of a lawsuit and reducing your damage when they do occur.

Some ideas:

  1. Have a written contract for every project, every time
  2. Get that contract reviewed by your insurance carrier and lawyer
  3. Be sure to specify what you will, and will not be doing in your scope of work  (being redundant is good here!)
  4. Establish clear payment terms, and expectations about fees for additional services, up front.
  5. Have good document management systems in place, which you’ll need for if/when litigation does occur
  6. Be aware of warning signs that there may be a lawsuit in your future; and
  7. If you do get sued, don’t panic, but take some steps to help your case get off on the right foot

But remember, when all is said and done:  you place your bets and roll the wheel.  Sometimes, your number comes up.  While these tips cannot prevent being sued by a disgruntled client, they can lessen the risk and impact.  And that is *almost* as good as getting your car fixed, returning the rental to the shop, and quitting your new part time job!

Have you had to suffer through an unfair lawsuit from a disgruntled client or third party?  Tips you wish you had known earlier?  Concerns about your own contracts?  Share in the comments below or drop me an email at mbrumback@rl-law.com.

Photo: Creative Commons License

Design Professionals’ Stamping & Sealing Obligations (50 state survey) (law note)

Stamping Ground KYDo you sometimes wonder if you are meeting your stamping & sealing obligations in each state where you practice engineering or architecture?

Ever find yourself with some questions about how another jurisdiction handles design professional issues?

Wish you could find these answers in a reliable resource and know that it was solid information?

The lawyers have your back!  Check out the first ever 50‐State Survey of Licensed Design Professionals’ Stamping and Sealing Obligations (pdf; large document; give it some time to load)  by the American Bar Association Forum on Construction Law.

The survey is alphabetical, but for easy reference, here are some page numbers for the Southeastern States* to get you started:

  • North Carolina          starting at page 124
  • South Carolina          starting at page 154
  • Georgia                      starting at page 36
  • Florida                        starting at page 30
  • Virginia                       starting at page 176

Download or save this link, and the next time you have a quick question about the various licensing boards, regulations, rules, and procedures,  you can save yourself some time.

* FYI, my law firm has licensed attorneys in each of these Southeastern States, in case you should have further questions.

And, as always, drop me a line with any of your pesky construction law related questions, comments, complaints, etc.

Photo: (c) Coal town guy at English Wikipedia via CC

Do I really need my own lawyer if the insurer is giving me one? (law note; tip)

Several readers have reached out to me about my post on getting a Reservation of Rights letter with comments and questions.  The most common refrain has been something along the lines of: “Do I really have to hire my own lawyer after paying insurance premiums just because I got one of those pesky ROR letters?”

not break bankThe short answer is that you do not *have* to hire your own lawyer.  But, it can be very useful.  And, it can be done economically so you don’t have to break the piggy bank.  You see, if you hire your own lawyer, they can be “back up” and simply monitor the lawsuit, while the insurance-retained lawyer does the yeoman’s work.  That way, if the insurance carrier begins to make noise about filing a declaratory judgment to deny the claim, you have your own lawyer already in place, knowledgeable about what’s happened in the case from the get-go.  But if the insurance company never “pulls the trigger” on denying the claim, then your private lawyer’s involvement (and bill) will be minimal.

Is there still a cost associated with having your own private lawyer involved?  Of course.  But the costs can be small, while still giving you protection should you need it down the road.  Think of it as just one more safety mechanism for your Firm.

I’ve been on both sides of the lawyer role– I’ve served as the private lawyer, and I’ve served as the insurance-retained lawyer.  Either way, it is a very workable solution with some very real benefits for the design community.

Have you retained your own lawyer in a “ROR” situation?  Share in the comment section below, or drop me an email.

Photo (c) TaxRebate via Creative Commons, with alterations

 

Anatomy of a Construction Errors & Omissions Lawsuit (law note)

hard hatsAs regular readers here know, my aim is to keep you out of court.  However, when that is not possible, it is important that you understand the process and procedure for how you will get sued, what happens then, and when there might finally be resolution.

Previously, I explained this process in detail in a series of posts entitled Law & Order: Hard Hat Files.  For newer readers and for reference, here are all sections of the 9 part series (really, 10 parts, with the introduction).

If you’d prefer to download a pdf instead of the above links, go here.

Your turn.  Have you ever been sued for professional errors and omissions?  Wish something else had been explained?  Share, below.

For Engineers & Architects: Top 10 Construction Law in NC Blog Posts

top10Since I have so many newer readers here at Construction Law NC, I thought a brief summary of some of the most popular posts might be helpful.  (I have also added this list to the About Me & Contact Info page, in case you want to refer to it later).

Presented below are the top 10 posts by popularity (although the list does fluctuate some):

  1. “Substantial Completion” on the Construction Project: How is it defined?  (always a popular post; owners want every last paint scratch fixed before they are willing to consider the project complete)
  2. The Sticky Statute of Limitations in NC  (the general rule: 3 years from date of service; however, there are many exceptions)
  3. Statute of Repose: Putting your Risk to Bed  (after 6 years, in North Carolina, even the exceptions to statutes of limitations don’t help)
  4. Planning Ahead for Additional Compensation  (money; cause, we all need to get paid!)
  5. Spring Cleaning: 6 Contract law tips for limiting risk on construction projects  (contracts are the first step in limiting your risk- read here to learn how to make them effective)
  6. How to Smartly Handle Project Documents  (your policies and procedures with documents can make or break a lawsuit)
  7. The Architect’s and Engineer’s “Standard of Care”  (note: perfection is NOT the standard!)
  8. Design Error and the Spearin Doctrine (why your designs must actually, you know, work!)
  9. Active vs. Passive Negligence (sharing the blame, unequally, when something goes wrong)
  10. Adding an “Additional Insured” in the Professional Services Agreement: an exercise in futility!  (for those times when you have an obtuse owner- show them this!)

Are there other posts that you think should be added to this “Best of” collection?  Wish I had written a post on your pet topic?  Share below.

Photo (c) Independent Association of Businesses.

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