New Green Standards; Same Green Warnings for Architects & Engineers (law note)

The newest version of the LEED ratings system, LEED v4, has officially been released.  For a comparison of the major changes between LEED 2009 and LEEDv4, check out this downloadable form from the USGBC.LEED croppee

As the folks at Schinnerer’s pointed out, there is one major change that is fraught with peril for design professionals– the requirement for increased transparency concerning the composition and performance requirements of composition materials.

Notes the insurance carrier:
While design firms always had a level of responsibility for ongoing product research, the lack of standardized, affirmative industry data made it difficult for design firms and project owners to assess the impact of building materials on human health.
As with many aspects of sustainability in design and construction, the danger to design firms is likely to come from self-inflicted perils. When a firm accepts responsibility to “ensure that a project meets its goals by using the best products that align with project requirements,” it is essentially giving the project owner a guarantee that is both beyond the firm’s control and uninsurable by any insurance carried by a firm.

 

What is an architect or engineer to do?  NOT make guarantees.  That’s the easiest way to avoid potential problems and lawsuits down the road.

Inform your client that any green design guarantees may cause an otherwise covered claim to be denied by your errors & omissions insurance carrier.  Show them this post, or the Victor O. Schinnerer (CNA) blog article.  Whatever you do, do not make guarantees related to green design.

Your turn.  What has been your experience educating clients concerning green “guarantees” and the uninsurable nature of any such contract provisions?  Share in the comments section.

Photo adapted from (c) Albert Herring

Ask not for whom the bell tolls: it tolls for thee! The construction trial (Law & Order: Hard Hat files Part 9)

This is the final section of a 9 part series discussing the entire trajectory of a construction lawsuit involving claims of design errors or omissions.  If you missed any of the earlier posts, click on the Law & Order tag to read them all.
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The time has come.  You’ve been sued.  Suffered through discovery.  Talked about the project under oath til your throat turned raw.  And responded to the umpteen million request from your lawyer.  You’ve engaged experts, second-guessed your work, and looked at copies of legal documents that made your head spin.  Now, at long last, you will have your day in court.  Or will you?

church bellsWhen will your case be heard?

Your trial date is a moving target, at least in North Carolina.  Depending upon the county or jurisdiction the lawsuit is filed in, you are probably looking at your case taking from 1 year (for a small homeowner lawsuit) to 2 or 3 years for very complex cases.  This is one reason why court ordered mediation is required in all Superior Court cases in North Carolina.  It is also why most construction lawsuits do settle– at some point– prior to trial.  Some cases settle, literally, on the courthouse steps (or in the courthouse conference room).  Others settle during trial itself.  But if you find yourself settling at the last minute, you will have spent the time and money for trial preparation for naught.  A somewhat bitter pill to swallow.

What is involved in trial preparation?

Expect to review many documents relating to the project all over again with your lawyer(s), even if you’ve previously discussed them.  Expect to spend time with your expert(s) discussing your plans and design intent.  Expect to have some mock testimony sessions with your lawyers and others on their team.  Mostly, expect a lot of aggravation.  Trial preparation takes time.  A lot of time.  While much will be done by your construction lawyer, you will need to be actively involved.

How does the trial work?

The trial itself is probably the closest to a Law & Order scene that you will experience.  But don’t expect Jack McCoy (or Perry Mason) moments.  Very little happens in a trial that is completely unexpected.

If the trial is a jury trial (and most are), your lawyers will question the potential jury pool to try to weed out folks that have predisposed themselves to one side of the case.  The other side will do the same.  The result, ideally, is a group of disinterested, neutral folks that will decide your case.

After jury selection, opening statements are given.  These are speeches given by the lawyers to forecast the evidence that will be given to the jury.

The, the plaintiff (that is, the party suing you) will be told to call its first witness.  The plaintiff will proceed to call witnesses to the stand to testify.  The order that they are called in is up to their lawyers, and different lawyers have different strategies for deciding which witnesses they call first, middle, and last.

With each witness, the plaintiff’s counsel will ask open ended, non-leading direct examination questions.  After that, your counsel will ask leading questions on cross examination aimed at poking holes in the other side’s case, and establishing your own case theory.

After the plaintiff has presented its case and rests (and following some procedural motions at that point), the roles are reversed, and your lawyer will conduct direct examination, while the plaintiff will cross examine witnesses.

There are often legal sidebars during a trial, where the lawyers approach the judge and whisper about legal matters.  If extended debate on something is needed, the jury will be excused.  While you will not be invited to the bar to talk during sidebars, your lawyer can tell you what was discussed and how it effects your case.

At the conclusion of all evidence, the jury is given a set of legal jury instructions, and the lawyers present their closing arguments as to why their position should prevail.  Then, you wait.  And wait.  And wait, until the jury reaches a verdict.  The jury foreperson will read the verdict into the record.

What happens after trial?gavel

Depending on the trial results, one side may ask the judge to set aside the verdict (called a j.n.o.v.), which is rarely granted.  Whoever has lost may decide to notice an appeal of the verdict.  Appeals must be based on legal errors that the judge made during trial.  An appeal can take years, and the end result can be the same (that is, the verdict is upheld), overturned (set aside), or remanded for a new trial.  Yes, that’s right: you can be forced to re-try your case.

Is all lost, then, if you lose the jury verdict?  No; definitely not.  No one likes to spend time and money on appellate briefs.  So, even though the case is over, the parties may *still* negotiate a settlement.  Be aware, however, that you will have a judgment “on the books” against you if the jury found that way, and that can affect your credit ratings.  However, the judgment will also be rendered “satisfied” if you settle (or pay it off), which generally helps re-establish your good credit rating.

That’s it!  You now know just enough about the construction trial process to be dangerous!   I’ve obviously had to condense many details in this series, so if you have any questions or want me to expand on any area, drop me a note or comment in the comment section of the blog.

Adding an “Additional Insured” in the Professional Services Agreement: an exercise in futility! (law note)

As an architect or engineer,  you may be asked to sign a contract that has a requirement of adding the Owner (or Contractor, in a design-build project) to your own insurance as an “additional insured”.  This is usually a fall out of the fact that the Owner is treating you like a contractor and using “stock” contract language.  It is not appropriate, nor sometimes even possible, to add the Owner to your professional liability policy.

This is beacuse professional liability insurance only provides coverage for “professional services”.  That is, if it is even possible to buy such coverage, it won’t work to avoid any risks the Owner is seeking to avoid, because the Owner is not providing licensed architectural or engineering services on the Project.

In fact, because of the way professional liability policies are generally written, naming the project Owner as an additional insured essentially voids any coverage for the owner for your Firm’s design errors & omissions.

What should you do with a stubborn Owner who insists he wants to be an additional insured under your E&O policy?  Explain the facts to him, and point out he is risking voiding coverage all together.  Tell him to call me, or point out this post to him.  Also, several insurance brokers, agents, and companies have simple one or two page information sheets that you can provide to the Owner to help with his education.

Remember, having an “Additional Insured” in an Errors & Omissions policy is a true exercise in futility.  It may not be what the Owner wants to hear, but such is life!not want to hear

 

Question time:  have you ever been asked to add an Owner to your E&O insurance?  How did you handle it?  Share in the comments section, below. 

And if you haven’t already, be sure to download your free white paper on the 7 Critical Mistakes that Architects & Engineers make– it’s in the box on the top right hand side of the blog.

 

Photo credit.

Mine is better than yours! Battle of the experts in the construction lawsuit (Law & Order: Hard Hat files Part 6)

battling deerEventually, most construction lawsuits of any size involve hiring experts to review the project.  These experts then usually issue an opinion as to whether or not you, as the design professional, violated the professional standard of care for architects or engineers working on a similar project in a similar community.

If the case proceeds to trial, all sides will have their own expert(s), with rare exceptions.  Thus, the “battle of the experts” begins.  That is, a jury will have to listen to your expert, their expert, and the juror’s own common sense, and try to make out who is correct.  As with most things, there are probably valid points made by all of the hired experts (that is, of all the reputable ones, at any rate).  If a case gets to trial, you can be sure of it.

Hiring an expert to support your position can be a scary prospect.  You will essentially be paying (or having your insurance carrier pay) to have a competitor look over all of your work with a fine-tooth comb and 20/20 hindsight, to see if he can concur that your design met the standard of care.  Your attorney should work with you to get a good, solid professional peer retained as your expert; however, if you have any suggestions of who to use (or, who you do *not* wish to use), make those opinions known.  It is important to hire someone who is impartial about the outcome of the case, but you will not be required to hire your worst enemy/competitor.

Another protection that is built into litigation, is whether or not the expert’s opinion will ever see the light of day.  If the expert cannot support your position, he will be designated a “consulting expert” and his opinions will remain only between you, your lawyer, and the expert.  Assuming the expert does support your position, he will be designated as a “testifying expert,” at which point the other side can look at his records and notes, read any written reports he generates, and take his deposition.

Hiring an expert doesn’t have to be an arduous process, but work with your lawyer to get someone you respect on your side of courtroom.

Questions? Comments?  Share your experience with experts, or being an expert, in the comments section below.  And don’t forget to sign up for the Construction Professional newsletter and my free white paper on 7 Critical Mistakes, on the right hand side of the homepage.

Photo (c) Sias van Schalkwyk

 

 

 

Greenwashing–an Interview with James d’Entremont (guest post)

James d’Entremont headshotToday, a guest interview on the always timely topic of greenwashing. Alex Levin is a writer for Seeger Weiss LLP, a top ranking Plaintiff’s law firm specializing in consumer protection, commercial disputes, and defective product injuries.  Please welcome Alex to the blog, as he shares a greenwashing interview with us. ______________________________________

As the public grows increasingly aware of the environmental costs associated with the modern consumer lifestyle, it also grows increasingly concerned. Such public concern has become a major factor in driving the industrial world to the adoption of an environmentally friendly façade, which has come to be known as greenwashing. While such companies may strive to be seen as addressing environmental concerns, not all of them are actually doing so, and some may be responsible for severe harm to the environment even while claiming to be catering to it. To what degree then can the government or the public regulate such “false advertisement,” or discern between those truly conscientious organizations and those which mislead?

James d’Entremont may be something of an expert on the topic of greenwashing. A Baton Rouge – based attorney for Moore, Thompson & Lee, he is also on the board of directors for the Louisiana chapter of the United States Green Building Council (USGBC), having both spoken and written extensively on the subject of greenwashing. He spoke to us about the surprising degree to which this rapidly growing practice is illegal, and what the public can do to fill the void left by the government’s limited involvement.

What measures has the US government taken and what measures do you think it should take to dissuade greenwashing?

James d’Entremont: The primary federal regulations aimed at preventing greenwashing are set forth in section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a) (1), and enforced by the Federal Trade Commission (FTC).  The FTC’s Guides for the Use of Environmental Marketing Claims, commonly known as “the Green Guides,” sets forth its interpretation of federal trade regulations governing environmental marketing claims.  The Green Guides and accompanying regulations require that parties making environmental marketing claims pertaining to products and product-related services have a reasonable basis for substantiating their claims.  According to the Green Guides, this “will often require competent and reliable scientific evidence” to back up the claim, 16 C.F.R. 260.5.  Moreover, the Green Guides require that an “environmental marketing claim should not be presented in a manner that overstates the environmental attribute or benefit” of the product or service and, further, that marketers “should avoid implications of significant environmental benefits if the benefit is in fact negligible.”  -16 C.F.R. 260.6(C).

The existing FTC regulations, while perhaps not perfect in every case, can provide a solid framework for adjudicating greenwashing claims.  That said, because the Federal Trade Commission Act does not provide a private right of action, private litigants must resort to other federal or state laws to bring a greenwashing claim, citing the Green Guides and relevant regulations as a “measuring stick” to judge the reasonableness or culpability of the defendant’s conduct.  Such actions may be based in state consumer protection laws, breach of contract, fraud, misrepresentation, commercial law or product liability.  Depending on the nature of the claim, various federal statutes may also provide a basis for relief.

What measures has the public taken to discourage greenwashing and what should the layman do in response to this trend?

JD: Social media has played a big role in addressing claims of greenwashing.  There are numerous blogs and websites addressing greenwashing in general and issues with specific products. For example, www.greenwashingindex.com is a website promoted by EnviroMedia Social Marketing and the University of Oregon that is devoted to identifying and indexing greenwashing claims across various industries and products.  In addition to this and other similar sites, there are also websites, blogs and twitter feeds devoted to specific products such as sprayfoamdangers.com which is focused entirely on problems related to spray foam insulation.  There are also an increasing number of private lawsuits addressing greenwashing claims.

As far as how the public should protect itself, the key is to seek clarification as to why the product or service is supposedly “green” and document any representations concerning the purported environmental attributes – as well as any potential environmental hazards – of the product or service.  Often times, the purportedly green product or service has certain environmentally friendly attributes – which are being promoted – as well as certain not-so-environmentally-friendly attributes which are either not promoted or completely undisclosed.

What are some examples of products that might be greenwashed?

JD: For one example, polyurethane spray foam insulation (SPF) is widely touted as green because its superior insulating capabilities can make a home or other building dramatically more energy efficient.  While this is certainly true, what is less well known – and what is generally omitted from marketing claims by SPF insulation manufacturers and installers – is that SPF is comprised of ingredients that, when evaluated individually, seem far from green.  These include isocyanates, amines and various flame retardants.  These chemicals are known irritants and, in the case of isocyanates, may cause sensitization or cause or aggravate asthma and other adverse health effects.  As a result, if proper precautions are not taken or if the SPF insulation is not properly installed, building occupants may suffer adverse health effects caused by the chemicals in or emitted from the SPF insulation.

Moreover, SPF insulation may not be appropriate for certain consumers, such as people with pre-existing asthma, allergies or sensitivity to one or more constituent chemicals.  In addition, because the SPF insulation dramatically “tightens” the house, there is less fresh air coming in from the outside which, in turn, may cause or trigger allergies due to increased moisture or airborne allergens.  Unfortunately, homeowners are generally ignorant of this because these risks are typically not disclosed to them.  Making matters worse, many manufacturers do not disclose all of the chemicals contained in their products.  In contrast, the purported green attribute – energy efficiency – is typically highly promoted.  The EPA is currently investigating health problems associated with SPF insulation and there are several individual lawsuits as well as at least one national class action, with more expected, seeking recovery of damages arising from this purportedly “green” product.

What factors encourage greenwashing?

JD: Rising consumer demand for environmentally friendly and high efficiency products and services is leading to more claims of greenwashing.  I expect this market trend to continue with a corresponding increase in greenwashing claims.

Now, dear blog reader, it is your turn.  Do you believe the green washing problems will get worse before they get better?  Share your thoughts in the comment section of the blog.

 

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