Certificates of Merit for NC lawsuits against engineers and architects? (still no)(law note)

Certificates of Merit  are documents intended to show that a true issue exists with a professional’s work, prior to that person being sued.  While North Carolina does require that a person suing a medical provider first have the matter reviewed by a professional (and attest to that in the Complaint), there is no requirement for any review prior to a lawsuit against an architect, engineer, or surveyor.  Thus, anyone can file a lawsuit against an engineer/architect/surveyor without first having their case eyeballed reviewed by another professional. magnifying glass

Over the years, there have been attempts at adding a Certificate of Merit requirement to design professional lawsuits.  See, for example, examples here: from 2005; from 2007from 2011; and from 2013.

While many states do have Certificates of Merit for lawsuits against licensed design professionals, North Carolina, to date, does not.  This is a shame, because having a professional review a potential error *before* a party spends the time and money to file a lawsuit, can only help eliminate frivolous, merit-less claims.   To win a lawsuit against a design professional, a party will need to have an expert testify that they were negligent.  The Certificate of Merit just ensures that there truly is a valid dispute before a design professional’s name and reputation get pulled into expensive, perhaps unnecessary, litigation.

Would a requirement for a Certificate of Merit eliminate unnecessary claims?  Perhaps not.  But, it gives all parties an honest “first look” at the alleged design errors before the lawyers sharpen their claws begin filing their lawsuits.

Share your thoughts on such certificates in the comments, below.

 

Do Not Pass Go! Duty to Defend in a Professional Services Agreement (law note)

sword to defendRecently a client asked me to review a contract for his Firm.  The Owner, who had prepared the draft, had inserted a rather stringent “duty to defend” clause.

As I told my client, a duty to defend clause is not a good idea for a couple of reasons.  First, if you agree to provide a defense, what that means is that you are footing the bill for the Owner if the Owner is sued by another party.  Think about that for a minute.  You are paying legal fees for someone else’s legal defense.  You may or may not be able to direct the litigation or have a say in who is hired.  Can you say open check book?

Secondly, and more importantly, the duty to defend is almost never insurable.  What that means is that your professional liability carrier will not be footing the bill—your Firm will be doing it.  This is not a case of adding the Owner as an additional insured, so do not confuse the two.  Agreeing to a duty to defend is an extremely burdensome, and potentially costly, mistake.

What do you do if your Owner is insisting on such a clause?  Try to get the clause written out of the contract, period.  Point out to your Owner that it is not covered by your professional errors  & omissions policy.  That alone is often enough to get Owners to agree.  You might also contact your insurance carrier/agent to add weight to your statement.  They can point to the provisions in the policy that will likely exclude coverage.

If the Owner will not strike the provision, then what?  Seriously think about whether this is a risk you can afford to take.   What type of project is it?   Do you know the contractor and other parties—are they reputable and qualified?  And most importantly, is the profit to your Firm such to justify the potential risk.  Usually, the answer to the last question is no.

Have you seen a “duty to defend” in an Owner contract?  Did you agree to it?  Share in the comments below, or drop me an email.

Photo: (c) MatthiasKabel via Creative Commons Attribution-Share Alike license.

What you don’t know about construction law can hurt your engineering firm (law note)

truckbridgeWelcome to a new year!  By now, you’ve eaten the last of the Christmas cookies, opened all of your presents, and rung in 2019.  Back to business, right?  The new year is always a good time to remind your employees, and yourself, that there are no shortcuts on the success train.

Sure, you can sometimes skate by for awhile, but karma has a way of catching up with you.

One thing to keep in mind is that if you practice in multiple states: be sure you are well aware of the rules and regulations concerning your license in each state.   Each state does things a little differently, and what may be perfectly acceptable in one state may not be in another state.

For example, I had an out of state professional design firm that was unaware of the supervision requirements of non-professional staff that is required under North Carolina law.  Another client had some North Carolina references on its website without an appropriate disclaimer as to who was, and who was not, licensed in North Carolina.  In both of those cases, I was able to help the professional firms get out from under the violations with minimal damage, but it cost time, money, and aggravation.

Do violations always get discovered?  Not always, but- like speeding– a violation is a violation is a violation, and at some point, your number may be up.

Save yourself the headache, bite the bullet, and make sure you retain competent professionals in *each* state that you are licensed in make sure that you are playing by that state’s rules before you work in that state.  (Obviously, if you have North Carolina questions, I’d love to work with you!)

You’ll thank me later.

Your turn.  Have you ever been surprised to learn about a state’s specific requirements after you’ve already violated those requirements?  Anonymous confessions encouraged– let’s learn from each other!  (or, drop me an email!)

 

 

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

7 Ways Technology is Changing Construction (guest post)

Eric-Weisbrot---Marketing-ManagerToday, we have a guest post by Eric Weisbrot, Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.  Welcome, Eric!

It is difficult to argue that technology is having minimal impact on society as a whole. Not only are digital enhancements making waves on the consumer side of the line, but businesses are feeling the effects as much if not more in recent years. The construction industry is no exception to this technological shift, but the influence the change is having on licensed construction contractors and long-standing businesses is far-reaching. Here are several ways technology is disrupting construction on a day to day basis.

 #1.  Autonomous Equipment.  One of the most notable changes in construction is the addition of autonomous equipment on job sites. Several technology-focused companies are currently testing and perfecting construction machines that require no human interaction to operate. The hope behind this shift is to reduce the impact of the labor shortage in the industry while improving efficiency and productivity on each job.

#2.  Wearable Technology.  Technology is also having an impact on individual workers and how they stay safe and productive each day. Wearable technology, including hard hats, protective eyewear, and gloves are all being developed and rolled out to contractors throughout the country. This digital change offers construction management an easy and efficient way to monitor workers’ production and progress from afar.

#3.  Use of Materials.  Technology is also being used to improve the materials used in building and maintaining structures. The most significant shift in this arena is the use of 3D printing to create materials both on- and off-site, faster and in a more cost-effective way than traditional methods. Carbon fiber through 3D printing allows for the simple production of a variety of materials, including turbine blades, lighting, and pavement.

#4.  Productivity.  Construction sites have seen an influx of drone use as well for a variety of reasons. Drones may be used to identify production issues or monitor progress over time, without the need for the site manager to be physically present. The use of drones in construction has also been touted as a more efficient way to recognize hazards and weather issues that often deter job completion. 

[Editor’s note: there are several legal issues involved with the commercial use of drones.  We have a legal presentation on this topic– if you are in North Carolina and want us to present it to your organization, give me a shout out!]

#5.  Training and Safety.  The use of augmented and virtual reality is also making its way to the construction industry. Both technologies give construction workers a realistic view of a project before it even begins, aiding in creating accurate timelines and budgets. However, more importantly, augmented and virtual reality resources are able to provide a method of training for a higher level of safety on each job site. This has the potential to reduce the total cost of operating a construction project and save lives in the process.

 #6.  Analytics.  Big data is a buzzword throughout the technology landscape, but it does have real implications for construction businesses. The ability to gather data from wearable technology, drones, AR and VR platforms, and even autonomous equipment can be a game changer for site managers. The details included in the data may be used for current and future decision-making, helping construction projects run more efficiently.

 #7.  Running the Business.  Finally, technology in construction is making a significant change in how companies are run. Whether large or small, construction businesses have countless digital tools to help with tasks from accounting and payroll to inventory and timeline management. The technology behind these software platforms is becoming less expensive to create as more companies utilize their power, giving most businesses an opportunity to take advantage.

It may seem like a far-fetched idea to see technology influencing nearly every corner of the construction world, but the reality is this shift has already taken place in a significant way. Construction site managers, large companies, and individual contractors alike can and should jump on the digital bandwagon in ways that best suit their needs in an effort to stay profitable and competitive.

 Thanks, Eric, for an informative post.  Technology use in the field of construction will certainly only continue to grow over the next few years.  Readers: do you have a technology issue, concern, or tip?  Share in the comment section below.

 

 

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