DESIGN FIRMS SERVING AS CODE EXAMINERS
For a number of reasons, including budgetary cutbacks, lack of skilled workers, and staffing demands caused by disasters or emergencies, local building code entities sometimes seek to transfer their administrative responsibilities. These responsibilities may include transferring the certification of design compliance with codes or construction compliance with design and regulatory requirements to the design firms themselves.
Challenges and Opportunities
Stepping into this new role is a risky proposition for design firms and exposes them to heightened risks as other parties—including various levels of governments, owners, lenders, and other stakeholders—will justifiably rely on these certifications. Under ordinary circumstances, building officials who carry out their assigned functions of plan review and construction approval are protected from legal actions against them because of the government’s sovereign immunity and their status as agents/employees of the government. That is not necessarily the case for design firms, unless the government proactively and expressly provides such protections.
Risk Mitigation Steps
To mitigate this exposure risk, design firms should request that the government’s building department delegate its normal duties to the design firm or require the design firm to act on its behalf during emergencies by:
extending and documenting sovereign immunity to the design firm; and
expressly limiting the liability of the design firm to harm caused by gross negligence and wilful, wanton, and reckless behavior.
In addition, because the service is for the benefit of the project client, the design firm should require the client to:
waive all claims for any harm that might result from the design firm filling in for the government; and
defend and indemnify the design firm for any costs, losses, or damages to claims from the state, contractors, lenders, or other parties who either can claim through the project client or have an independent cause of action.
This certification service as a substitute for government responsibilities can be viewed as an opportunity for expanded services and compensation as long as certain risk management steps are taken (as noted above) and appropriate fees are collected that reflect both the cost of the services and the risk the services can create.
Certification Services
Firms should only certify what they know to be true based on first-hand observations and knowledge, either in person or as appropriate through technological means and due diligence. Otherwise, a firm opens itself up to potential fraud claims as well as ethics and registration violations.
Before proceeding with these additional services, firms should ask:
Is the design firm capable of making a declaration relating to conditions within the direct knowledge or control of the design firm?
Does the design firm have to perform additional professional services or have additional tests conducted to be able to certify a fact?
Is the certification properly qualified and stated as a professional opinion based on an expression of knowledge, information, and belief?
Does the proposed certification language constitute an express warranty or guarantee on which not only the client but also anyone else may rely?
Sample Language
When certification relates to the issue of a project being built in substantial accordance with plans, specifications, and applicable codes, the design firm should consider using language as follows:
In my professional opinion from my review of the plans and specifications provided to me by X and based on my visual evaluation of the completed construction and “as-built” information provided to me and represented as being correct, I certify that the project was constructed in substantial compliance with the requirements of the construction contract and that I am aware of no variances from the approved plans or violations of the applicable codes and standards.
Conclusion
A design professional has a right to be concerned with any attempt by a government entity to delegate its powers to design firms without providing those firms with the same protections that exist for the government. The exposure to claims, even if those claims have little merit, could be disastrous to the design firm.
Victor and CNA work with the AIA Trust to offer AIA members quality risk management coverage through the AIA Trust Professional Liability Insurance Program, Business Owners Program, and Cyber Liability Insurance program to address the challenges that architects face today and in the future. Detailed information about both these programs may be found on the AIA Trust website, TheAIATrust.com.
