Engineering Inc. - November/December 2019 - 29

client, he lets the project manager communicate it. "The goal is to
reduce adversarial situations," he says.
Merrick & Company established a robust framework for dealing
with risk and standard of care concerns. Boardman and others
review incoming contracts using a four-category risk matrix that
taps both internal business and technical expertise. They assign
categories based on risk criteria. Category 1 means the project
represents very low risk and the project manager simply has to
communicate terms with the business unit leader. Category 2
requires the project manager to talk to the COO. Category 3 and
4 require approval at an inside director's meeting, with the latter
requiring president and CEO approval.
However, walking away from a deal is sometimes
necessary. Boardman believes this decision should
not be based solely on the monetary value of the
project or the potential revenues but rather, the
exposure to risk and whether the terms of the
deal push the firm beyond the standard of
care. If a contract is unreasonable, if terms
are too onerous, or the company is proposing
a schedule or work framework that is nearly
impossible to meet, you have to say no. "Some
of the biggest claims we have paid out involved
small projects with lower fees," he says.
THE FIX IS IN

Of course, even when a design firm does its best to vet contracts
and set terms and conditions with a client, a significant problem
can arise. In some instances, a firm realizes it has made an error. In
these cases, consulting with an attorney or the insurer before taking
the next steps is typically wise.
"Admitting liability or offering to fix the problem at your own
expense without first consulting with your professional liability
insurer can jeopardize your coverage," Erger says. "You do not want
to run away from a situation, but you also do not want to fall on
your sword and admit fault without proper investigation. Instead
of saying, 'You are right, it's our fault, we'll pay for it,' you can say,

"Professional liability
is a long tail exposure.
So, it is important to
implement consistent
documentation
practices and to
continually educate staff on these
documentation and communication
processes."
DAN BUELOW
MANAGING DIRECTOR, ARCHITECTS AND
ENGINEERS GROUP
WILLIS TOWERS WATSON

'Thanks for bringing that to my attention. I'm going to look into
this, discuss with the project team, and get back to you ASAP.' You
will want to talk to your insurance company or legal counsel and
work toward a viable solution."
Boardman says the first step at Merrick & Company is to
appraise the situation and understand exactly where things went
wrong. If the firm has met standard of care provisions, further discussion about responsibility for the issue may be necessary.
"If we get pushback on something we do not just roll over. It
depends on the client and the situation. But if it is a client we have
worked with for a long time and have a good relationship with, we
will probably take care of the issue in order to maintain a good relationship regardless if it was our fault or not," Boardman says.
At KPFF Consulting Engineers, communication is at
the center of everything. "It is important to communicate, keep things out in the open, and never hide
from a problem," Tawresey says. "Almost every
major claim could have been significantly mitigated if issues had been addressed early on."
Documentation can be critical when it comes
to effective risk management practices, according to Buelow. "Professional liability is a long tail
exposure. So, it is important to implement consistent documentation practices and to continually educate staff on these documentation and communication
processes," he says. "Furthermore, education and training are
critical-partly because standard of care is not something that is
typically addressed at schools and universities, and many engineers,
particularly younger ones, are not well versed on the topic."
Boardman adds that Merrick & Company training revolves
around various aspects of standard of care, including contract
clauses, how to interact with clients, and how to use internal
resources to understand what fits the standard of care.
While different clients may have different ideas and expectations
about projects, a design firm's compass must always point toward
rendering services in line with the ordinary degree of skill and care
demonstrated by other practitioners under similar circumstances.
"It is important for engineers to not only understand the standard of care, but also be able to explain it to clients, help them
understand that there's no such thing as perfection, and persuade
them to have a reasonable standard of care in their contracts,"
Erger says. n
Samuel Greengard is a technology writer based in West Linn, Oregon.

The material in this article is for informational purposes only
and is not to be regarded as a substitute for technical, legal, or
other professional advice. The reader is encouraged to review any
information contained in this article carefully and evaluate its
applicability in light of particular situations, as well as to consult
with an appropriate professional consultant or attorney. ACEC
and its officers, directors, agents, volunteers, and employees are
not responsible for, and expressly disclaim, liability for any and all
losses, damages, claims, and causes of action of any sort, whether
direct, indirect or consequential, arising out of or resulting from
any use, reference to, or reliance on information contained in
this publication.
NOVEMBER / DECEMBER 2019

ENGINEERING INC.

Engineering Inc. - November/December 2019

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