Engineering Inc. - Winter 2020 - 48

RISKMANAGEMENT

Peering at Peer Review Risk

BY KAREN ERGER

espite the obvious utility of peer reviews, some
engineering firms are reluctant to perform them.
They fear that peer reviews will expose them
to liability wildly out of proportion to the fees
earned. However, a peer review-the "practice of
obtaining an independent, unbiased evaluation
of the adequacy and application of engineering principles, standards and judgment from an
independent group of professionals having substantial experience
in the same field of expertise," according to ASCE Policy Statement 351 in support of peer reviews-offers an important opportunity to bolster safety and improve project outcomes.
This issue has come into sharp focus with the 2018 failure of
the Florida International University (FIU) pedestrian bridge that
killed six people and injured ten. Victims of the collapse and
their families filed lawsuits not only against the bridge's general
contractor, design engineer, and consulting engineer, but also
against the engineering firm retained to provide a state-mandated project peer review for a total fee of $61,000.
WHAT ABOUT LEGAL PROTECTION
FOR THE PEER REVIEWER?

In recognition of both the benefits of peer reviews and the liability
concerns of engineers who might otherwise be willing to perform
them, the state of Missouri in 2012 passed a first-in-the-nation
"peer review law" providing peer reviewers with immunity from
civil liability. Kansas followed suit in 2014 and passed a peer
review law that not only provides immunity to peer reviewers but
protects peer reviews from the discovery process.
To date, no other states have passed peer review laws. In the
wake of the FIU disaster, Engineering News-Record opined, "Now
is the time to seek immunity laws in more states. They will lead
to more robust reviews than threats of lawsuits can deliver."
Whether states will see the merit of passing laws that encourage
firms to undertake this critically important work or, alternatively, shy away from providing immunity to firms that might
serve as an additional source of compensation in the event of a
disaster remains to be seen.
HOW CAN PEER REVIEWERS MANAGE THE RISKS?

In the meantime, engineers who perform peer review services
will need to use all available means to manage the risks of peer
reviews while understanding the limitations of those techniques.
Here are some suggestions:
Remember that the standard of care does not change for
small-fee projects. When making your go/no-go decision, bear
in mind that the standard of care applies to all projects, regardless of fee size. "We were not paid enough" is never a defense to
a negligence claim.
Draft a clear scope, and perform it to the letter. When
claims arise on peer-reviewed projects, the plaintiffs are likely
48

ENGINEERING INC.

WINTER 2020

to assert that the peer reviewer
should have identified the errors
allegedly made by the design engineers. A clear and detailed scope
can serve as the cornerstone of
your defense by establishing which
aspects of the project were-and,
just as importantly, were not-the
subject of your review. However,
this only works if you perform the
scope as written, so be sure the
project team knows its parameters
Karen Erger
and performs accordingly.
Perform your services in accordance with applicable law. If
your peer review is mandated by applicable law, make sure that
your scope and your performance are in accordance with the
legal requirements. If you have any questions about what the law
entails, consult your legal counsel.
Deploy protective contract terms but be realistic about their
effectiveness. Contract terms such as limitations of liability and
waivers of consequential damages are good to have but are only
effective between the parties to the contract-they do not afford
protection against third-party claims. Likewise, requiring your
client to indemnify you against claims may be prudent practice,
but remember that the indemnity is only as good as your client's
ability to pay, and that the anti-indemnification laws in many
states may make the indemnity unenforceable.
Ensure compliance with your firm's in-house review processes. Strict adherence to your firm's internal quality processes
is essential to managing the risk of peer review projects. Do not
allow your team to fall into the trap of believing that peer review
projects are unlikely to generate large claims and thus do not
need to be subjected to internal checks.
THE UPSHOT

Peer reviews represent an important opportunity to improve
public safety and the quality of projects by identifying design
errors and omissions prior to construction and operation. But
engineers who undertake peer reviews must manage their risks
through prudent project selection, careful scope and contract
formation, and strict adherence to quality assurance procedures. n
Karen Erger is senior vice president and director of practice risk management at Lockton Companies. She also is a member of the ACEC Risk
Management Committee and can be reached at kerger@lockton.com.
The material in this article is provided for informational purposes only and is
not to be regarded as a substitute for technical, legal, or other professional
advice. The reader seeking such advice is encouraged to confer 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 article.

Engineering Inc. - Winter 2020

Table of Contents for the Digital Edition of Engineering Inc. - Winter 2020