LEGAL TRAPS FOR THE UNWARY ENGINEER

1. LEGAL TRAPS FOR THE UNWARY ENGINEER David Redding 704-227-1059 Jorge Cowley 704-293-4333 (The Cowley Law Firm) WWW.DESIGNPROFESSIONAL.ORG

2. DPSG was formed to address the recurring legal issues experienced by design professionals Drawing on experience advising and defending design professionals in and around North Carolina, from contract negotiation through litigation Recognizing the need for a forum to provide the design professional community a place to share its experiences and aid in the development of practices aimed at avoiding litigation To facilitate discussion, idea-exchange, and alerts on emerging trends and changes in the laws affecting design professionals, as well as serving as a resource for design professionals and their counsel ABOUT DPSG WWW.DESIGNPROFESSIONAL.ORG

3. Design error or omission Defective Construction Cost overruns Lost profits Extra Work Delay Failure to approve payment applications TYPES OF CLAIMS WWW.DESIGNPROFESSIONAL.ORG

4. TRAP 1: Expanded Duty of Care WWW.DESIGNPROFESSIONAL.ORG

5. TRAP 1: Expanded Duty of Care • What is the Duty of Care? “The standard of care provides a template against which the finder of fact may measure the actual conduct of the professional.” Schenkel & Shultz, Inc. v. Hermon F. Fox & Associates, P.C.  636 S.E.2d 835, *845 (N.C.App.,2006) WWW.DESIGNPROFESSIONAL.ORG

6. TRAP 1: Expanded Duty of Care • How does the Duty of Care Protect the Engineer? • “The purpose of introducing evidence as to the standard of care in a professional negligence lawsuit ‘is to see if this defendant's actions ‘lived up’ to that standard.” • “Generally this is established by way of expert testimony.” • Schenkel & Shultz, Inc. v. Hermon F. Fox & Associates, P.C.  636 S.E.2d 835, *845 (N.C.App.,2006) WWW.DESIGNPROFESSIONAL.ORG

7. TRAP 1: Expanded Duty of Care • How is the Duty of Care Expanded? • By Contract • “the highest standard” • “best practices” • “best efforts” • By Practice WWW.DESIGNPROFESSIONAL.ORG

8. TRAP 1: Expanded Duty of Care • How will an expanded Duty of Care harm the Engineer? • The minimum is no longer good enough • Anything that can be done, must be done • Lose expert protection WWW.DESIGNPROFESSIONAL.ORG

9. TRAP 1: Expanded Duty of Care • How can an expansion be avoided? • Read the proposed contract • Consult your attorney • Read your E/O policy WWW.DESIGNPROFESSIONAL.ORG

10. TRAP 2: Restricted Contract Administration WWW.DESIGNPROFESSIONAL.ORG

11. TRAP 2: Restricted Contract Administration How often should an engineer visit a project during construction? WWW.DESIGNPROFESSIONAL.ORG

12. TRAP 2: Restricted Contract Administration “. . . intervals appropriate to the stage of the Contractor’s operations: (1) to become generally familiar with and to keep the Owner informed about the progress and the quality of the portion of the Work completed, (2) to endeavor to guard the Owner against defects and deficiencies in the Work, and (3) to determine in general if the Work is being performed in a manner indicating that the Work, when fully completed, will be in accordance with the Contract Documents.” A201, 4.2.2 (1997) WWW.DESIGNPROFESSIONAL.ORG

13. TRAP 2: Restricted Contract Administration How is CA restricted by contract? • Limited number of visits • Specified visit interval • Upon request • Vague triggering events WWW.DESIGNPROFESSIONAL.ORG

14. TRAP 2: Restricted Contract Administration Why are restrictions on CA a potential trap? • Cannot agree beforehand how many visits will be sufficient without violating standard of care • Specific interval will likely be violated • Owner not a professional—doesn’t know when a visit needed • Better off with no CA than restricted CA WWW.DESIGNPROFESSIONAL.ORG

15. TRAP 3: One-sided Termination Provisions WWW.DESIGNPROFESSIONAL.ORG

16. TRAP 4: Hidden Responsibility for Means and Methods WWW.DESIGNPROFESSIONAL.ORG

17. TRAP 4: Hidden Responsibility for Means and Methods By the Owner • Via the Contract • “Supervise” • “Inspect” • “Verify” • “Certify” • Via performance WWW.DESIGNPROFESSIONAL.ORG

18. TRAP 4: Hidden Responsibility for Means and Methods By the Contractor • Via CA • Shop Drawings • RFIs • Observation Reports • Certifications WWW.DESIGNPROFESSIONAL.ORG

19. TRAP 5: Failure to Control Expectations WWW.DESIGNPROFESSIONAL.ORG

20. David Redding 704-227-1059 Jorge Cowley 704-293-4333 (The Cowley Law Firm) WWW.DESIGNPROFESSIONAL.ORG