An Ounce of Prevention is Worth Every Penny: Preventing Lawsuits for Design Firms
“An ounce of prevention is worth a pound of cure” and “A penny saved is a penny earned” are expressions that emphasize the importance of being proactive and making smart, cost-effective decisions.
In a previous life, I was an attorney who represented design professionals in complex construction litigation. I represented architects and engineers in lawsuits for alleged negligence for a breach in the standard of care and/or breach of contract resulting in damages to the owner of construction projects. Allegations against the design professional could include a failure to meet project requirements, delays, cost overruns, or other problems that result in damages to the client or other parties, including general contractors and subcontractors.
Lawsuit Impacts for Design Firms
The effects of a lawsuit can have long-term effects that can linger over a design firm for years. These may include, but aren’t limited to, the following.
The design professional may be ordered to pay monetary damages to the plaintiff, which can be substantial and have a significant impact on their financial stability. These damages may or may not be covered by the design professional’s professional liability policy if proper precautions are not taken.
Time and Resources
Defending a lawsuit is a lengthy and expensive process that requires a lot of time and resources, including hiring a lawyer, responding to discovery, preparing documents, and attending depositions, mediations, arbitration, or trial.
Being involved in a lawsuit can harm the design professional’s reputation and credibility, making it harder for them to secure future business.
How to Prevent Lawsuits
These lawsuits can be avoided or managed with an ounce of prevention.
By switching from a private litigation practice to working for Holmes Murphy, I am able to take a more proactive approach in helping the same population of clients implement preventive measures and risk management programs that help reduce the risk of a lawsuit against the design professional.
A well-designed risk management program can include the following elements:
- Contract review — Careful review and management of contracts can help identify and mitigate potential issues before they arise. This can include reviewing clauses related to scope of work, timelines, fees, insurance requirements, and dispute resolution procedures.
- Continuing education — Providing training and education to design professionals on industry standards, best practices, and risk management can help minimize the risk of legal disputes and protect against potential lawsuits.
- Adhering to professional standards — Following industry standards and best practices, such as building codes and design standards, can help demonstrate the design professional’s competence and reduce the risk of legal action.
- Clear communication — Establishing clear lines of communication with clients, contractors, and other stakeholders can establish clear expectations, prevent misunderstandings, and avoid disputes.
- Documenting the project — Maintaining accurate and detailed records of the project, including contracts, invoices, correspondence, and meeting minutes, can provide evidence in the event of a dispute and help to demonstrate compliance with the contract documents.
- Incident response plan — Developing and implementing an incident response plan can help design professionals quickly and effectively respond to potential legal issues, minimize damage, and protect their interests.
A well-designed risk management program can help ensure projects are completed on time and within budget, while also protecting the interests of all parties involved. By implementing these preventive measures, design professionals can reduce the risk of a lawsuit, protect their financial stability and reputation, and may find that an ounce of prevention is worth every penny!
If you’re not sure where to even start and need advice, we’re happy to help. Please don’t hesitate to reach out! And, check out our Architects & Engineers webinars!
Published on: 02.13.23