Errors, Omissions and Typos, oh, my!
Years ago, I was the architect and Project Manager for a new, $40-million-dollar middle school in New York state. It was a nice design in a great location. The only 4-story school I have ever been involved with.
During the construction phase, there were the inevitable changes to the scope of the project, and the resulting Change Orders. The School District’s Superintendent, let’s call him “Dr. K” (no, not Kevorkian) would show up at the construction meetings wearing a huge “NO CHANGE ORDERS” button on his lapel. After several of these meetings, my boss, Mr. Schwartz, asked me to draft a letter, based on one that the founder of the firm had written himself decades before, to explain the reasons for Change Orders.
I wrote that Change Orders are almost inevitable in a project of that size and complexity, and that an amount of 4 to 6% of the budget was common in our industry. The letter also stated that we were in fact at only about 2%, of which about half was due to scope creep (items added after the project was designed) and to existing conditions his staff knew about but neglected to tell us (underground fuel tanks, buried broken glass, …) Also that the rest of that 2% was indeed due to our own errors and omissions, and that architects are also human and mistakes are to be expected in a set of about 300 drawings and 2,000 pages of specifications.
“Dr. K” wrote back to “Dear Mr. Schwarz” saying something like “well, this may be common and acceptable in the AEC industry, but it is not acceptable to me nor to the taxpayers of my school district, and I reserve the right to take legal action.” His 5-line response had 10 typos, including the spelling of Schwartz.
Sorry, this will be along comment. I know the blog entry is somewhat aged, but I thought I could add some context to Mr. Schwartz’ letter. Now, I happen to work for a large firm but gained my most formative experiences at a small firm and I think it is worth imparting some words of encouragement in dealing with clients like Dr. K.
While it may be Dr. K’s ‘right’ to proceed with a claim against the design professional(s), one could have informed the naive but bullying Dr. K that in order to successfully prosecute a claim the School District (and, by extension, his taxpayers) will have to engage an attorney at great cost. Secondly, they will have to engage an expert in the ‘standard of care’ for a design professional, as this – not perfection – is the standard that performance is weighed against. This expert, again at significant cost to the District and their taxpayers, will have to review the documents and render a professional opinion as to whether the design professional did in fact violate the ‘standard of care’. And finally, once this has been determined, the District will have to prove that the negligence that violated the standard of care caused compensable damages. Again, an expert will likely be involved. But the fun doesn’t stop there. It is likely that your Agreement calls for face-to-face negotiation to settle any dispute and, failing that, that a mediation is caalled for. Again, this will involve an attorney and a sharing of costs for an expensive construction attorney to lecture the two parties how expensive and ill-conceived litigation may be and who will then work toward getting the two parties to reach a settlement that makes both parties equally unhappy.
Yes, it is true that the design professional would also have to engage attorneys and experts, but you will have the support of your Professional Liability carrier, and they will help you find a competent attorney. If face-to-face negotiation turns out to be possible, you can always forego some owed fee to settle the matter or achieve a nuisance value settlement (that will have to be backed up by an ironclad attorney-drafted settlement agreement) of contributed cash. Keep in mind that you have a deductible and your carrier will not be responsible for any costs until you reach that deductible. They will be concerned mainly with the costs of defense versus the costs to settle, so keep in mind that it will ulitmately be a business decision, and not a matter of right and wrong, no matter how righteously indignant (either you or the School District, for that matter) one may feel.
Another important consideration: Almost every claim will have the work product of a Consultant involved. Make sure you have a solid Agreement in place with them and that they are aware of the need for them to indemnify you against any damage their standard of care failings may have cost. Make sure you stand shoulder to shoulder with them in standing up to bullying clients. Let’s face facts, architects want everyone to be happy and want to say yes to everything and solve everyone’s problems. This makes you a big fat target. So, stand up to the bully on the playground and protect your lunch money!
Finally, keep in mind that all construction projects have at least three critical parties (Owner, Design Professional, & Contractor) and each of them have obligations and responsibilities. Shockingly few have anything to do with errors on a drawing or in a specification. Many claims are a result of untimely performance (answering RFIs or turning around Shop drawings) or because an Owner indignantly refuses to pay or process legitimate Change Orders, or the Contractor (or increasingly the CM) failed to properly assign the work to Trade Contractors or otherwise failed to coordinate the work. Often there is a failure to properly balance or commission the building systems. Then there are field conditions, overly zealous Authorities Having Jurisdiction (building inspectors or officials), etc.
I hope you can crib some of this to impart to those seeking your assistance.