PEPP Leadership Relationships Are Long-lasting
When NSPE President-elect and PEPP Past-chair Bernie Berson, P.E. was asked to attend the Alaska SPE meeting in Fairbanks, he contacted current PEPP Chair Steve Theno, P.E. to be sure they could see each other during the visit. Steve suggested a tour of Barrow, the most northern community in the U.S., as well as on the North American continent. Steve arranged for a guided tour, which included a visit to Point Barrow, the tip of the continent at the Arctic Sea. The photo shows Bernie (left) and Steve standing together in a wind-chill of 65 degrees below zero, demonstrating the reality of the lifelong relationships that are developed in NSPE and in PEPP through the sharing of efforts to serve our profession.
PEPP Celebrates 50th Anniversary with Gala Event
Please join us for the
PEPP 50th Anniversary Gala
July 26, 2007
Denver Marriott City Center Hotel
Enjoy a black tie optional reception, dinner, awards presentation, and dancing as we celebrate 50 years of PEPP dedication to providing NSPE members benefits from standard contract documents, continuing education programs, politcal advocacy, professional liability products, networking, and more.
Visit the NSPE Web page, and click on the "Denver" icon to register.
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Professional Liability/Risk Management Brief — Site Safety
Richard B. Garber, Vice President A/E/C Risk Management Services, Victor O. Schinnerer & Company, Inc.
All parties on a construction site have a duty to exercise reasonable care to avoid the risk of injuries to workers. Even though they are not responsible for construction, courts have found that design firms can have professional, legal, or contractual duties related to site safety. Courts will not, however, hold design firms responsible for work-related injuries or deaths if firms (1) do not have contractual responsibility for site safety, (2) are not involved in construction activity, (3) do not assume site safety responsibility, or (4) act reasonably if an unsafe condition is identified.
Obligations Assumed by Contract
The responsibility for a job site accident may be placed on the design firm if it has contractual responsibility for actual supervision and control of the work. Standard contract forms, such as those published by the AIA and EJCDC, state that the contractor, who has control over the site and workers, has sole responsibility for safety programs and procedures. In litigation over an accident, the court will determine whether there is a sufficient connection between the design professional's contractual responsibilities and the condition and activities on the site that created the unreasonable risk of injury.
In addition to examining contractually imposed obligations and limitations, courts also look at the specific facts of a case. They evaluate whether a firm's constant participation in ongoing activities at the site and specific actions at the time of an accident constituted an assumption of responsibilities for safety practices.
Obligations Assumed by Conduct
U.S. case law articulates a professional duty that may prevail over a contractual provision to the contrary. Often, the question is whether the design professional had both the opportunity and ability to alleviate the risk of harm. Courts look at the awareness of the risk of harm in imposing a duty of care and then determine the reasonableness of the design professional's actions. Courts want to know if the risk of injury was foreseeable and whether the design professional had some element of control. If the design professional observed and recognized a dangerous situation or condition, there was a reasonable opportunity to take steps to help prevent injury.
How to Manage the Risks
An appropriate course of action when a dangerous situation is recognized is to address it in a written report, recording the date, the perceived unsafe conditions, and the name and position of the person on the site to whom notice was given. This notice should also be sent to the client, indicating that the unsafe condition is a breach of the contract for construction.
At times, however, it may be reasonable to take more direct action. Courts routinely determine that reasonable action to prevent an injury does not create an ongoing duty for site safety. If there is no contractual obligation, a design professional's duty to protect public health and safety suggests the following actions:
- If a condition not amounting to a clear and present danger is observed, it should be reported to the person most capable of remedying the situation,
- If the danger is more critical or recurring, could threaten the safety of adjacent areas, or indicates an inability of the contractor to meet contractual or legal requirements, it should be reported to the client (who retains the power to stop the work) and perhaps to government officials,
- If the danger is imminent, prudence and professionalism require immediate action.
Contract language, conduct during construction, and the design professional's duty to protect the public all can result in professional liability exposure. All of these require that the design professional understand the exposures and respond in a reasonable manner.
Statements concerning legal matters should be understood to be general observations based solely on our experience as risk consultants and may not be relied upon as legal advice, which we are not authorized to provide. All such matters should be reviewed with a qualified advisor.
Victor O. Schinnerer & Company Inc. is managing underwriter for the CNA/Schinnerer Professional Liability Insurance Program commended by NSPE/PEPP since 1957.
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Attend the Financial Management Roundtable
We invite Principals and CFO's to attend the NSPE/PEPP 2007 National CFO Roundtable, May 3–5 in Arlington, Virginia. Join us in a supportive learning environment that provides a valuable national forum for CFOs (and Principals) of A/E/C firms to network, benchmark current activities, identify trends, and discuss emerging issues.
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Young Engineers — We Need You
Each year, for the past five years, a group of NSPE members under 35 and working in private practice have joined together to create products and services for the good of PEPP and NSPE. This group has been generously funded to meet together and attend leadership and education sessions through PEPP. Work is continued on a regular basis through monthly conference calls.
If you are looking to meet your fellow PEPP Young Engineer members, network, and create products and service for NSPE, and if your employer is willing to support you in these endeavors, we've got just the spot for you.
To learn more about the group and the opportunities to get involved, contact Bobbi Claybrooke PEPP YEAC 2007-08 chair.
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Recognize Your Firm and Peers Through the PEPP Awards Program
PEPP presents several awards each year to recognize noteworthy contributions to the consulting engineering field. Members may nominate individuals and organizations for the following PEPP honors. The awards will be presented during the PEPP 50th Anniversary Gala at NSPE's Annual Meeting.
All nominations are due to the Awards Committee by April 30. The Awards Committee selects a winner with concurrence from the PEPP Executive Board.
The PEPP Award is given annually to an individual who has made an outstanding contribution to the advancement and recognition of the role of private practice in serving the public interest. Any individual, except a current PEPP officer or PEPP Awards Committee member, is eligible.
PEPP Professional Development Award
The PEPP Professional Development Award is presented to employers that exhibit exceptional career development initiatives and employment practices that advance the engineering profession.
Local chapters or state PEPP divisions may nominate candidates for the PEPP Professional Development Award. The PEPP Awards Committee selects the recipient(s) and any honorable mention recipients.
PEPP Merit Award
The PEPP Merit Award is presented to PEPP members serving in liaison functions or on joint activities, or to any other member who has made significant contributions to PEPP. In addition, the employer of a PEPP Merit Award recipient is recognized for the support the consulting engineering firm has given to the profession through the activities of the PEPP Merit Award recipient. The Awards Committee, with the concurrence of the PEPP Chair, may name as many PEPP Merit Award recipients as it feels are deserving of the honor.
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A Look at Limitation of Liability In Engineering Contracts
Professional engineers and engineering companies use a variety of risk management techniques in the rendering of their professional services. In recent years, one technique that has been used effectively in many cases is a limitation of liability clause in engineering professional services agreement.
As background, a limitation of liability clause in a contract with a client typically limits the liability of the engineering firm to all or some proportion of its fee, a specified dollar amount or the limits available under the engineer’s professional liability insurance. Courts have upheld the legality of limitation of liability provisions in many but not in all cases. Therefore consultation with an attorney in the jurisdiction in which the services are being rendered is always strongly recommended, since state law varies on the enforceability of limitation of liability provisions and is subject to change.
As a general rule, a limitation of liability clause entered into between parties with relatively equal bargaining position, reasonably and clearly drafted and acknowledged by both parties will be enforceable, unless there is a state law (statute or court decision) to the contrary, or it is determined that the enforcement of the limitation would be unconscionable (patently unfair to one side). Courts also often examine the specific wording of the limitation of liability clause to determine if the circumstance that resulted in the liability is covered by the clause. In other cases, the court will consider the level of knowledge, experience, and sophistication of the parties.
A significant factor regarding the enforceability of a limitation of liability provision is whether the provision was negotiated between two parties with relatively equal bargaining power. Success in negotiating a limitation of liability clause with a client depends on a number of factors. A preliminary recommended step is for the engineer to conduct an early discussion of risk allocation concepts with the client, noting that a significant portion of rewards of the project belongs with the project client and that as a relative matter, the engineering design fee is small in relation to the risk involved. The involvement of your professional liability broker and/or your attorney can sometimes be a good step in this process.
One frequently used approach during negotiations is to present a standard contract document (e.g., EJCDC Owner-Engineer Agreement) that includes a sample allocation of liability/limitation of liability exhibit. Once you have introduced the topic of limitation of liability and obtained preliminary agreement by the client to the concept, it is generally recommended that you discuss and decide on an equitable limit to your liability. One often used approach is to offer engineering services under one fee structure with a limitation of liability provision or under a different fee structure without the limitation of liability clause. Court decisions have demonstrated that offering this opportunity to a client is often an important point in a court’s decision to uphold the enforceability of the limitation of liability provision.
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