Professional Liability/Risk Management: Documentation Practices
In suits alleging negligence in the performance of professional services, well-drafted documents and well-kept, comprehensive project records are the strongest defensive weapons available to professionals. The following practices and procedures can be vital to a firm’s continued profitability in the face of costly litigation.
- Put all agreements for the performance of services in writing, and state with particularity the scope of services, fees to be charged, each party’s responsibility to the other, and any responsibilities assumed by either party toward any person not a party to the contract for services; this includes creating written contractual arrangements with subconsultants. It is surprising how often design professionals enter into loose oral arrangements with professional consultants and subcontractors. The engineer or other prime professional is still responsible to the client for the services provided by these consultants, but the professionals’ responsibilities to each other are unclear and probably unenforceable.
- Avoid any statement that can imply that you have responsibility for the work of any entity that contracts directly with the client, and whose data and reports the client is obliged to supply to you. Do not accept or pay for reports which should be addressed to and paid for by the client. Write nothing indicating that such a person is your agent in the performance of their services, i.e., that you have any control or supervision over the client’s other consultants.
- Write nothing that implies that you have the right to hire, supervise, or discharge an on-site representative whom the client pays, unless you are obligated by contract to employ such a person at your own expense.
- Recognize that the courts treat all specifications emanating from your office to have been written by you, just as if you had written them all from scratch. Therefore, when issuing specifications, do not assemble under one cover the appropriate specifications with large masses of inappropriate forms. Careless use of form specifications may someday put you in the embarrassing position of explaining to a jury why the contractor should have adhered to the letter of certain specifications while no one expected the contractor to pay any attention to certain others. Be sure to issue only appropriate, self-explanatory specifications. Remember that, as the author of these documents, any ambiguity will be construed against you in court.
- Do not casually specify untested materials and methods. Request in writing the representations, guarantees, and warranties of any manufacturer or vendor, and otherwise document your investigation and exercise of judgment in using such information.
- Provide the client with necessary information to allow a decision indicating informed consent. Present to the client in writing the advantages, disadvantages, and estimated costs of each alternative, and obtain the client’s decision in writing.
- Document the client’s decision on bonds and insurance. If the client elects, for reasons of its own, not to require surety, to require only specific insurance coverages, or not to avail itself of any other safeguard, affirm the client’s election in writing.
- Document the transmittal of plans, revised plans, and project information to consultants.
- Notify the client in writing of any recognized increases in cost estimates and the reasons behind them, and obtain the client’s written agreement to proceed.
- Keep a record of all visits to the site. At a minimum, record the date, the time of day, and the work in progress. Good judgment might call for the recording of additional details. Thus, when asked what you did to protect the client from deficiencies in the work of the contractor, you can speak in specifics rather than generalities. Usually, for lack of any evidence of error in design, plaintiffs will contend that the engineer failed in a duty to supervise, inspect, or test the work of the contractor, and therefore failed to observe its noncompliance with the plans and specifications. Be sure that the contract with the client clearly states the extent and limits of your construction-phase responsibilities, and that the client understands them at the project’s inception.
- Notify the client and contractor in writing, with supporting detail, of your rejection of any work or materials when more than trivial cost is involved.
- Withdraw, in writing, any approval previously given of work thereafter rejected.
- Put in writing any recommendation which you make to the client regarding a matter of serious consequence, and obtain, if possible, the client’s written response.
- Communicate in writing to the client, your consultants, and the contractor any newly discovered fact that might call for a change in the plans, specifications, and project costs.
- Put in writing your directions to the contractor concerning the performance or nonperformance of work which is essential to substantial completion of the project when, in your opinion, the work or progress is not in compliance with the contract.
- Invite, in writing, the participation of the client in final inspections.
- Request, in writing, from each of your consultants, written acknowledgment of payment in full for their services.
- Obtain the client’s written acceptance of the work as substantially completed.
- Make a written memorandum of any telephone conversation and conference in which matters of more than passing importance are discussed, information imparted, or directions given.
- Confirm, in writing, decisions reached in the course of conversations and conferences.
- Remember that your writing may someday fall under the eyes of the litigious, the professionally knowledgeable, a jury of nonprofessionals, or a judge who is a layperson. The technical language of an engineer or other design professional should leave no room for misinterpretation by any member of the same profession called upon to act upon it or explain it to a nonprofessional. Nontechnical language should be clear to any reasonably intelligent layperson.
- Keep in good order only one set of relevant project information—including all contracts, plans, specifications, correspondence, reports, and memoranda—and follow a consistent policy for record management and storage. In most cases, it is wise to maintain records for at least as long as any applicable statute of repose.
BenefitsTo have to “put it in writing” will cause you to stop and think. Thus, there will be tangible evidence of your thought and work in the event of any claim or controversy. By law, you are held to the only reasonable standard of care—the exercise of professional judgment in conformance with the standards of an ordinarily careful and capable practitioner facing similar situations. As long as this standard is met, you are not negligent, even if hindsight reveals that you made a mistake. In the event you are drawn into a lawsuit, those writings are likely to be admissible evidence as proof of what was said and done, even when those who participated either cannot remember, seek to misrepresent the facts, cannot be found, or have died.
© 2012, Victor O. Schinnerer & Co. Inc. 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 & Co. Inc. is managing underwriter for the Schinnerer and CNA Professional Liability Insurance Program, commended by NSPE/PEPP since 1957.
Happenings on the Hill
Final Drilling Safety Rule Requires Extensive PE Oversight
NSPE achieved a victory when the Department of the Interior's Bureau of Safety and Environmental Enforcement issued a final rule that makes permanent the additional safety measures authorized in the wake of the 2010 BP oil spill. The rule requires professional engineers to be more involved in the design and certification of offshore oil wells. NSPE General Counsel Arthur Schwartz commented before the Chemical Safety Board in 2010 that professional engineers should supervise all engineering design, operations, and maintenance of offshore oil wells.
Specifically, the new rule stipulates that:
- PEs must be involved in the well casing and cementing design process;
- PEs must certify that well casings and cementing are appropriate for expected wellbore conditions;
- PEs must certify well abandonment designs and procedures; and
- PEs must certify that well designs include two independent barriers in the center wellbore and all annuli.
The rule also requires independent third parties to conduct blowout preventer inspections. These third parties must be licensed professional engineers, professional engineering firms, or technical classification societies. [ return to top ]
NSPE Fall 2012 Web Seminar Line Up
This Fall, NSPE brings a wide selection of new and live online
education opportunities. Each session is sold per connection, allowing
your collegues to join you. These sessions offer outstanding value. Don't hesitate to earn your PDHs, sign up for one of our online sessions
Professional Risks: Construction Delivery Methodologies, Sustainable
Design, Cases of National Interest, and Other Real and Potential New
October 9, 2012, 12:30 p.m.–1:30 p.m. (EDT), 1 PDH
New construction delivery methodologies like integrated project
delivery and other hybrid contracting techniques continue to evolve,
potentially or in fact implicating liabilities, professional
responsibility, and the applicable standard of care. Similarly,
sustainable design continues to test capabilities of new materials and
systems, creating risk. These risks and others can be tempered or
exacerbated by the courts. These topics and more will be discussed
during the seminar.
Leadership: What Matters Most
October 11, 2012, 12:30 p.m.–1:30 p.m. (EDT), 1 PDH
Providing effective leadership can be a daunting challenge. So
there’s value in getting back to the basics of how leaders increase
their impact. In this webinar, we’ll concentrate on three issues:
people, attention, time. Not the list you expected? Join our webinar to
learn why these issues matter most.
Engineering Ethics: Technical Issues
October 24, 2012, 12:30 p.m.–1:30 p.m. (EDT), 1 PDH
This session will examine a variety of issues including codes and
standards, expert witness testimony, patents, preparation of technical
proposals, use of technology, and other issues. Participants will have
the opportunity to offer comments, pose questions, and participate in
interactive polling surveys.
Ethics and Sustainable Development
October 30, 2012, 12:30 p.m.–1:30 p.m. (EDT), 1 PDH
Sustainable development involves the simultaneous pursuit of economic
prosperity, environmental quality, and social equity. In this webinar,
Carlos Bertha will unpack what this means from a moral perspective. Is
it possible for an engineering venture to remain profitable and still be
environmentally and socially responsible? Is it ethical for such a
venture not to expand its “bottom line” this way? Carlos will use a
variety of examples to show that sometimes the problem isn’t as simple
as it sounds. As a special case, he will discuss how his experiences as a
resident engineer in Afghanistan shaped his perspective on sustainable
These are just some of the courses NSPE has to offer. For full course listings, visit our website. [ return to top ]
COFPAES Federal Markets Conference
Want a snapshot of upcoming federal contracting opportunities? Join the Council on Federal Procurement of Architectural and Engineering Services for
its Federal Markets Conference on Thursday, October 12, from 8:30 a.m. to 4:15 p.m. at the American Institute of Architects, 1735 New York
Avenue, NW, Washington, DC 20006.
NSPE is a member organization of COFPAES. A $50 registration discount is provided to NSPE members.
Designed for principals, owners, and
partners of A/E firms and marketing and business development executives,
this one-day event will give you the opportunity to engage with top
officials from key federal agencies as they discuss their program budgets and present upcoming projects and procurement opportunities for
architectural, engineering, surveying, and mapping services.
Past conferences have featured the General
Services Administration, Bureau of Land Management, Bureau of Prisons,
U.S. Air Force, U.S. Customs and Border Protection, U.S. Army Corps of
Engineers, Naval Facilities Engineering Command, Federal Highway
Administration, State Department Bureau of Overseas Buildings Operations,
U.S. Agency for International Development, and Millennium Challenge
Corp. COFPAES is assembling a similar line-up this year, so
Registration for COFPAES organization members (AIA, ASCE, MAPPS, NSPE, or NSPS) is $195. The cost for nonmembers is $245.
Click here to view the preliminary agenda and register.
[ return to top ]
Become a 2013 PEPP Sustaining Firm
Now through October 31, get 10% off the price of becoming a 2013 PEPP Sustaining Firm
and ensure your firm is listed in PEPP’s online searchable directory.
Your support is needed for the efforts of the Professional Engineers in
Private Practice (PEPP) as we strive to promote the hard-earned
professional engineer designation and enhance the image of the PE
in private practice.
As a 2013 PEPP Sustaining Firm, you will receive the following benefits:
- Online exposure: You’ll be included in a searchable
directory that includes a complete description of your firm’s
specialties. NSPE’s Web site receives more than 75,000 user sessions per
month. Let owners and other customers and partners find you! All PEPP
Sustaining Firms are listed at: www.nspe.org/PEPP/Supporters
- Recognition: Listing in an issue of NSPE’s PE magazine
(circulation is approximately 40,000) and in PEPP Talk, the monthly electronic
newsletter you're reading that is sent to more than 11,000 PEPP members.
- Valuable discounts: 25% discount on ads in PE magazine, monthly e-newsletter NSPE Update, Web banners, and Job Board postings.
Your options to participate include the following (*Price reflects 10% discount for payments received by 10/31/12).
Bronze Level $153* (regularly $170) Listing only. Includes listing and link to firm’s Web site and e-mail address.
- Silver Level $216* (regularly $240) Listing plus Facebook and Twitter.
Includes Bronze level package plus companies can provide a
non-self-promotional tip of the day (250 words or less) to be featured
on the NSPE Facebook page and Twitter page, with a direct link to your
firm’s Web site and/or social media platform. E-mail tip (.gif or .jpg
file, up to 10KB) to firstname.lastname@example.org (703-684-2833).
- Gold Level $517* (regularly $575) PEPP Featured Firm package.
Includes Silver level package plus complimentary registration ($495
value) to the 2013 Synergy HR & Finance Roundtable in Alexandria,
Please complete the form
and MAIL or FAX them back today! Your participation will not only help
you reach potential clients and partners, it will also provide valuable
support for our industry and profession. Please visit www.nspe.org/PEPP for a complete list of PEPP programs. [ return to top ]
NSPE Seeks New Faces of Engineering
The New Faces of Engineering strives to promote the accomplishments of young engineers by highlighting their engineering contributions and the resulting impact on society. The campaign is designed to enhance and improve the image of engineering by:
- Putting faces to what has often been referred to as "the stealth profession";
- Showing a group of young, diverse and talented engineers, thereby portraying engineering as an exciting profession open to everyone;
- Providing both stimulation and incentive for college engineering students to explore the variety of career options available to them with their engineering degrees as well as encouraging high school students to study engineering in college.
- Help engineering students understand they are part of a global profession.
To submit an application, click here. [ return to top ]