The Design Liability Hot Potato: The Spectrum Between Collaboration and Delegated Design Thumbnail

The Design Liability Hot Potato: The Spectrum Between Collaboration and Delegated Design

The Benefits of Collaboration
In today’s construction industry, it is no secret that there is always increasing pressure to speed up schedules and to keep costs down. One key factor that can help achieve these goals is to increase the coordination between the various stakeholders in the project so that all parties -  owner, designer, contractor, and specialty subcontractors - can contribute their expertise and advice at appropriate times during the project. This collaboration can head off conflicts early, vet the best ideas on how to achieve a desired solution,  and helps aid in the sharing of ever evolving specialty knowledge that a single person, firm or industry may struggle to keep abreast of. When multiple parties work together in harmony to achieve a goal it can significantly improve the accuracy and completeness of a design, leading to a shorter schedule and lower costs.

The Risks of Collaboration
Unless the parties are paying close attention, however, this process can also blur the lines between who has ultimate responsibility if a design ends up failing and the owner is looking for someone to blame. A contractor may end up being wholly or partially liable for design defects rather than the architect if they have assumed that responsibility either expressly by contract, or impliedly by performance. And an architect may find that they are liable for design decisions made by another party if they have not successfully clarified the limits of where their professional services end and that of others begins.

The Normal Process During Design
Consider a scenario where an architectural and engineering professional services firm is designing a manufacturing facility where one of the Owner’s requirements is that the offensive smells generated by the manufacturing process are not detectable outside the building. The A/E firm may determine a highly specialized ventilation system is required. The A/E team may have discussions with the manufacturer and/or supplier of such specialized equipment, and may coordinate with the selected contractor or a  specialized subcontractor during the design process in an effort to better understand how to specify and design such a system. This scenario would be an example of routine informal involvement of the design, construction, and supply teams to each lend their advice regarding the design intent. But in the end, the design choices and ultimate design liability would rest with the AE team, who, while they consulted with experts, were the party charged with understanding the input provided by others and adequately incorporating their suggestions into an effective design.

The Spectrum of Consultation or Collaboration During Design
But what if the project was utilizing a Construction Manager who has been engaged by the Owner to provide pre-construction services, including review of the design as it progresses? What if the Owner is paying the CM to provide advice on the design of the ventilation system, and the CM has far more experience with installing such systems than the AE team has designing such systems? If the CM provides advice to the AE team during the design development stage, and such advice is supported by the Owner and incorporated by the AE into the design, is the AE off the hook if aspects of the design fail to meet requirements? Probably not. While the CM’s involvement here is a bit more formal, there is still no formal agreement between any of the parties where the AE firm’s ultimate professional liability for design compliance is shifted to the CM, or even lessened because the design team listened to, or even relied on, the CM’s input -- even if everyone agrees the CM’s advice seemed entirely reasonable. Absent clear contract language agreed to by all parties, this “Design Assist” structure does not result in a shifting of responsibility, but only a more formal recognition of the potential benefits of advice from other experienced parties. The AE team still retains the professional responsibility to analyze and incorporate the input from others solely as they determine is correct.

Continuing on the Spectrum – Delegated Design
What if the AE team took all the CM and supplier input under advisement, and then prepared specifications setting forth the ventilation and odor reduction performance metrics the system had to meet, leaving the ultimate selection of exact equipment and potentially proprietary design elements to the CM and its suppliers and subcontractors? This scenario moves towards a “Delegated Design” structure and the AE should insist on clear contractual language where everyone agrees the AE team is determining “what” has to be built, but the CM team is determining exactly “how” those criteria are met. The AE may consider requiring that the ultimate system design be stamped by the actual professional engineers responsible for the detailed design, and that the specialized design team assume responsibility for system conformance. Conversely, the CM and its consultants must be vigilant that they are not inadvertently assuming design liability that they did not intend to, or that are not getting paid for, or worst, for which they are not insured.

Avoid Implied Liability – Document in Advance
All of the above scenarios are completely legitimate ways to structure the design of specialized equipment, and, when done correctly, the project can realize great benefits from getting early and specialized input as to how to solve a particular issue. This can have far better results than just hoping the AE team did their best with a new concept on their first try and then dealing with constructability, cost, or scheduling issues raised after the design is complete. But the above scenarios will only be successful if all involved parties are clearly discussing where the lines are drawn, who will be responsible for what, and then ensuring those agreements are captured in a clearly written contract with similar language in the contracts binding the various parties. Furthermore, the parties should ensure that if someone is undertaking design liability, that they are carrying adequate design professional liability insurance coverage.

Whether you are an owner, design professional, contractor, or specialty equipment manufacturer, you must always be aware that while there are benefits to having many experienced cooks in the kitchen all helping out, the parties will need written clarity as to who the hot potato of design liability rests with on each aspect of shared design.

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