Better by Design
Engineer Professional Liability Concerns When Working with Clients

Engineers are increasingly facing the harsh litigious reality of the business world these days. More and more lawsuits get filed each year against design professionals of all types, and engineers are no exception. Clients file the majority of these suits, either with legitimate claims or shady plans of exploiting weak contracts.

The good news is that most of these client-driven lawsuits can easily be avoided or prevented if your engineering firm takes the proper precautions — and it might be simpler than you realize.

Implement Quality Control Standards

Implement Quality Control Standards

Many engineering firms cut costs to stay competitive, but in the process, they often get rid of necessary quality-control staff and policies to double-check design work. As a result, defects in the design or construction can lead to litigation that costs the firm more than was initially saved. (Related reading: "Insurance Considerations for Engineering / Construction Projects.")

It's true that no project will be absolutely perfect. Clients may expect perfection, but it's your responsibility as a licensed professional to educate them and manage their expectations. It's also your responsibility to make the best design decisions you can with the knowledge you have.

By maintaining strict quality-control guidelines, you can catch and fix issues before they become large-scale problems. Here are some quality control measures you can take:

  • Internally review calculations and designs by senior personnel knowledgeable in the field.
  • Hire outside design consultants to review the work if you don't have internal expertise.
  • Include quality-control costs in the budget and plan accordingly.
  • Educate the client on the reasons for the quality control costs.
  • Respond to client concerns immediately after the project is completed.

Remember that keeping open communicative channels can prevent problems from becoming lawsuits.

Use the Appropriate Contract Provisions

Use the Appropriate Contract Provisions

Having good business practices and ensuring quality work can prevent your firm from making unprofessional blunders, eliminating the threat of legitimate negligence lawsuits. But what about frivolous lawsuits? They can still cost a business thousands of dollars in attorney fees and take months (or longer) to resolve, even if the case has no merit.

To protect your business from becoming the target of such a lawsuit, strengthen your contracts to make it more difficult for dodgy lawyers to score an easy settlement. These provisions likely won't stave off legitimate claims, but the cost of hiring legal counsel to help you draft a strong contract can save you money in the long run.

Two provisions that may deter frivolous lawsuits are…

  • Certificate of merit clause. In some states, certificate of merit laws require potential plaintiffs to demonstrate that a case against a design professional has legal merit. Usually, a consultant or panel of experts in the professional's field will give their opinion on the matter. If they determine there is no merit, the case can be filed for summary judgment, a relatively quick and inexpensive way to settle a lawsuit. If there aren't certificate of merit laws in your jurisdiction, you can add one to your contract. In this case, it would only apply to the signing client — not any third-party.
  • Attorneys' fees clause. Frivolous lawsuits can still rack up attorneys' fees. An attorneys' fees clause states that the losing party in a lawsuit has to pay for both parties' legal expenses, making it risky for plaintiffs with a weak case to go against you. You could amend the clause to include cases that go to arbitration as well. This can backfire if you do end up liable for negligence. But quality control should prevent that.

Consult with your legal counsel before implementing these clauses, as every business might face different legal situations. But do consider reviewing your contracts for other weaknesses that may allow clients to bring a lawsuit against you. You'll want to pay special attention to the sections that outline your scope of services and limit your liabilities.

To learn more about how to use contracts, check out the article, "Contracts to Manage Engineers Professional Liability."

Professional Liability Insurance: A Failsafe for Your Engineering Business

Professional Liability Insurance: A Failsafe for Your Engineering Business

Though Professional Liability Insurance won't discourage lawsuits from happening, the policy can help cover legal costs if they do crop up. If your firm needs a Professional Liability policy or has other insurance needs, fill out an online application to get free quotes.

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