In 2024, AIAO will again partner with ACEC (Council of Engineers) in an attempt to pass Duty to Defend legislation in Oregon and WE NEED YOUR HELP!
THIS IS A DETAILED CALL TO ACTION FROM YOUR LEGISLATIVE ACTION COMMITTEE- PLEASE TAKE THE TIME TO READ IT!
Oregon professional service contracts often require design professionals including architects to defend others for legal claims or damages even though the design professional is not responsible. This “duty to defend” language in many public contracts is legally problematic, expensive and a barrier to entry for many small, emerging, women and minority owned businesses, and is uninsurable by professional liability insurance carriers.
This limited professional liability insurance availability leaves Oregon’s design professionals stuck in an untenable situation with no way to protect themselves other than to assume the risk and hope for the best or forgo designing projects. Often, design firms do make the tough decision to walk away from contracts because of these Duty to Defend requirements. When designers are compelled to sign these agreements, they are committing their business assets to pay these costs, regardless of fault.
In our proposed solution, architects and engineers cannot be made to “defend” an owner or any other party against claims asserted by a third party. Our legislation will remove the contractual risk of design firms spending huge sums to defend against third-party claims unless the liability or fault of the designer is first established. Upon a determination that the designer was negligent, the damages caused by that negligence, including the owner’s or another party’s attorneys’ fees and costs, can then be paid by the designer’s professional liability insurer.
This isn’t about shirking responsibility – architects will pay their share - it’s about ensuring fairness, Fairness means everyone is paying their own way before a decision on liability and then each party is responsible for their own negligence or fault - parties pay damages based on the actual liability, rather than mere alleged liability. Fairness also means ensuring all parties are able to purchase the proper insurance. This is not the case today and results in high-risk contract provisions that are unreasonable and uninsurable. Fairness also means allowing all design companies, small and large, to compete on an even playing field. This is not the case now as the contractually imposed duty to defend is a major prohibitive factor for many emerging, women and minority owned businesses considering construction projects.
WHAT WE NEED FROM YOU RIGHT NOW
We need to know what legislators represent you! We may ask you to communicate with them and we will provide you with all the information you need to individualize a message and simply sign and send an email. Please help us fill out our contacts spreadsheet by telling us who the Oregon Representative & Senator are for your home address and you firm address – you can quickly find that out here.
Do you have any anecdotal information about you or your firm being impacted by a duty to defend clause in a potential contract? This could be as simple as you do not go after public projects because of these clauses, or you had to turn away from a contract where you were the chosen proposer because of the clause, or you had to spend time negotiating such a clause out, or you have agreed to a contract with a duty to defend clause and how that impacted you. In conjunction with that, do you have a contract with the language you would share?
Has your insurer provided you with any direction or information about duty to defend clauses and limitations to your professional liability? Please contact us!
WE ARE SO THANKFUL FOR YOUR WILLINGNESS TO HELP – and if you belong to any groups that you think might be interested in helping us by simply adding a logo, please let us know - the issue affects not just those individuals and associations in the built environment, but also small, emerging, women and minority owned business coalitions and those concerned about increased development and litigation costs.
THANK YOU IN ADVANCE FOR YOUR HELP. PLEASE REPLY DIRECTLY TO THE AIA OREGON CHAPTER CONTRACT LOBBYIST, CINDY ROBERT.