Session Efforts - AIA|WA Introduced Bill to Stop Unfair Contracts

In the past few years architects have been seeing onerous contract provisions from public clients. A common contract provision requires architects to indemnify and defend a client from any lawsuit related to a project. These provisions make the architect liable regardless of the reason for the lawsuit.
A top priority for AIA WA Council was to reform indemnification in public contracts. The AIA|WA did a good job getting a bill unanimously through the house. This bill is all about fairness and we need to continue to strategize its passage.”
Peter Rasmussen, FAIA, AIA|WA President

Recently, a Pierce County firm became a prime example of how indemnification provisions are damaging and costly. The firm was paid $8,000 to conduct a code review on a city project. The firm’s only involvement with the project was to confirm the building met code standards. A lawsuit was filed against the city three years later. The city forced the firm to pay for the cost its defense, even though the plaintiff never said the firm had done anything wrong. In the end, the firm spent over $300,000 on a legal defense in a suit that had nothing to do with them. None of the costs were covered by the firm’s insurance policy.

These indemnification provisions are unfair and uninsurable. Architect’s Errors and Omissions Insurance policies do not cover defense for the negligence or fault of others.

AIA|WA introduced a bill to stop these unfair contract clauses: Engrossed House Bill 1559 (EHB 1559). The bill would prohibit agencies from including excessively broad indemnification provisions in their contracts. EHB 1559 would limit liability for architects to damages “caused by the negligence, recklessness, or willful misconduct of the design professional.”
In short, design professionals will only be responsible for their errors and not held liable for mistakes made by contractors or others.

EHB 1559 passed the house unanimously, 98-0; but was ambushed by lawyers and lobbyists in the Senate. The first notice of any public agency opposition came just a few hours before the Senate hearing. After enduring a massive attack in the Senate public hearing, the AIA|WA and allies met with stakeholders to negotiate.

The AIA|WA brought three people to the meeting. Public agencies brought over 20 lawyers and lobbyists to browbeat supporters of EHB 1559; in order to protect their unfair actions they resorted to intimidation.

While EHB 1559 did not pass this year, the AIA|WA will push the bill again in 2012. During the next several months AIA|WA will meet with lawmakers and public agency lawyers to work through their resistance. Senators Adam Kline and Nick Harper have pledged to work with the AIA|WA during this process. In the House, Representatives Roger Goodman and Matt Shea are taking the lead to help AIA|WA find a resolution.

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