Liability Sharing or Transfer between Architecture and Engineering Design Professionals and Relevant Stakeholders

Abstract

A main concern for Architecture and Engineering (A/E) professionals is their high exposure to professional liabilities (PLs), which vary depending on their roles and responsibilities. There stems the significance of this research, which aims to provide a clear and comprehensive mapping of how such PLs may be transferred, in part or in full, to other project stakeholders. To this end, a multi-step methodology is adopted, starting with literature and case law reviews, to identify parties potentially implicated in liability splits and to delineate the instances under which such transfers may occur.

Contractors are at the forefront of parties who may share PLs traditionally assumed by A/E professionals. Module 1 investigates this allocation under prevalent project delivery approaches, including Design-Bid-Build (DBB), Construction Management at-Risk (CMAR), Design-Build (DB), and Integrated Project Delivery (IPD). The methodology involved: 1) a literature review and case law analysis of relevant judicial cases and legal principles to identify the instances where contractors may assume PLs, 2) the identification and synthesis of liability allocation classes (LACs) to systematically classify the rationales underlying the various liability sharing instances, 3) the development of qualitative liability split models (LSMs) to evaluate the full spectrum of possibilities for the PL apportionments, 4) the conceptualization of several constructs that delineate the potential sharing of PLs under the relevant PDMs, based on the proposed LACs and LSMs, and 5) a theorized relative apportionment of liabilities to offer an insightful comparison of potential liability splits both within and across PDMs. The findings revealed that the extent of liability sharing varies both within and across PDMs. Under DBB, contractors assumed PLs, fully or partially, in 16 of 19 identified schemes - an important shift from the traditional view that PLs are mainly assumed by A/E professionals or owners. In alternative PDMs, contractors were found to potentially share PLs across all schemes. Greater integration and collaboration within a PDM result in an increased contractor involvement in design and, consequently, a higher exposure to PLs.

Module 2 explores potential liability sharing between A/E designers and their reviewers. While reviews aim to reduce errors and risks, they can also blur liability boundaries, a gap this research addresses by: 1) analyzing relevant literature, legal principles, statutes, and standards, 2) synthesizing internal and external review types, highlighting their key attributes and objectives, 3) identifying the instances where reviewers may assume PLs under two prevalent review types, namely external third-party technical peer reviews and value engineering, 4) proposing liability allocation classes related to reviews (RLACs) and qualitative liability split models (RLSMs), and 5) elaborating constructs that delineate the potential PL sharing for the two review types investigated. For third-party technical peer reviews, findings suggest that reviews should not relieve designers from their design obligations and associated liabilities. However, reviewers may assume PLs if they operate beyond their review scope - by performing new original work or implementing their recommendations. Value engineers may also assume PLs, with their extent increasing as involvement deepens and proposal complexity and innovation grows.

Module 3 investigates knowledge exchanges (KE) among design professionals, intra-organization, inter-organizations, and through knowledge management systems (KMS). Two KE approaches are identified: project-specific exchanges that end with the project, and continuous sharing enabled by KMS, which retains and updates knowledge for future use. The methodology includes: 1) a real case study of a large, global consulting group to explore KE dynamics, 2) synthesis of KE dimensions and drivers, 3) classification of factors influencing KMS development in the A/E environment, 4) elaboration of a framework for an effective A/E KMS, and 5) a methodology to optimize KE. This module paves the way for future research on potential PL sharing in KE contexts.

This research study addresses the critical - yet underexplored - topic of liability sharing between A/E professionals and relevant stakeholders, offering a comprehensive perspective to support more informed risk management and reduce exposure to design-related professional liabilities.