Category: Engagement, Clients & Fees

Non-Standard Terms Of Engagement (2).

Non-Standard Terms Of Engagement (2).

Use NZIA/AAS or CCCS terms

The short point is:  the NZIA or CCCS terms are “neutral” and built up from many years of experience in projects of all types and sizes, so you should be VERY AFRAID of attempts by others to reinvent the wheel, with the prospect of unexpected and potentially unwelcome outcomes.

The frequency with which clients dream up new terms of engagement is wearying, and often unnecessary.  The NZIA suite of AAS, and the CCCS, are well-accepted engagement terms for architects which apply to all but a few projects.  They are the product of wide and knowledgeable input, written in the mutual interests of architect and client, based on verified legal interpretation and case law, insurable, and flexible enough to deal with most issues. 

Some clients or projects will have special requirements, but these should be accommodated by specific terms, rather than specific contracts.  Wherever possible, you should object to clients attempting to impose their own creations which may later create uncertainty as to meaning and insurability.  Both NZIA and NZACS (with input from Aon) are able to provide general non-legal advice, and an appraisal of insurability;  but non-standard terms of engagement are a commercial and legal matter, and you should take legal advice accordingly. The separate article “Non-Standard Terms of Agreements (1)” provides some guidance on the words and terms which may be problematic.

For several years – and ongoing – government departments and larger local authorities have developed agreed terms with professional bodies including NZIA, NZACS, IPENZ, ACENZ and others.  There is a strong move within government to achieve consensus and coherence, and support for the use of CCCS, even acknowledging some particular (government or local body) needs which are not present in the commercial world.  NZIA is keen that the AAS scope schedules are also adopted.  We expect this effort to prevail, but meanwhile some clients just don’t “get it”.

2020 Government Model contracts

MBIE’s website states (Feb 2021):  These contract templates are not intended for construction, ICT or social services related contracts because they are generally not low risk or lower value.

The GMC is intended for products and supply rather than professional services contracts, which have different needs and requirements. We understand that when MBIE refers to construction, they include architectural and engineering design.

Engagement as a subcontractor, or under NZS3910

DO NOT sign up for a project on the basis of being a party to a construction contract or a supply contract or a purchase order. 

BEWARE of being trapped into the situation of being a subcontractor (or sub-consultant) to a design-build contractor.  They are known for spreading risk across their subbies:  this may come in the form of a grandfather clause which overtakes the usual and acceptable terms of a professional services contract.

NZS3910 (or a variant of it) is NOT an appropriate contract for professional services, and exposes an architect to the risk of PI cover not responding in the event of a claim.

Housing NZ

A recent enquiry to Aon from a member was in relation to a Housing NZ project, where HNZ was seeking a statement that “  …. XXXX Architects:

(1) warrants to HNZ that all work will be carried out in a good, professional and workmanlike manner (and in accordance with the provisions of the Contract) ; 

(2) will be required to repair all defects in their works; make good and indemnify HNZ for all direct losses to the works arising from any defect in their works; 

(3) will carry out any repair work for which they are liable under the warranty.

(4) if they do not do so within 14 days after receiving notice by HNZ, then HNZ may undertake the work and recover all costs;  

(5) indemnifies and holds HNZ harmless for any costs, claims, liabilities etc for which HNZ may become liable arising from failure by the architect.”

This wording was all in relation to a Subcontractor Deed of Warranty sought from the Architect.  It is not appropriate to a professional services contract;  it is likely to impose terms and conditions beyond those covered by the PI policy. 

When contract terms shift the risks and responsibilities

When contract terms shift the risks and responsibilities

The majority of respondents to a 2018 survey by Russell McVeagh lawyers in our industry thought that there had been more disputes over the past two years, and it would get worse in the next two.  That prognosis was more strongly reflected in responses from contractors than from principals.  The survey cited those trends arising out of skill shortages, risk allocation and contract terms.  To that should be added poor communication and lack of comprehension. 

Other recent media reports have highlighted the problems arising when contract terms shift the risks and responsibilities from where they might reasonably fall.  Some government procurement bodies and large developers are doing – at a larger scale – what homeowners often do through a lack of understanding:  assuming that in appointing an architect (or a contractor) they will devolve all risk onto them. 

Stick with NZIA conditions of engagement and contract terms if you can!  It is the NZACS experience that cost savings in consulting fees or truncated services bear an inverse relationship to the potential for later disputes.  Designers are not motivated to provide thorough documentation at punitive fees, and an underpaid contractor is less likely to provide glowing performance.  The designer’s absence from the construction phase seems to result in less documentation (when really it may require more) and contractors are at increased risk if the documentation is not adequate, or is adequate but not understood. 

The principal may assume that contract observation and administration by the designer is a waste of money.  Then, when it proves it was needed, their view is that the design documentation was deficient.  The time to resolve problems is usually as soon as the information is available to do so, but in such cases the contractor is reluctant to call in the designer because that would end up costing him and/or the principal money.  So the problem festers, and probably escalates. 

In the alternative, if the designer is involved in contract administration, the uniformed principal conflates the role with contract management, and the contractor’s defaults become the designer’s failures.

Yes of course NZACS members already know all this!  But what is routine for us is not routine for our clients:  prudent risk management requires us to think about things from their perspective, and to communicate with them in such a way that the designer’s – and the contractor’s – risks and interests are recognised and accommodated.

Free advice

Free advice

A recent case in Britain highlights the risks associated with giving free advice.  It is very tempting to be casual in arrangements with friends or with the club where you are a member, but in the case of Burgess vs Lejonvan, architect Lejonvan got dragged into rather prolonged legal action over some apparently innocuous landscape design done for free. 

Without going into the details of the case the lessons are as follows:

  • The absence of a formal written agreement does not mean that a professional duty of care (in tort) doesn’t exist.  It’s worth noting that in a similar situation in New Zealand, if you are a registered architect, you could also face a complaint to the NZRAB for failure to observe rule 58A of the Code of Ethics.
  • Even if no fee is paid, you are considered to be providing professional services and so are bound to the same standards of exercising reasonable skill and care as if you were being paid.

So…what should you do in such a situation?  Well it is always advisable to document your terms of engagement – particularly in the context of the NZRAB Code of Ethics.  If you are asked to provide advice or an opinion outside of a work situation be clear that any views/opinions you provide are not in a professional capacity and that they cannot be relied upon.

Besides, based on recent figures of fee incomes in our profession, where is the justification to undervalue our services by doing free work at all?

Engagement Terms: Sign Before Design.

Engagement Terms:  Sign Before Design.

Is it enough to incorporate engagement terms by reference in a covering letter?   Or to send the terms and start on the design in the expectation that they will be agreed?

The answer is yes and no.  But when it comes to the crunch, no.

Alas, many is the time that the designer has dutifully sent the client the terms of engagement and started on the design, only to find out months or years later that the terms were never actually signed and returned. 

NZACS has had many claims where “everyone understood the terms of engagement” until it came to the point where there was some mileage for one of the parties (usually the client) to question what was actually agreed.

As for lots of building and construction issues, the devil is in the details!

If you write to the client and say that your terms of engagement are the standard NZIA terms, and they reply (similarly vaguely) “good, go ahead”, then you might succeed in establishing that you were proceeding on their instructions, and the times you spent are billable. If the client pays your first invoice, you would be on firmer ground yet.  But when something goes wrong, your client (now aided by their astute lawyer) will – in the absence of signed agreed terms – find something to cast doubt on what the ACTUAL terms of engagement were. Even if you included those terms for them to read, they may not do so, and later claim that the terms you are relying upon are onerous and thus unenforceable.

Unless the client has signed and returned the terms of the service contract, there will be doubts about the rights, obligations, and scope of the contract.  Ideally, you should then countersign and return the contract to them by way of confirmation. 

If the client does not respond as or when expected, you may have to make a “commercial decision” whether to move on to the job or wait.  Clearly if you proceed, you will be at risk.  At the very least you should advise in writing that the terms as proposed are understood to have been agreed by default unless the client promptly objects; and/or are taken to have been agreed by payment of a fee invoice.  Follow up with an invoice as soon as you reasonably can!  If it comes to a dispute, you will need some means by which you can verify that the client received, and had the opportunity to respond to such communications.

There are some provisions in the AAS which are not intuitive, and therefore would be open to debate if the client had not specifically agreed to them: 

Copyright:  In the absence of the AAS, clients would assert that “they have paid for the plans”, and this gives rise to two recurring claims. Firstly that the client has an absolute right to all the graphic written and digital documentation created by the architect;  secondly that the architect does not have the right to re-use that documentation elsewhere. 

Liability:  AAS does its best to ring-fence and define liability exposure.  The provisions are the result of experience and legal understandings usually well beyond that of individual architects or clients (and many lawyers!).

Scope:  Defining and describing the scope of the contract is a fundamental requirement.  You and your client must have a common understanding of the intent of the design, observation, and contract administration tasks, or at least an agreement on how to deal with the absence of such descriptions. 

Construction Contracts Act:  An uninformed client may be unaware of the perils of ignoring a properly served CCA Payment Claim.

Registered Architects face an additional hurdle in the light of the January 2018 changes to the NZRAB ethics.  These appear to ignore the reality that common business practice and marketing may require significant work ahead of actually securing a commission.  Or that work must necessarily proceed despite a tardy response from the client.  Or that work may proceed in parallel with negotiations around the terms of appointment, especially if the scope of work or the “client” changes during the project.  Speculative work is done with the knowledge and acceptance of the commercial risks, but the new provisions add the prospect of an ethical risk which might be exploited by an energised complainant.

Maybe we have to be optimists:  but too often the enthusiasm generated by a new job can cloud rational thinking.  Perhaps engineers are less optimistic and more rational:  they seem to grasp the importance of getting signed up before they act.  We should too!!!

Copyright in Architecture

Copyright in Architecture

Claim notifications involving copyright matters

Ownership of copyright has arisen in claim notifications.  It is apparent that some architects do not appreciate the subtleties of it, and it is not fully addressed in NZIA Practice Note (PN 6.101).    

This paper provides an overview of copyright for architects.

Protection of literary and artistic work existed in Britain and Europe since the mid-18th Century and was adopted internationally by the signatories of the Berne Convention of 1886.  It has been expanded and developed by many countries, particularly in response to digital communication.

The NZ Copyright Act 1994 superseded earlier legislation and was introduced to align with copyright legislation in countries that were then about to enter the TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights).  It provided recognition of copyright ownership and ensured that copyrighted material in one country could not be imported or transmitted to another.  This was particularly relevant for the digital transfer of films, music and computer software programmes.  

Copyright protection extends to expressions and not to ideas, procedures, methods of operation or mathematical concepts.

Copyright:

The NZ Copyright Act 1994 covers intellectual property rights and controls in respect of copying, publication, transmitting, archiving, and educational use of literary, dramatic, musical and artistic works, sound recordings, films, communication works, computer programs and the typographical arrangement of published editions.  

The provisions relevant to architects are included within the description of literary works and artistic works which includes graphic works (painting, drawing, diagram, map, chart or plan) or models, irrespective of their artistic quality;  architecture and buildings is a sub-set of artistic work .

Architectural copyright

The following brief outline is related to architectural copyright in the broadest context and will include the nature of copyright protection as envisioned in NZIA AAS.

General Rules: The author of copyright is the person who creates the work which is the subject of copyright.  The author may be a natural person or a body corporate.  In some circumstances, there can be joint authorship.  The author is the first owner of the copyright interest.

When a copyright author is an employee, the first copyright owner is their employer.  When a person pays, or agrees to pay, for the copyright work, that person is the first copyright owner.

Copyright ownership can be assigned or sold as a property right, but the transfer is not effective unless it is confirmed in writing and signed by or on behalf of the copyright owner.

Many architects appear to believe that, as a matter of principle, they have the copyright ownership of their plans and/or designs.  This is a false premise in the first instance; the design documentation belongs to the client who commissioned the work.  The escape route for architects lies in the written assignment opportunity and this is provided for within the NZIA AAS, wherein the client agrees to transfer their copyright ownership to the architect, who in exchange provides contractual consideration and provides to the client a license to utilise the copyrighted work for their intended purpose.  This NZIA copyright ownership is not effective unless the AAS, which defines the assignment relationship, is signed by or on behalf of the client.  Without this signed agreement, or similar signed agreement, the first design copyright owner is the client.  Furthermore, the transfer of copyright ownership is not conditional upon the execution of payment, but rather the agreement to pay for the design copyright.  (As an aside, the ADNZ agreement for services provides for the designer and client to share joint ownership of the design copyright, which shall only become effective upon satisfactory payment of their agreed fee.)

Copyright protection exists for 50 years following the death of the author and is subject to the laws of survivorship.  Copyright is infringed if the work is copied and/or transmitted without the copyright owner’s consent.  In cases of alleged infringement of copyright, the Act provides a right for a copyright owner to initiate legal proceedings to recover damages, seek an injunction or any similar property rights and remedies.  But this is not without reliable evidence and legal argument and creditable defence.

In legal proceedings, an architect will need to establish that he or she is the current copyright owner of the architectural design drawing.  To this end, it is helpful to have a statement relating to the copyright ownership incorporated in the plans or drawings belongs to the architect.  This statement (or a recognised copyright symbol consisting of the letter “c” enclosed within a circle) will be sufficient to put the infringing copyist on notice of the existence of copyright.  If this precondition is fulfilled, then a prime facie case of copyright ownership will have been established.  This will enable a copyright owner to seek legal recovery upon adequate proof, of damages or other appropriate property relief.  If it is proved or admitted that the defendant did not know and had no reason to believe that copyright existed in the work which is the subject of the proceedings, then the plaintiff is not entitled to damages, but is only entitled to an account for profits.  In respect of a building under construction, no injunction order to prevent building completion, nor to require the demolition of a partly constructed building, may be made after the construction of a building has begun.

Copyright infringement litigation will generally benefit from the presentation of expert witness evidence which should clearly indicate the nature and reasoned extent of artistic or architectural infringement and may identify similarities and differences of copyrighted features for comparison purposes.  Because of litigation risk and costs, architectural copyright infringement allegations are settled confidentially by negotiation.  It is an offence against the Act to claim copyright when you are not the copyright owner.

It is possible for two or more separate individuals to independently come to a similar design solution this may not amount to a breach of copyright.  This is particularly apparent in an architectural work which was required to satisfy a similar design brief on a similar sized site with similar constraining features and similar planning constraints or covenanted conditions which limit the form, style and cladding materials.  However, if the plaintiff’s evidence can establish that a defendant had access to the copyrighted plans or building, then this may support a claim for infringement of copyright.  The definition of building includes any fixed structure and a part of a building or fixed structure.

It is not uncommon for more than one architect to be involved in different aspects of a building design. In such cases there may be an overlap of copyright ownership interests.  This should be carefully considered by each architect to ensure that their respective claim for moral copyright is clearly defined and that any promotional material clearly reflects their respective interests in a manner which doesn’t contravene the NZRAB Rules, particularly Rule 46 Uphold the law (including copyright); 47 Honesty and Fairness; and 57 Reputation.  If an architect is commissioned to undertake alterations to another architect’s designed building, then it would be prudent to advise the original author who retains the moral copyright, so that the author may have an opportunity to photograph the original work before it is altered.

Derogatory treatment:  The Act prohibits the derogatory treatment of an artistic work.  Under a similarly worded Australian Copyright Act, Harry Seidler is said to have objected to the placement of a distinctive advertising sign for a Pig’n’Whistle Traditional English Pub tenancy within a Riverside building project in Brisbane.  Mr Seidler litigated, but settled out of court in a confidential document which allegedly required Pig’n’Whistle to acknowledge that Mr Seidler had nothing to do with the design of the neon pig sign that was attached to his Riverside development building.

Case Studies

Copyright infringement in NZ was considered in Beazley Homes Ltd v Arrowsmith [1978] 1 NZLR 394 (HC).  The plaintiff was a group builder who provided a range of plans for low cost houses for their customer’s selection and subsequent purchase of the built house.  The defendant operated a similar styled business for its customers.  Beazley alleged that three houses built by Arrowsmith were copied from their stock plans and sought relief in the form of injunction, damages and delivery up of the copied plans.  Evidence was produced that Arrowsmith had access to and had copied the Beazley plan.  The case was decided according to the earlier 1962 Copyright Act which was less prescriptive than the current Act.  The Court held that Arrowsmith infringed the architectural copyright owned by Beazley and issued an order for injunctions and associated relief.

A much publicised and apparent blatant breach of architectural copyright occurred with the construction in Chongqing of a copy of Zaha Hadid Architects Wangjing SOHO project in Beijing.  China, however, does not appear to recognise copyright infringement as effectively as do recognised countries in the TRIPS Agreement.  ZHA and their client decided not to pursue for infringement of copyright for unrelated commercial reasons; they wanted their building completed first.

A more mundane example occurred when an architect specified a particular furniture manufacturer’s product or similar approved furniture, for inclusion in a tender for the interior fitout and furnishing of a large hotel complex.  The successful contractor provided an identical copy from another source.  This resulted in the specified manufacturer recovering damages for copyright infringement.

In two distinctly different, but similar examples.  Architect A prepared the initial concept design for a building which was further developed and documented by architect B.  Architect A promoted the completed building by implying that it owned the moral copyright of the completed building.  In the other example, architect X completed the developed design, documentation and construction observation services for a project which had been conceived conceptually by architect Y.  Architect Y considered, perhaps incorrectly, that X had infringed its architectural copyright.  (Neither architect appeared to have acknowledged the respective copyright interest of the other.)

Architect P designed a house in a form which replicated that of a traditional Japanese temple.  The owner Q had earlier built a house to a similar design and alleged that P had infringed Q’s architectural copyright.  It was argued on P’s behalf, that Q did not own the artistic or architectural copyright to a traditional Japanese temple which was in the public domain and secondly it was established that P was unaware of Q’s building, had not sighted their drawings, nor visited the site.  The matter was settled by correspondence.

Plagiarism:

Plagiarism isa close, but distinctive relative ofcopyright.  Each occupies a parallel path, but cover different considerations.  Copyright infringement is a legal matter, plagiarism is an ethical one which does not acknowledge the source or author of the copied work.  Copyright and plagiarism can also coexist.

A celebrated British case involving architectural plagiarism was Pearce v Ove Arup Partnership [1997] Ch 293.  In this case, Gareth Pearce, an unemployed architect at the time, claimed that his student design project for a Docklands Town Hall was essentially copied, without acknowledgement, by Rem Koolhaas in his design for the Kunsthal which was constructed in Amsterdam some years later.  Pearce produced evidence that Koolhaas had sighted and copied his student project design drawings.  This was rejected by the High Court judge and Pearce’s expert witness was referred by the judge to the Registered Architects Board UK, as a disciplinary complaint.  The Disciplinary Committee following extensive evidential inquiry, determined that the expert witness had acted properly and, surprisingly, Koolhaas’s legal counsel admitted that plagiarism had occurred.  

The Act has 270 clauses.  Here are some salient clauses that may be of particular interest to architects.  These are subject to judicial interpretation and precedent;  Copyright concerns should always be referred to experienced legal counsel for advice.  

Definitions:  Copyright Act 1994 references are noted thus [ ].

Copyright:  Copyright is a property right that exists in original works including, inter alia, literary or artistic works, which includes a graphic work, or model, irrespective of artistic quality, or a work of architecture, being a building or model of a building or a work of artistic craftsmanship.  Building includes any fixed structure and any part of a building. [14]

Duration of copyright:  In the case of any literary or artistic works, copyright expires 50 years following the death of the author. [22]  The Crown is bound by the Copyright Act, but its ownership right expires 100 years after the work was made. [26]

Author:  The person who creates the work, in this case, the literary or artistic work.  The author may be a natural person or a body corporate. [5]  Joint authorship exists when two or more authors contribute in an indistinct manner. [6]  The author must be a NZ citizen or an individual domiciled in NZ or a body corporate registered in NZ, or alternatively have similar characteristics in a prescribed foreign country. [18]

Copyright owner:  The copyright owner is the person entitled to the copyright in the work.  The owner of thein a work has the exclusive right to copy the work or to make adaptions to the work and to authorise another person to do so. [16]

First ownership of copyright:  The first owner is the author of the work.  Where an employee in the course of their employment makes a literary or artistic work, the person’s employer is the first owner of any copyright in the work.  Where a person commissions, and pays or agrees to pay for, the making of a drawing, diagram, plan or model, that person is the first owner of any copyright in the work. [21]

Publication:  Means the issue of copies of the work to the public.  In the case of a work of architecture in the form of a building, or an artistic work incorporated in a building, construction of the building shall be treated as equivalent to the publication of the work. [10(2)]  However, in the case of a work of architecture in the form of a building or model for a building, or a work of artistic craftsmanship, the issue to the public of copies of a graphic work representing or of photographs of the work, do not constitute publication for the purposes of the Act. [10 (4c)]

Copyright infringement:  Occurs when any person does any restricted act which includes copying, the importation of copyrighted works and possessing and dealing in copyrighted works. [30; 35; 36]

Criticism, reviews and news reporting:  Fair dealing with a work for the purposes of criticism or review, does not infringe copyright in the work if such fair dealing is accompanied by sufficient acknowledgement. [42(1)]

Making of subsequent works by same artist:  Where the author of an artistic work is not the copyright owner, he or she does not infringe copyright in that work by copying the work in making another artistic work, if the main design of the earlier work is not repeated or imitated. [77]

Reconstruction of buildings:  Anything done for the purposes of reconstructing a building does not infringe copyright in the building or in any drawings or plans with which the building was constructed. [78]

Back-up copy of computer program:  Copyright in a computer program is not infringed by making a back-up copy intended to preserve the original in case of its loss, destruction or rendered unusable. In such circumstances, the back-up copy is deemed to become the original copy. [80]

Moral right:  The author of a literary or artistic work that is a copyright work has the right to be identified as the author of that work. [94]  The author of a work of architecture in the form of a building has the right to be identified as such on the building as constructed. [94(7)]  Identification is by appropriate means visible to persons entering or approaching the building. [95]  Such moral right may be asserted generally on an assignment of copyright, or at any time by instrument in writing signed by the author. [96]  Moral rights are not assignable. [118]

Licence:  A licence granted by a copyright owner is binding upon any successor in title of that person’s interest in the copyright. [111]

Assignment:  An assignment of copyright is not effective unless it is in writing and signed by or on behalf of the assignor. [114]

Remedies for infringement:  An infringement of copyright is actionable by the copyright owner.  Relief is in the form of damages, injunctions, accounts or otherwise as available to plaintiffs in other property rights. [120]  Where the defendant did not know, and had reason to believe, that copyright existed in the work, the plaintiff is not entitled to damages, but is entitled to an account of profits. [121]  In respect of the construction of a building, no injunction or order can be made after the construction of a building has begun, nor require any such building, in so far as it has been constructed, to be demolished.

Graham Strez 10/01/2020

Completion Statements

Completion Statements

When developer-driven housing projects cut out the architect for observation during the construction phase, it often turns out that they later require a completion statement in order to meet the terms of sale for the units.  This task is fraught with problems:  if you have not been involved in the construction as it happened, how can you possibly offer a sensible opinion on how that work was carried out? 

No matter how carefully you seek to limit your completion statement to “what you can see, when you saw it” the pressure to expand that statement to meet the requirements of individual purchasers will be immense, and the interpretation of it several years later when things have gone wrong is beyond your control.  Even if you were only required to certify in relation to fitness for occupation, inevitably the question will arise about why you did not – at the same time – see something else which (several years later) caused costly problems.

This is an issue that should be dealt with at the time you are engaged for the project, when the proper scope and risk management arrangements can be put in place.  Hopefully the extent and purpose of your attendances during construction is clearly described.  If it is limited in extent, that will be a very important matter to set down.

We have dealt with this many times before!  See, for example under posts for Practical Completion and Fitness for Purpose Statements.

On a similar issue, different clients (and/or their funders) have different ideas about what a statement of practical completion should say.  Again, this is an issue that should be discussed at the beginning (so you can prepare for and charge accordingly) rather than near the end of the project, when you can be leveraged to your disadvantage.  Clients have been known to demand a statement of practical completion – using their text – in return for a prompt payment of long outstanding fee invoices.

You will recognise what comes next:  The short point is:  the NZIA or CCCS terms are “neutral” and built up from many years of experience in projects of all types and sizes, so you should be VERY AFRAID of attempts by others to reinvent the wheel, with the prospect of unexpected and potentially unwelcome outcomes.

You can only “certify” on the basis of the work you have undertaken;  so it would be useful to qualify any statements so as to make it clear that you are only commenting on the basis of (and to the limited extent of) the scope of work for which you were engaged.  And if others have altered what you did in any way (with or without your knowledge), you cannot be responsible for that unless you have specifically accepted the change.

In the absence of a statement limiting your involvement, the chances are that you will be held to have been part of or party to something that may have not been within your control.  For example, if a client changes an item unilaterally or contrary to your advice, you do not want to be later confronted with the assertion that (by default) you agreed to it.

Be aware that if it comes to a claim against you, there is every prospect that any and all of your documents might be available to the claimant, whether you agree or not.  That means that correspondence, site notes and office memos must all be consistent:  in the event of discrepancy or contradictions or ambiguities, the claimant will exploit those against you.

If your statements are reliant on information provided to you, then make that clear.  To some extent you will have a duty to review and accept that information, in other cases you would be wise to accept it without review, but in all cases, you will need to be satisfied that it meets your expectations as a prudent architect.

You should not be making a statement which might suggest your taking responsibility for the actions of others.  By way of example, let’s take the issue of a CCC by the BCA.  It would be a simple statement of fact if you confirmed that a CCC had been issued;  but you would most assuredly be putting the noose around your neck to state that a CCC had been issued “and all compliance requirements have been met”.  If it is later found that the CCC was wrongly issued, your statement will join you into that problem.  It is easy to apply the same principle to all sorts of warranties and producer statements by others, where the issue will be whether the contract requirements (or consultant requirements) have been met.

Similarly, if you have adequately observed the work, you could reasonably state that the contract requirements set out in the documentation provided by you under the terms of your engagement have, to the best of your knowledge and belief, (and if relevant, in reliance on listed documentation by others) been satisfied.  But there is no reason why you should put yourself at risk by saying that the work complies with this or that law or regulation, or that it is fit for purpose and/or meets the expectations of anyone else.

Communication And The Client Experience.

Communication And The Client Experience.

Melanie Lochore (Board Member) considers the “client journey”

Architecture is primarily about communication.  A successful architect-client relationship is based on trust and for meaningful dialogue to occur there must be confidence in and respect between architect and client. 

Good communication skills breed trust, reduce perceived risk and increase repeat business. 

Communication failures are at the root of a high proportion of claims from disgruntled clients who feel that their architect has let them down.  The potential impact of a claim or complaint on an architect and their professional reputation is immense.  Many claims could have been avoided by improved communication with the client.

How Architects communicate well, build trust, and improve the client experience:

  • Educate your client.  The education of the client is a fundamental component of a successful client-architect relationship.  Architects often assume that clients have a broader understanding of the design and construction process than they really do. Assume they know nothing.  Discuss and inform.  Ensure that they understand the design process and what information they will need to pass on to the design team.
  • Listen to your client.  Respond to their concerns. Don’t make assumptions. Architects who listen and understand are better placed to challenge the brief.  Ensure your client provides you with clear feedback.  Let them know that their contributions are valued.
  • Identify and manage risk.   Identify and communicate areas of risk to your client and ensure they are involved in decision making about reducing or eliminating risk.  Clearly describe the reasons behind design decisions and the effect of them on project outcomes.  Managing risk means anticipating failure and planning how to deal with it.
  • Manage client expectations.  One of the fundamental ways to build trust is to deliver on what you promise.  If the client has unrealistic demands regarding budget and schedule, be honest with them about what is feasible.  Don’t overcommit and don’t be afraid to say no.  Do not avoid difficult conversations.  Advise early if budget or programme are escalating beyond initial estimates.
  • Avoid ambiguity;  confirm decisions.  Be clear in your communication and avoid ambiguity.  Ambiguity is a problematic issue that can lead to mistrust and damage communication.  Discussion is a great way to communicate with your client but follow up all critical decisions and advice in writing.  As time passes it is easy to forget exactly what was said, and clients are prone to misinterpreting or forgetting key issues.
  • Tailor design communication.  Communicate your design intent to your client in a language they understand.  Employ easy to understand visualisation techniques to communicate design ideas and decisions.  Architects assume that clients can read drawings well and understand technical architectural vocabulary, this is often not the case. 
  • Put yourself in the client’s shoes.  If you discover a problem, step back and be objective.  Prepare for and move to resolve it as soon as you can.  If your client understands you are being “up front”, maintaining goodwill, and are proactive in finding solutions, the prospect of escalation may reduce.  Understand the issues from the client’s point of view, and prioritise that over defending your pride.  If there is the potential for a claim against you, notify your insurers and seek their instructions as soon as you can.  Do not indicate to your client that you anticipate a claim on your PI. 
  • Keep them involved.  Reply promptly to client’s letters, emails and phone calls.  Be proactive in problem solving and decision-making, and keep them involved in it.  Demonstrate to your client that you are acting in their best interests. 

Communications: Put It In Writing! (Or A Picture).

Communications:  Put It In Writing! (Or A Picture).

High in the list of reasons for claims are:

  • Inadequate ongoing communication between architect/client/contractor
  • Inadequate confirmation of contract performance
  • Partial, absent, or inadequately recorded observation role.

We offer a few basic comments below:  they are focussed on these three issues and on risk management, and are by no means comprehensive.

  • Engagement:  As soon as it is reasonable to do so, communicate to the client your understanding of the project, your role in it, and the fees and terms applicable.  Review this on an ongoing basis throughout the contract, update as required, and promptly confirm changes when it appears necessary to do so.
  • Design Brief:  Agree and record in writing, updated as the project progresses through typical stages of design and documentation.  Wherever possible, the design brief and later instructions should establish priorities:  information without context is inadequate.  For alteration work and where the client is familiar with the building, the Design Brief might be confirmed by a sketch plan with accompanying notes, but for new work it may be risky to rely on approval of the concept drawings as establishing the brief.
  • Action notes:  Requirements for action must confirm who is to take action and when.
  • Client communication:  Clients (and their lawyers) usually understand words better than architectural drawings:  be sure that their requirements are understood, recorded and confirmed by them.  And they will change, in which case the change also needs to be dated and confirmed.    
  • Milestones:  At each point at which the project reaches a milestone, confirm with the client before moving to the next stage, and inform them of the consequences of having to backtrack or change direction.
  • Progress reports:  We know that design is an iterative process.  If it was not, then we could start the detailing on day one of our engagement.  Each step of the way is likely to throw up conflicts and reconsideration of priorities:  that is not wrong, it is part of the process.  Clients need to be reminded of that, and kept abreast of progress, and of the way the changes are evolving, why, and the need for their ongoing involvement and decision-making. 
  • Site & meetings records:  Keep a record of all project meetings and site visits regardless of whose duty it is to formally do so.  Take plenty of photos.  These notes and photos will be your first line of defence in the event of future litigation claims.  Record at least the date, those present, the scope and purpose of the event, the work in hand completed or about to start, actions required of the architect and others;  and, if relevant, weather conditions, defects remediation, Health and Safety issues and general workmanship observations.
  • Observation v contract administration:   They are not the same.  You may be engaged for one or the other, or both, or neither.  Whatever the case there should be a clear definition of what your scope of work is and what it does not include.  Changes to that scope should be recorded, preferably with reasons and a note to the client confirming the consequences.
  • Periodic site visits:  If engaged for an Observation/ Contract Administration Role, then site visits on a periodic fashion as agreed at the start of the project should be undertaken, (perhaps weekly or fortnightly) depending on the scale and complexity of the project.  Site Observation by the Architect may also be required at key phases and to review a sample of critical work.  This task requires methodical care, attention, and careful record-keeping. 
  • Concealed work:  Generally, the Architect is liable for works which they could have reasonably been expected to have observed during their time on site assuming the necessary access is available.  Where work has been completed but unable to be inspected, there is an assumption that it has been carried out to the contract requirements.  But where “what can be seen” suggests that concealed work is unacceptable, the Architect cannot ignore the inference and should follow up.
  • Limited Observation:  Does such a thing exist?  This is dangerous territory:  there are many claims where the Architect understood that they were only required to look at “this” but (several years later, with faded memories and unclear records) the claimant’s lawyer has asserted that any professional on site for whatever reason could not have failed to notice and take action on “that”.  Be very afraid.
  • Supervision:  Periodic observation is not continuous site management/ quality control/ site supervision and is not a substitute for nor a guarantor of the contractor’s responsibility to carry out the contract as required by it.  The contractor is required to seek timely clarification of gaps ambiguities or errors in the documentation, or apparent conflicts with building code requirements, when and if necessary. 
  • Defective work:  The Architect is entitled to expect the inspected works are representative of all work of a similar nature on site, including type, spacing, fixing, quality of installation and finish.  Defective or inappropriately installed materials or finishes are not acceptable.  Substituted materials are only acceptable if approved in writing by the Architect.  All works are assumed to be plumb and level or sloped as required in accordance with the contract requirements without the Architect having to necessarily confirm, measure or verify independently. 
  • Warranties and guarantees:  If a warranty or guarantee is called for, there needs to be a process for obtaining confirmation that it is put in place.  Think carefully about what they are called for, what they might cover (materials and workmanship may be two very different things), and what responsibility you may have (if any) in the level of benefit they provide and how they are obtained as required by the contract.  It is not your responsibility to “vet” them, but the client will not be impressed if they turn out to be useless or unenforceable.  Your client needs to understand that warranties and guarantees can vary over time, are dependent on regular (or defined) maintenance, and can vary between similar products.
  • Completion:  The Architect is entitled to assume that warranties will be provided where called for in the contract, and that on completion the project will be properly maintained.

The Continuing Saga of Client-Imposed Agreements for Services

A recent enquiry to Aon from a member was in relation to a Housing NZ project, where HNZ was seeking a statement that “ …. XXXX Architects:
(1) warrants to HNZ that all work will be carried out in a good, professional and workmanlike manner (and in accordance with the provisions of the Contract);
(2) will be required to repair all defects in their works; make good and indemnify HNZ for all direct losses to the works arising from any defect in their works;
(3) will carry out any repair work for which they are liable under the warranty.
(4) if they do not do so within 14 days after receiving notice by HNZ, then HNZ may undertake the work and recover all costs;
(5) indemnifies and holds HNZ harmless for any costs, claims, liabilities etc for which HNZ may become liable arising from failure by the architect.”

This wording was all in relation to a Subcontractor Deed of Warranty sought from the Architect. It is not appropriate to a professional services contract; it is likely to impose terms and conditions beyond those covered by the PI policy.
The short point is: the NZIA or CCCS terms are “neutral” and built up from many years of experience in projects of all types and sizes, so you should be VERY AFRAID of attempts by others to reinvent the wheel, with the prospect of unexpected and potentially unwelcome outcomes.