Communique 1994
Reviewed June 2009 updated Feb 2017
It is by no means unusual for a claim to arise in response to an architect advising a client that there is the prospect of legal action in order to recover outstanding fees. When this occurs ahead of notifying a potential PI claim to insurers, the insurers could decline cover on the basis that the architect’s actions have precipitated the claim.Recovery of unpaid fees is a commercial decision for the architects and NZACS has no desire to restrict it. But whilst the Claims Committee has empathy for members’ practice operations, it also has considerable experience of clients initiating professional negligence counter claims to offset fees, or as an inducement to fee negotiation. We urge members to advise Aon of the fee/service situation before initiating legal action. Sometimes early communication with the Claims Committee will minimise the consequence of hasty fee recovery.
Our insurance consultants, Aon, remind members when they have registered possible claims to return immediately the confidential Questionnaire forwarded by NZACS. We require this for statistical purposes, but more importantly to obtain a quick overview of the nature of the circumstances giving rise to the Claim Notification. This will assist the Claims Committee in their discussion with the architect on approaches to be taken by the architect to safeguard their interest and those of the Society.
On occasions, the Claims Committee has also been prejudiced in claim settlement when the architect has quoted a discounted fee for limited services, but there has been no written confirmation of the professional and commercial relationship between architect and client. Members are asked to confirm early the extent of architectural service provided, and importantly in the case of partial service, to indicate the limits of the service to be provided – perhaps (in part) by listing tasks not included in the service. For example, an assumption that project management is provided - as distinct from contract administration – would provide the client with a wider platform from which to launch Professional Negligence litigation.