New Law Provides Liability Relief for Designers

By John H. Baker

A new Oregon law makes it easier for construction design professionals to extricate themselves from baseless lawsuits. As of the first of this year, those who bring suit against architects, engineers, landscape architects, and land surveyors must certify that they conducted a reasonable inquiry into the defendant's likely legal responsibility before filing their claim. Set out at Oregon Revised Statutes (ORS) 31.300, the law requires a court to dismiss any claim against a design professional that fails to meet the certification requirement. Though this law expedites the elimination of unsubstantiated claims, the law does nothing to change a plaintiff's obligations to plead and to prove his or her case. More importantly, the law does nothing to reduce a design professional's legal responsibility to his or her client or to the public.

A design professional may be liable to his or her client, or to others, if the professional was negligent and if the negligence causes damages to that person. Without both, there is no liability.

Negligence is unreasonable conduct. The reasonableness of a design professional's actions is measured against standards set by other professionals in the same field and the community's professional standard of care. For example, one determines whether an architect's conduct is negligent by looking at what a reasonable architect would do in similar circumstances. Damages are the costs and losses resulting from the negligence — damages that would not have been suffered without the negligence.

To establish professional liability, a claimant will ultimately have to provide evidence, in the form of testimony, concerning the applicable professional standard, a breach of the standard resulting in an error or omission, and the connection between the error or omission and the claimant's losses. Such testimony must come from an expert qualified to explain the applicable standard for the judge and jury.

Oregon pleading rules require a party making a claim to clearly state the facts giving rise to the claim. By filing a pleading in court, the party represents that he or she has made a reasonable inquiry into the matter and that the stated facts are supported by evidence. A defendant can challenge this representation by filing a motion for summary judgment that asks the judge to decide the case on the evidence in the court record, without a trial. If the claimant fails to respond to the motion with some substantiating evidence of each pleaded fact, the summary judgment rule directs the judge to dismiss the case.

On its face, such a rule may seem adequate to protect any defendant from the anguish and expense of defending a case that has no merit. For design professionals, it is not. Too often, claimants and their attorneys, unfamiliar with the work design professionals perform, substitute speculation for facts and substitute their fervent (good faith?) belief for evidence. The design professional faces the expense and uncertainty of litigation. Many professional errors and omissions insurance policies carry substantial "deductible" amounts, placing the initial expense burden directly on the professional who can easily spend $10,000 or $20,000, or more, to dispose of the most meritless claim.

Preparing and arguing a summary judgment motion are expensive. As a party to litigation, the professional must keep up with the litigation, which may include document and deposition discovery proceedings. Then, the professional is faced with Oregon courts' reluctance to dispose of cases through summary judgment. Even the most faultless defendant can be tempted to buy his or her way out of the litigation and avoid the debilitating cost of a successful defense.

ORS 31.300 now establishes a threshold for a claimant's reasonable inquiry required under Oregon pleading rules. Claimants must now consult with their expert before filing. If a claimant fails to certify that its expert will support the professional negligence allegations, including the connection between fault and damages, the statute directs the court to dismiss the claim upon the defendant's request.

The law puts some teeth back into pleading rules that should protect Oregon citizens from baseless or speculative litigation. Although the law makes no provision for challenging the certification, a certification later found to be false can result in serious sanctions against both the party and its attorneys, regardless of the result in the underlying case. Today, design professionals have to answer for their mistakes, but only after they are shown to have made them.

This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

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