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Engineering Malpractice Claims Trigger Specific Rules and Statutes

Professional Liability Defense

03/07/2016

By: Ashley Belleau

Malpractice claims filed in Louisiana courts against professional engineers are governed by specific state laws and professional statutes. Lugenbuhl’s professional liability defense team suggests that all parties involved in an engineering malpractice claim become familiar with these rules, which determine the types of claims allowed, legal damages, defense and resolution.

Lugenbuhl shareholder Ashley Belleau, a veteran of engineering malpractice disputes, stresses the importance of understanding these issues, especially those affecting the kinds of claims that can be made against an engineer – breach of contract, indemnity, negligence, misrepresentation and fraud.

Breach of contract is one of the more common malpractice claims. Cost overruns, for example, can be considered breach of contract if the total project cost exceeds the quoted price beyond a reasonable margin of error.

Indemnity can be defined as protection against loss or damage. Often times, a contract can include provisions which indemnify the contractor or other parties involved with the project from any liability arising out of the negligence of the engineer.

With regard to claims of negligence, a key consideration is that Louisiana allows contracts to hold engineers to higher standards than those typically required. A contract can validly require, for example, that the engineer is on site at all times to supervise work, even though this exceeds the normal negligence standard.

Engineering companies may be considered negligent if they fail to have a supervising engineer oversee the work, or if they negligently certify that a building meets plans and specifications when it doesn’t. This includes inherently faulty designs.

The final claim Ashley refers to is fraud. Fraud is defined by state law, in part, as “a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other.” In fact, silence or inaction can result in fraud.

Fraud risk management is governed in Louisiana through LAPELS, the Louisiana Professional Engineering and Land Surveying Board. Professional engineers are licensed through LAPELS and state law authorizes LAPELS to take disciplinary action when the board determines that an engineer commits fraud, criminal activity, or knowingly makes or signs false statements in connection with the engineering practice. If LAPELS determines those offenses occurred, the engineer can also face criminal prosecution.

A critical component for claimants seeking to file suit are the time constraints. While there is no time limit for fraud claims, Louisiana state law provides a five-year window when suing for alleged malpractice. Regardless of the circumstances, if the suit is not filed in the proper court within that period, the right to sue is lost. The clock begins in three ways, whichever comes latest: the mortgage office’s date of registry for the owner’s acceptance of the work; when the owner occupies or takes possession of the property; or when the engineer completes the service.

Generally engineers should not be held liable for malpractice if they can show the contractor did not follow the design. Engineers are also immune if all three of these conditions are met:

  • The suit involves damages for personal injury, wrongful death, property damage or the engineer’s acts, errors and omissions; and
  • The services were provided voluntarily without compensation in an emergency like a hurricane, flood, fire or other catastrophic event; and
  • The services were requested by a public safety or building inspection official acting in an official capacity.

With findings of negligence, Louisiana uses a comparative fault model for determining damages. A percentage is attributed to each person who contributed to the loss, regardless of whether they’re a party to the litigation. Under the model, no one can be held liable for more than his or her percentage of total damages. If the engineer’s design was faulty but there were also faulty materials or faulty construction, for example, the engineer’s liability is lowered to the assigned percentage of fault.

Many malpractice claims are often decided out of court. Considering the time and expense of litigation, mediation or arbitration may provide a better alternative for all parties.

Mediation is more informal, negotiations remain private and confidential, and, unless a settlement is reached, nonbinding. Both parties and the mediator must agree in writing to costs before the process begins. There are two types of mediator styles – facilitative mediation, in which the mediator seeks common ground between both parties to foster a resolution, or evaluative mediation, in which both parties must consent to a resolution, but the mediator can offer his or her own proposal for resolution.

If mediation fails, arbitration is often conducted according to the Construction Industry Arbitration Rules of the American Arbitration Association (AAA). Arbitration is more formal and binding for both parties with certain exceptions. Also, if the dispute involves public construction projects, arbitration cannot prevent the parties from going to court.

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Leading Lugenbuhl’s professional liability defense team, Ashley Belleau is coauthor of the Louisiana chapter for the “State-by-State Guide to Architect, Engineer, and Contractor Licensing.” Her primary areas of practice include professional liability defense, construction, corporate and commercial law, estate planning and litigation. Ashley also mediates and arbitrates business and construction disputes. She serves as member of the AAA Construction Panel and the Commercial Panel. Ashley also served as a mediator for the Louisiana Department of Insurance Hurricane Mediation Program, administered by the American Arbitration Association, and mediated over 350 hurricane wind damage disputes between homeowners and insurance companies after Hurricane Katrina. More information about Ashley’s extensive career and expertise can be found here

The content of this article is not intended to serve as an exhaustive review of the laws, statutes or issues related to engineering malpractice claims and is not intended to provide legal advice. The opinions expressed through this article may not reflect the opinions of the firm, individual attorneys or clients.