Liability Fear May Drive Up Costs

“The design professional is now under siege as a result of the explosive issue of liability insurance,” says Joe Vaccaro, vice president and regional director of the Los Angeles architectural office of Leo A. Daly Co., who has been chairman of a special task force formed to look into the subject.

“Not only is the cost of liability insurance exorbitant, but the fear of litigation will force architects to practice more conservatively, in a similar manner to preventive medicine. This course will inevitably make structures more expensive for the client, and ultimately for the public since such costs often result in higher-priced goods and services down the line.”

Believing that comprehensive liability solutions will only come in the long term, architects are trying to decide what to do in the short run. The California Council, American Institute of Architects (CCAIA) stepped in six months ago by organizing a steering committee, composed of six California architects, to research and analyze possible answers.

Of their 19 recommendations to the CCAIA board of directors, two could potentially reshape architect/client relationships.

An innovative concept is the recommendation to establish a peer review program, whereby an architect could request that a team of other architects with liability knowledge review practices, procedures and documents, and make suggestions on how to limit the architect’s liability exposure.

“This would not be mandatory and the findings would not be made public,” Vaccaro says. “This could become an invaluable service, particularly to a smaller firm that would not otherwise have easy access to this kind of information and could be wiped out by a lawsuit.”

Another recommendation is that the architect should stress to the client, and to the public, that a building is not completely finished until architectural refinements are completed. “While this seems like common sense,” Vaccaro says, “clients in the past have believed, and often have been led to believe, that once the doors are open, that’s it, the job is done.

“A building is a one-and-only product, not an assembly line of thousands of identical parts. In theory, each building is more complicated and sophisticated than its predecessor, due to continuing technological advancements. As a result, it will be necessary to take time to get the bugs out.”

Key to limiting the architect’s liability exposure will be astute contract negotiations in which detailed tasks and responsibilities between himself, the client and the contractor are specified. Traditionally performed architectural services will no longer be just assumed. The bottom line will be: the more architectural services, the greater the cost to the client.

An important architectural tour, called “Seventh Street: Mecca for Merchants,” will be offered by The Los Angeles Conservancy starting Saturday.

The docent-led downtown walking tour will explore the history and development of this commercial corridor, which was once described by the Conservancy “the one outstanding thoroughfare devoted to high-class retail shopping.” This area was largely built from 1906 to 1929, and some of the most significant historic structures in Los Angeles are located within its boundaries.

Along 7th Street, with a side trip to 8th Street, more than 30 buildings will be discussed as to their exterior and interior architectural styles, as well as interesting anecdotes.

Of special note are the Beaux Arts-styled Pantages/Warner Bros. Theatre (now the Theatre Jewelry Exchange); Los Angeles Athletic Club; the Neo-classical Bank of Italy; the former Brock’s Jewelers store, with its original Art Nouveau, mahogany display cases; the Fine Arts Building, unique in Los Angeles for its detailed Romanesque Revival structure; the Art Deco Garfield Building, and the adaptation of a Renaissance Revival building into the fire department’s Engine Company No. 28. Robinson’s and the former Bullock’s and May Co. department stores will also be included.

Following the kick-off tour, a reception will be held in the lobby of the Fine Arts Building. Tickets are $5 and include the tour and reception.

Advance reservations are required; send a check with self-addressed stamped envelope to the Los Angeles Conservancy, 849 S. Broadway, Suite M-22, Los Angeles 90014.

The Los Angeles Conservancy is also jointly sponsoring a conference June 18-20 for nonprofit organizations active in the rehabilitation of commercial and residential properties. Topics include the use of federal investment tax credits and other historic preservation techniques, real estate syndication and marketing strategies for housing, commercial and industrial sites.

Other conference sponsors are Pasadena Heritage, the National Trust for Historic Preservation and the National Congress for Community Economic Development. Support is also provided by the Atlantic Richfield Foundation.

The conference is open to executives, development staff and board members of nonprofit organizations. Registration is required before the conference; fee is $100 for NTHP and NCCED members,$125 for others. Contact Ruthann Lehrer, Los Angeles Conservancy at 213/623-2489, or Kevin McQueen, program director, National Congress for Community Economic Development at 213/622-3200.