Architects’ Legal Strategy Decreases Suits

Architects and engineers are building a shelter against the ravages of litigation.

Borrowing techniques from the medical profession, they have launched a counterattack that has slashed significantly the number of insurance claims filed by design firms.

That is welcome relief for professions that routinely contend with client complaints about everything from the accuracy of estimates to the color of the carpeting chosen by a subcontractor.

The architects and engineers have taken up a two-pronged strategy. First, they have sought refuge behind much tighter contracts, which help ward off breach-of-contract suits. But they have also erected unusual new legal hurdles for unhappy clients and others who want to sue.

Now plaintiffs in some states must get another architect or engineer to agree that their complaint is legitimate, either before a suit is filed or very soon afterward. If they fail to get this go-ahead, the lawsuit is dismissed. And in at least one state, damages can be awarded against the plaintiff.

Certificates of merit are required in California, Georgia and Colorado, says Scott B. Greene, an architectural-liability lawyer with the Chicago law firm Pope & John. Hawaii and Florida have a weeding-out process in which plaintiffs take their complaints before a panel of industry experts for a non-binding review. And architects are lobbying for similar laws or panels in New Jersey, Washington state and North Carolina, among others, according to Paul L. Genecki, president of Schinnerer Management Services Inc. a leading insurer of design professionals and a unit of Marsh & McLennan Cos., N.Y.

Together, these tactics have sharply lowered the proportion of insured design firms sued each year from 40% in the mid-1980s to 26% last year, according to data compiled by Schinnerer.

Architects and engineers say that the certificate requirement works because it stops frivolous suits filed by greedy lawyers or by plaintiffs who don’t understand the architect’s or engineer’s role.

But plaintiffs’ lawyers counter that the screening procedures unconstitutionally limit access to justice. Architects and engineers borrowed the certificate idea from the medical profession. Since the mid-’80s, at least 12 states have discouraged suits against physicians, dentists and others by requiring a colleague to vouch for the validity of a malpractice lawsuit. The laws’ effects on medical-malpractice filings are hard to gauge, but the rate of filings has slowed, said American Medical Association spokeswoman Lydia Steck.

In upholding certificate requirements, courts have ruled that getting a design professional or doctor to approve a lawsuit is no different from using an expert witness at trial. The expert simply offers an opinion a little sooner, the courts said.

Courts also have said that the government has an interest in reducing frivolous suits, especially at a time when a malpractice-insurance crisis may be looming. However, Wyoming’s Supreme Court said state lawmakers went too far when they granted a panel of physicians binding power to screen lawsuits. Such screenings circumvent the judicial process, the court said in 1990.

Plaintiffs’ lawyers argue that litigation screening unfairly makes valid lawsuits tougher to file. And sometimes it’s hard to know whom to blame for a building’s defect before the lawsuit reaches the fact-finding stage, says Paul E. Schlam, a plaintiffs’ lawyer in Columbus, Ga. The certificate requirement stops attorneys from even getting to that point, he argues, so many valid suits get throw out.

Schlam says that is what happened in a lawsuit he filed for a subcontractor employee who fell through a roof and couldn’t work for a year. Six months after the lawsuit was dismissed because he didn’t have a certificate, Schlam found two experts who said the design firm probably was at fault. He rushed to refile the suit, but courts dismissed it again because too much time had passed since the original filing.

Plaintiffs’ lawyers also argue that certificates are an unnecessary protection against frivolous lawsuits. When an attorney signs a complaint before filing it, that person is certifying that the complaint seems legitimate, said David S. Shrager, a Philadelphia attorney who is a former president of the American Trial Lawyers Association in Washington. And attorneys who file frivolous suits can already be sanctioned under other laws, Shrager said.

He called the certificate requirement a sneaky way for defense lawyers to figure out, sooner than they ordinarily would, what expert witnesses and theories of negligence the opposing side plans to use.

Reprinted with permission of The Wall Street Journal. Copyright 1992 Dow Jones & Co. Inc. All rights reserved.