Design Professional Liability

If an owner (or other claimant) suffers personal injury or property damage as a result of design or construction deficiencies in a construction project, that person or entity may seek to hold the design professional liable for the damage. Importantly, though, there are several defenses that the design professional can assert in such an action. For example:

Statute of Limitations. Depending on the type of the claim being asserted against the design professional, there are varying requirements for when those claims must be asserted. For example:

• An action for breach of a private contract must be commenced within three years of the date the action accrues.
• An action for negligence or professional negligence must be commenced within three years from the date that the claimant knew or should have known of the claim.
• The statute of limitations for an action for contribution or indemnity, on the other hand, is not triggered until payment is made.

Statute of Repose. The statute of repose is similar to a statute of limitations, only instead of establishing a trigger point for when a claim must be asserted against an architect, professional engineer and contractor, it sets a specified time after which no further claims can be filed. Specifically, the statute of repose frees these entities from liability for lawsuits for wrongful death, personal injury or injury to real or personal property, arising out of defective and unsafe conditions of an improvement to real property that are brought more than ten (10) years after the entire improvement first became available for its intended use.

Certificate of Qualified Expert. In order for a claimant to pursue a negligence or professional negligence action against a licensed design professional, the claimant must file a Certificate of Qualified Expert with the court. This certificate (1) contains a statement from a qualified expert that the licensed professional failed to meet an applicable standard of professional care, and (2) must be filed within a designated period of time. If the claimant fails to timely file this certificate, and does not extend the time frame (as provided in the statute), the claim against the design professional will be dismissed without prejudice.

Economic Loss Rule. When an owner discovers design deficiencies in a construction project, it may sue the design professional to recover economic loss damages. The Maryland Court of Appeals defines these damages as “the loss of value or use of the product itself, the cost to repair or replace the product, or the lost profits resulting from the loss of use of the product.” Often, though, the owner does not have a direct contract with the design professional and cannot sue the design professional for breach of contract. The economic loss rule provides a way around this privity requirement. It allows tort liability to be imposed against a design professional who creates a dangerous condition which poses an imminent risk of death or personal injury to a claimant. Importantly, and fortunately for design professionals, courts interpreting this rule, however, have set a high threshold for what constitutes an imminent risk of death or personal injury.

Limitations of Liability. The enforceability of limitation of liability provisions in construction or professional services contracts has not been addressed by Maryland courts. Generally, though, Maryland public policy encourages parties to contact as they see fit. Courts have interpreted this policy to allow parties to (1) include limitations of liability in their contracts with the caveat that those provisions typically will not be read to cover situations beyond their express terms, and (2) include limitations of liability which limit a party’s entitlement to damages.

For over 80 combined years, the attorneys at Goldberg & Banks have successfully litigated these liability issues on behalf of both their design professional and owner clients around Maryland. If you would like to schedule a consultation to discuss a design professional liability issue, please call 443.641.9422.