The REAL Green Goblin. . . Legal Liability. . .
Tuesday, May 19, 2009 at 10:04AM The following is reproduced with the permission of its author Gary L. Cole, AIA, Esq. Go to the "Our bloggers" section of this site for Gary's bio.
Green Goblin from spiderman.ugo.comThe Real Green Goblin - Emerging Legal Liability
for Green Design Professionals and Contractors
[PART 1 – PART 2 TO FOLLOW SOON]
“Green” design and construction legal liability: It was, of course, inevitable that the legal profession would turn its curious eye in that direction - there’s just too much splashing in the water to ignore it. But before panic sets in, the news may not be all that bad, because in the fast-evolving world of “green” and “sustainable” design and construction, Ben Franklin had it right – an ounce of prevention truly is worth a pound of cure.
First the good news: the legal profession hasn’t yet embraced the litigation potential of green design and construction the way it has, say, work-related injuries, deadly prescription drug side effects, or tobacco-related lung cancer – though a caveat to that statement will be discussed later in this post. It’s unlikely that you’ll soon see 2:00 a.m. commercials asking if you or a loved one have been injured or killed by poor site design or the loose prop of a wind turbine.
The bad news is that attorneys, especially those already practicing in construction law, will soon realize that aside from green design and construction’s sometimes specialized and occasionally ill-defined vernacular, there’s no real novelty in the types of claims that might arise. No new frontiers of jurisprudence need be explored – a leaky green roof is still a leaky roof – whether it also requires regular mowing and landscape maintenance changes little from a legal perspective. Green design and construction is novel only in that, unlike traditional design and construction, it serves an environmental urgency beyond a basic programmatic utility. Roofs used to just keep buildings dry, now they cool cities and save polar bears, but they can still leak, and this is familiar territory to construction attorneys, regardless of a roof’s other design intent. But the good news is that the defensive tactics for emerging green design and construction claims are also well-established, though as yet not well vetted in this context.
The purpose of this discussion, which will be presented in several short installments, is to highlight the missteps that design professionals and contractors may make along the green path of good intentions which increase their exposure to later claims of liability when things go wrong – as they often do in construction. It will then look at ways that risk may be mitigated in advance and hopefully prevent green design professionals and contractors from becoming the poster children for precedent-setting lawsuits that could have a chilling effect on public acceptance of sustainable design and construction. There’s always a tipping point where the risk of something new outweighs its potential benefits, and markets are remarkably efficient in sensing when that point has been reached, and the shark, as they say, has been jumped.
Part 1 – What Is Green Design and Construction Legal Liability?
In non-legal terms, most legal liability associated with green design and construction will arise from one issue – though it’s an issue with many faces – unfulfilled expectations. The legal vernacular for expressing this would be something along the lines of: “breach of contract through failure to perform according to express and implied representations and warranties.” But these claims have been made in construction conflicts forever – even the ancient Romans had laws on point. “Green” or not, the problem arises when connected parties in a development’s long chain of events – be it a manufacturer/vendor to an architect/contractor; or an architect/contractor to an owner/developer, represented that taking certain actions would result in certain outcomes – which outcomes did not occur as represented.
Again, there’s nothing novel about these type of design and construction-related disputes and most claims – but not all - boil down to some manifestation of this issue. With respect to any fellow attorneys reading this post, yes, I’m simplifying matters and there are many other types of claims that can arise in construction disputes – so stipulated. But in the case of green design and construction, the many manifestations of claims related to unfulfilled expectations will likely lead the pack if/when this type of litigation gains traction.
Regardless of the prosaic core nature of the claims themselves, getting to that core currently requires navigating a unique combination of broad environmental goals wrapped in the often vague and generalized movement terminology. The reduction of energy usage and carbon footprints to combat global climate change, while certainly worthy macro goals, does not exactly translate well at the micro level that's required to prepare protective contracts which provide clear, realistic and defensible representations and warranties.
What exactly is “green” design and construction and how can its larger goals be accomplished without giving an old class of legal claims a green paint job and thereby discouraging markets from accepting the challenges of those goals?
Naming the Thing
To start with, a great deal has been written about the need to define “green” and “sustainable” in precise, fully-accepted ways that can be translated into clear contract language. I agree and disagree in part.
I agree that without greater precision in the vernacular of green design and construction, unfulfilled expectations are a certainty. Just naming something doesn’t make it so and fuzziness of expression often belies fuzziness of thought. The less poetically-inclined players in the market – real estate developers, generally – sense that instinctively. Development proformas tend to be unforgiving and are curiously silent in matters of “good intentions.” And fuzziness of expression/thought and well-publicized claims that derive from these shortcomings may lead to a lack of credibility and eventually disinterest in sustainable development – green design and construction could collapse inward upon its own perceived hollowness. Presently unseen by the design and construction industry, the groundwork for that perception may already be in place it might only take a couple successful lawsuits to, at the very least, slow the industry’s momentum. And, since perception is everything, defining key green design and construction concepts and vocabulary in a way that provides better legal protection to design professionals and contractors before the courts do so, is probably wise.
I disagree in part, however, because much of what I’ve read about attempts to define the terms “green” or “sustainable” seems to be relying on the misplaced hope of a successful Grail-like quest for magic words or phrases – an enchantment maybe – that will ward off claims of liability. This is naive and dangerous and the legal community would quickly pierce this verbal sleight of hand, words being the natural playground of attorneys. When a “green” roof leaks, for whatever reason, design flaws, material defects or improper installation – everyone whoever glanced at that roof is likely going to court – at least in the beginning. It won’t matter what color the roof was called or how noble the broader goals of reducing that building’s heat island effect or providing a high-rise downtown nature retreat for the building’s occupants, it’s still a leaky roof and the legal profession will move in swiftly to allocate blame.
A balance between the verbiage used in a project’s green marketing claims (form), and its real performance (substance), is at the core of the high wire act that either strikes that perfect balance between a design professional's or contractor’s enthusiastic but careless risk, and the proper, responsible promotion of a new way of thinking and building. Using an accurate and supportable vocabulary to promote green design and construction is the first step in sustaining one’s business existence, which is always best way of accomplishing the somewhat loftier goals of the green building movement.
Having generally framed the issues, the next installment of this blog post will look at the specific causes and consequences of not heeding Mr. Franklin’s wisdom, what “prevention” really is, and how it can be used to reduce the legal exposure of design professionals and contractors in the brave new world of green and sustainable development.
[END OF PART 1 – PART 2 TO FOLLOW SOON]
[DISCLAIMER: This discussion is intended for general informational purposes only and is expressly not offered as legal or architectural advice, nor does it constitute advertising or a solicitation of any kind. And most of all – readers should always seek legal advice about their specific situations only from their attorneys, and architectural advice only from their architects.]
Reader Comments (20)
The question one might ask is; how long will the "sustainable design" movement be in play? If laws are written requiring energy performance and carbon footprint reduction, and Higher Education institutions require a more vigorous education concerning concepts developed from 1970 – 2009 in energy awareness, then I would argue that registering LEED projects and attaining “certification” will all be academic. The laws that govern design and construction promote the “health, safety and welfare” of the occupants, and it is the Architectural profession’s Hippocratic Oath to do so. Once Congress passes law and Attorney’s win cases, the precedents will be set, codes will be re-written and the Design and Construction industry will follow suit. If the article referenced above is the pre-cursor to this activity, we will not need a LEED guideline to follow; the path would have been blazed.
Today LEED is not a requirement of any legal institution, (that I know of). Government entities that write guidelines requiring all project will attain (silver , gold, etc) certification are not required by law to follow through. They are, by the definition of the word “guidelines”. These guidelines take a back seat to budget, especially during a value management session.
I have colleges that give LEED 5 years to evolve into Law, and some who maintain that LEED will push the envelope and become more of an industry laws and Standards that coordinate other standards such as EPA, ASTM, ASHREA, Energy Star, etc. Green or not, Sustainability is here to stay, I believe we are in the middle of a cultural shift. Do you see it any other way?
Posted by Daniel Smith AIA LEED AP
A straightforward presentation of relevant issues. I will look forward to Mr. Cole's follow up blog post.
Posted by Steven Canter, AIA, NCARB, LEED AP
Interesting analysis by Mr. Cole in this article. I generally agree that there isn't much new under the sun in terms of the genus of claims in so-called "green" litigation. But I believe certain specie may evolve as relatively new landscapes, casting unusual shadows.
For instance, in a recent case, we litigated one of the first Insulated Concrete Form installations in Southern California. As attorneys with years of experience in construction litigation, and building in general, we were unfamiliar with the product. We thought "hey ... maybe we have a run-of-the-mill products liability case." The opposition representing the contractor certainly wanted us to think so, they were hot to make it a garden variety negligent design spec case (untried/untested product for the particular application.)
But when we got a little deeper into the forensic process and discovery, it became clear that the product was of a relatively high quality, and the AIA design spec description was sloppy though not necessarily negligent. Fact was, the construction group just didn't have the first clue, and further, didn't bother to sufficiently educate themselves, as to building with this new "green" product with its complex and unique installation process. I expect to see a lot of both quality AND fly-by-night products pushed through the ICBO and other qualifying groups, followed by a lot of fly-by-night contractors thereafter mishandling the spec, as attorneys and construction experts unravel the mess of rushed products too early to market and the necessary learning curve.
Yes, there are plenty of defects cases in the genus of conventional construction processes, but I'm certain we will find a lot of contractors not prepared to handle highly specialized 'green' products, and you will even see a lot of new "design-assist" and "design-build" litigation on the part of contractors who spec the products themselves and bungle it.
There will also be significant cases of LEED AP liability. APs will be 'certifying' and later, when the performance doesn't actually meet 'certified' specs, when the owners don't get the energy savings as advertised (and paid for), and when governmental agencies start levying fines and looking to get their pound of flesh, there will be claims made against the APs and their E&O carriers.
I also expect that the system will breakdown in Planning & Building Departments nationwide who may be 'mandated' to fast track entitlements and permits on LEED certified projects and others, which may engender some claims and litigation when certified "expediters" and "qualifiers" and others get bogged down in delay and disruption.
Posted by Stephen M. Sanders, Esq.
Daniel Smith makes some good observations about the future of LEED - and it may indeed eventually evolve into actual law. In fact, some Florida cities have begun requiring that certain types of buildings be constructed according to various LEED certification levels - mostly public buildings so far. But there are two big concerns about local and state governments rushing to impose these types of standards for private construction.
One is the chilling effect it may have on private development. If sufficient incentives are not offered to developers for undertaking additional design, certification and construction costs, especially if those developers are sellers not holders, then those projects won't pencil out on a proforma and development will just go elsewhere - that's just the nature of markets. It's impossible to measure the global climate effect a local ordinance would have on local development if it required every public and private building to meet a certain LEED standard. But it would be very easy to measure the economic dampening effect such an ordinance would have on local development if no one developed there. So, cities need to adopt a carrot and stick approach that has real financial meaning to developers and not depend on good intentions to spur green development - it just won't happen, and green development may end up alongside the urban street malls of the 1970s in the "Don't Ever Do This Again" chapter of design and urban planning textbooks.
The other danger is that until real specificity comes to what "green" development means, challenges to their legality on the basis of vagueness will have a good chance of prevailing. Which actually could be good if that's what it takes to put teeth in green building ordinances and codes.
Not just roof top gardens, but white/reflective roofing issues are finding their way into court rooms as Tom Hutchinson pointed out in a recent EcoStructure.
Posted by Peter Hetzel
Did we get a Part II. I am interested in knowing how "expectations" of energy savings and comfort can be framed as not to generate future liability as the projects are not "saving" enough or "comfortable" enough. Also who will be establishing tolerances for statement (savings within 5%, 10%...)
Posted by Misha Mladenovic
Did we get a Part II. I am interested in knowing how "expectations" of energy savings and comfort can be framed as not to generate future liability as the projects are not "saving" enough or "comfortable" enough. Also who will be establishing tolerances for statement (savings within 5%, 10%...)
Posted by Misha Mladenovic
Wow- looks like we are in for some turbulance in the Wind Energy Industry. I look forward to the next installment of information.
Posted by Terry Long
While the blog may be the beginning of a relevant argument, it is clear that the author does not understand the role of the licensed interior designer in the United States as he gives in his disclaimer, no forward to seeking the advice of an Interior Designer on the referenced design issues. Curious that your post occurs in the site of an International Interior Design Association (IIDA). Perhaps its time to enlighten the author.
Posted by Janice Stevenor Dale
Great article.
Posted by Heather Elsberry
This was one of the more informative articles I've read on this subject in a long time. There are many good observations made in the article.
Posted by Edgar Farrera
Interesting analysis by Mr. Cole in this article. I generally agree that there isn't much new under the sun in terms of the genus of claims in so-called "green" litigation. But I believe certain specie may evolve in relatively new landscapes, casting unusual shadows.
For instance, in a recent case, we litigated one of the first Insulated Concrete Form installations in Southern California. As attorneys with years of experience in construction litigation, and building in general, we were unfamiliar with the product. We thought "hey ... maybe we have a run-of-the-mill products liability case." The opposition representing the contractor certainly wanted us to think so, they were hot to make it a garden variety negligent design spec case (untried/untested product for the particular application.)
But when we got a little deeper into the forensic process and discovery, it became clear that the product was of a relatively high quality, and the AIA design spec description was sloppy though not necessarily negligent. Fact was, the construction group just didn't have the first clue, and further, didn't bother to sufficiently educate themselves, as to building with this new "green" product with its complex and unique installation process. I expect to see a lot of both quality AND fly-by-night products pushed through the ICBO and other qualifying groups, followed by a lot of fly-by-night contractors thereafter mishandling the spec, as attorneys and construction experts unravel the mess of rushed products too early to market and the necessary learning curve.
Yes, there are plenty of defects cases in the genus of conventional construction processes, but I'm certain we will find a lot of contractors not prepared to handle highly specialized 'green' products, and you will even see a lot of new "design-assist" and "design-build" litigation on the part of contractors who spec the products themselves and bungle it.
There will also be significant cases of LEED AP liability. APs will be 'certifying' and later, when the performance doesn't actually meet 'certified' specs, when the owners don't get the energy savings as advertised (and paid for), and when governmental agencies start levying fines and looking to get their pound of flesh, there will be claims made against the APs and their E&O carriers.
I also expect that the system will breakdown in Planning & Building Departments nationwide who may be 'mandated' to fast track entitlements and permits on LEED certified projects and others, which may engender some claims and litigation when certified "expediters" and "qualifiers" and others get bogged down in delay and disruption.
Posted by Stephen M. Sanders, Esq.
Stephen, no doubt you are correct that litigation will ensue. It will be up to the courts to let some degree of logic prevail when negligence is not apparant. Curious though .......... my understanding of LEED AP is that they are no more than paper pushers, or at least from a liability standpoint and from an insurers standpoint. In fact, insurers are treating them as low level consultants with only 3rd party liability. And I agree with their assessment. The LEED AP designation truely only allows you to organize and submit the paperwork through LEEDOnline. Unlike a general contractor who has some authority and responsibilty, LEED AP's are relegated to the position of "clerk" and I believe the courts will see it that way.
Posted by Bob Schecter
Pay no attention to the man behind the curtain. This blog and others like it seek to sensationalize and obliterate rational arguments. They have surfaced in many design related group discussions. While a few of the points are valid, most, if not all, are accounted for with any responsible agreement language.
The design professional should be warned; however, that the ambulance chasers are out there looking for unsuspecting targets. Blogs such as this only feed that beast and give false credence to the isues being raised.
Posted by Jim Griffo, AIA, IIDA, LEED AP
Thank you. It is a very important issue many might not yet consider.
Posted by Artem Ghavrish
I'll have a look Stephen thanks. I would that anyone who takes advice or recommendations as to "sustainability" and "green" building from a LEED AP, does so at his own peril. Again, the AP designation doesn't tie into knowledge of Green, just knowledge of administering the LEED process. Would an owner be able to sue the superintendent if the owner asked him a question regarding engineering? Well, I guess you can sue anyone. Keep in mind, as Grant alluded to, there are absolutely no prerequisites for being a LEED AP because no particular skill is required. It's simple a knowledge based exam to help ensure that you can fill out the paperwork and make the USGBC's job that much easier. Good idea, poorly thought out, and horribly implemented.
Posted by Bob Schecter
Bob,
:) (no offense taken ... but it's what we litigators do, afterall, isn't it? When someone, somewhere feels wronged or seeks justice and PAYS us to pursue redress ... Just another fact of life and a reality of doing business. Best to face it head on and manage the risk.)
I'm concerned less with the precisely defined function of the "LEED AP" designated professional, and more with the standard of care any professional must meet when providing recommendations as to "sustainability" and "green" building. Failure to meet the minimum standard of care when one gives such recommendations exposes any professional to potential liability. Carrying a "LEED AP" certification merely 'raises the stakes' a bit, since you would be holding yourself out as knowledgeable about the LEED certification process.
LEED AP guidelines are just ONE such potential source for recommendations and certification, and therefore for liability. I'm focused on LEED AP, because it may be on its way --- through the aforementioned pilot programs, its origin with the USGBC, and due a rapidly growing AP membership --- to becoming THE standard.
If or when that happens ... LEED APs will become targets, if they aren't already, and APs should seek advice from risk management professionals for insurance protections which their standard AIA, PE, Contractor, RE Broker, and ATTY policies may currently exclude, be they CGL, E&O or malpractice-type policies.
Bob, I've taken the liberty to post our discussion over at Consilience.org, but have done so without naming you since CREPIG is a private forum. There is a recent entry on point there from Stephen De Percio, Esq. that you may be interested in, right in line with our discussion. I would encourage you or anyone to check it out.
http://www.consilienceblog.org/
This was the site of origin for the original posted article from Gary Cole, AIA, Esq. at the top of this thread.
Regards,
Stephen
Posted by Stephen M. Sanders, Esq.
You place way too much importance on the LEED AP designation. Consider that if in fact the position held that much responsibility and/or authority, then having a LEED AP would be mandatory on a project, much the way having a General Contractor is a must. But the only solid impetus for utilizing a LEED AP is that it garners 1 credit toward certification. USGBC does not require a project to have a LEED AP. Any of the other qualified disciplines, like the architect, engineer, or even the contractor, can administer the project at LEED Online. The only requirement is the designation of an admin. So far as qualification of the certification requirements, the LEED process itself provides for that, requires it, and gives you a credit for it, So at this point, a LEED project is held to the same legal standards as any other project, whereby each discipline has it's certified architects/engineers and such with the traditional checks and balances as there has always been. On each and every project, and each and every planset, and each and every project manual, there should, unless someone slipped up, see the standard sticky note "..... comply with manufacturers specifications and installation instructions ...... So the onus hasn't changed just because the product, or part or system is considered "Green". New products have always been specified on projects. Nothing changes except for a new outlet for lawyers to pursue litigation. (no offense)
Posted by Bob Schecter
Bob,
I'm just not so sure about that ---- "Low level" consultants akin to a "clerk" hmmmm. --- What, like the example of a "paralegal" working for an attorney? At least with that paralegal, you know where the buck stops ...
Where does the buck stop, in your scenario, with the LEED AP "clerk"? The USGBC? Fat chance. Mere functionaries filling out forms, but supervised by whom? Though I myself am not a LEED AP, and so may be speaking a bit out of school on the subject -- so correct me if I'm wrong -- but it is my understanding that, by classifying based on the APs input, projects may receive the LEED certification of "Platinum", "Gold" etc. My understanding is an AP is making recommendations to the LEED service for classification of the project through the AP's "independent, third-party verification" from the AP's vantage point of having boots on the ground (ostensibly through inspection of the plans, permits and possibly as-built conditions, if any.) That looks like a ripe area for errors and omissions.
LEED guidelines in the various jurisdictions apparently remain as yet "voluntary & consensus" based, so it remains a bit difficult to determine what the so-called LEED AP "clerk's" standard of care would be, and to whom he owed a duty --- but still, owners and city governments expect certain incentives and benefits related to a successful LEED rating.
For instance, in Southern California, we have a LEED pilot project in Santa Monica where there is an "incentive" --- See e.g., SMMC 8-108-050 --- for plan check priorty on LEED "registered" projects, where the owner must submit proof of registration and a checklist indicating all the credits they plan to pursue before they can receive expediting permitting. City of Los Angeles has a similar pilot program requiring "Silver" certified level or higher for plan check priority --- See e.g., LADBS plan check form PC-STR.Aff39.
If I'm a LEED AP paid and working to expedite a project through plan check and LEED certification, and I submit incorrect information, and the project ultimately turns out not to achieve "Silver" level efficiencies as-built, I'm potentially negligent. Right? What recommendations did I give to get certifications, and were those recommendations followed in the as-built? Did I sufficiently manage my own responsibilities to see that LEED recommendations were implemented as planned?
I'm not at all convinced the courts will see folks termed "Associated Professionals" as mere "clerk" functionaries. From a risk management standpoint, if for instance I were to become a working AP, nervous-nelly that I am, I'd be incorporating and getting a big, fat E&O policy and carefully reading exclusions and buying riders --- then if the carriers, in their underwriting, want to "minimize" the risk seen as inherent in such undertakings, good for them and also for my wallet when the premiums would come due.
Regards,
Stephen
Posted by Stephen M. Sanders, Esq.
Nice post,
This is spot on, When writing spiderman they must have had legal liability and such in mind lol
Thanks for bringing this up