In the past few years, Florida has become a bit of a minefield for design professionals. Landscape architects, architects, engineers, and others have been exposed to an unusual level of potential personal liability, compared to colleagues in most other states, if the firms they work for are sued. But a new law, signed by the governor, Rick Scott, in late April, will bring Florida in line with the majority and give individual designers a greater degree of protection from litigation.
The law (Section 558.0035, Florida Statutes) was a response to court decisions that expanded clients’ ability to sue design professionals for economic damages. Until it takes effect on July 1, only firms–not individual professionals–can protect themselves with limitation of liability provisions (sometimes called “LOL clauses”) in contracts.
In Moransais v. Heathman, in 1999, the Florida Supreme Court allowed a homebuyer to sue the engineers who allegedly failed to identify defects in the building, even though the engineers were not personally named in the contract between the buyer and the firm they worked for. And in Witt v. La Gorce Country Club, in 2010, a state appellate court said that a limitation of liability clause in a contract between the country club and a geology firm hired to design and build a reverse osmosis water treatment system didn’t limit damages for the firm’s owner himself in a negligence lawsuit.
The new Florida law extends limitation of liability provisions to individuals if those provisions are written in the specific way it prescribes (it even requires that part of the provision be in all capital letters and an extra-large font size). It will not apply retroactively, so contracts negotiated before July 1 could still cause liability problems for professionals.
An analysis on the website of law firm of Smith, Currie, and Hancock predicts that the new law will mostly affect owners and contractors who lose money in situations such as construction delays caused by a design professional’s negligence. It doesn’t affect lawsuits for personal injury or property damage.
The extent to which design professionals and firms can limit their liability through contracts varies from state to state. Most states allow some enforcement of limitation of liability provisions, and recent litigation has tended to favor enforcement. But in other states, laws or policies designed to prohibit the transfer of risk and liability make it hard or impossible to enforce them in court.
Even in states where the provisions are enforceable, their effectiveness depends on exactly what the state law requires and exactly what the contract says.
“What Florida teaches us is that every design professional should take a close look at the situation with his or her state law, see what protection is available, and make sure contracts include any ‘magic words’ the law or regulation requires,” Stuart Kaplow, a real estate and construction attorney, told me.
And because state laws can change fast, it’s smart for chapters of professional groups to keep a close eye on the issue. In this case, Jonathan Haigh, ASLA, the Florida Chapter ASLA’s government affairs chair, told me that the chapter worked to make sure that landscape architects were treated with parity and that there were no attempts to exclude landscape architects or otherwise restrict the scope of practice for the profession.