De-risking change management
Requests for changes – whether to a design, specification, timetable, or fees – have always been one of the most common sources of claims against architects. And an architect’s counter argument usually relies on one thing – good record keeping.
Lack of proper record keeping is a perennial charge laid against less experienced practitioners and will be attacked relentlessly in the courts.
RIBA Insurance Agency director Paul Dinwoodie believes that electronic communication is making things worse by speeding up the process. Clients and contractors asking for changes via instant messaging and email expect an instant response. Record keeping can get overlooked in the process.
‘Architects need to step back and assess any request for a change, particularly when it arises from a casual discussion, such as on site in an undocumented exchange. Every change, however small, should be recorded and subsequently sent to the instructing client or contractor with a request for their confirmation’.
A classic scenario is a client suggesting a change to save money that the architect accepts but expresses concern about, making it clear that the change would not be recommended by them. Dinwoodie points out that expressing concern is simply not enough. Any reservations about a design change should be noted in writing along with the reasons given by the client for their instruction.
It then must be made clear to the client that any consequences of this decision will be their responsibility and that no liability for the change can be accepted by the architect as it does not form part of their original design.
‘If this is done and records kept, claims for problems arising from design changes can be made to go away,’ adds Dinwoodie.
Another common source of disputes is an informal agreement for extra fees to be paid for additional work. If the additional fees are subsequently withheld and a claim lodged by the architect, the client will say: ‘Where is the agreement?’
Another common tactic, according to Dinwoodie, is for the client to suggest that the architect was to blame for creating the need for extra work. The case for record keeping is therefore the same for fees. Any variation on agreed fees should be detailed and sent to the client for confirmation.
And the same applies yet again for delays to a project. The reasons for any delay should be identified along with the responsible member of the supply chain and duly recorded.
‘The question to ask yourself is if you can happily stand up in court and demonstrate that the instruction or request was recorded, based on your files. If you cannot, you will see your arguments demolished,’ warns Dinwoodie.
When dealing with contractors, architects should have an attitude of expecting claims, particularly at a time when contractors are operating on slim margins and are actively looking for any excuse to reduce costs.
Contractors employ professional claims teams as part of their business model. Dinwoodie warns it is not unheard of for an architect to have a pleasant conversation on site, only to discover that information casually given out is subsequently used to inform a claim.
Thanks to Paul Dinwoodie, Executive Director – Financial and Professional Risks, Arthur J. Gallagher. RIBA Insurance Agency is a trading name of Arthur J. Gallagher (UK) Limited and is the official insurance broking partner of the RIBA.
Text by Neal Morris. This is a Professional Feature edited by the RIBA Practice team. Send us your feedback and ideas
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Posted on 5 July 2018.