OFFICIAL figures show that the construction industry remains in recession. Output is down; jobs are down and less is being built.

Conversely, the general consensus among construction adjudicators is that adjudication referrals are on the increase. In addition, applications to the Technology and Construction Court are also on the increase. This should be cause for concern for all design professionals. Below are a few practical tips on how planners and designers can manage their claims risk:

l Appointment. A professional should always put in place written appointments with their clients. It is the appointment that ultimately governs the relationship between the professional and the client and as such great care must be taken in putting this document together. Points to consider are:

Work Schedule – the work schedule will list what the professional is to do. As a matter of good practice the schedule should be drafted as comprehensively as possible. “Broad brush language” should be avoided as this causes ambiguity and could lead to an argument that the professional has been engaged to do something that he has not agreed to do.

Net Contribution Clause – this is a form of limitation clause that pierces the principle that all “players” in a construction project are joint and severally liable for the employers should things go wrong.

De Maximis Clause – this clause sets a ceiling (or upper amount) for which the professional will be liable in the event something goes wrong with the project. The clause can be set as an aggregate amount (e.g for all claims together) or in the singular amount. Of course an aggregate amount is better. De Maximis clause limits should be set at the professional Indemnity Insurance limit that applies to the Professional’s policy (see below).

Liability Length – this governs the length of time that the professional will be liable after practical completion of the project. There are two periods – six or 12 years. Obviously, six years is better for the professional.

l Indemnity Insurance . While it is not a legal requirement, all professionals should carry with them professional indemnity Insurance (PII). This is especially true for those professionals who are sole traders or are in partnership as their personal assets are at risk in the event of a claim.

PII (subject to excesses and common exclusions) will cover the professional for negligent designs, etc and the damage that arises out of them. The question for the professional is how much cover should be carried? The answer to this point is that it depends on the value of the projects that the professional is engaged to act within. The higher the value the more PII cover the professional should have.

As part of tender processing an employer will usually stipulate the amount of PII cover that the professional is required to have. If the professional does not have that level of insurance and obtaining the level is too expensive then the professional should consider whether it should accept the appointment at all.