Need for Green Counsel Becoming Increasingly Salient as Green Claims are Brought Against Design Professionals

I’ve written before about the potential for design professionals to unwittingly expose themselves to unanticipated risks on green construction projects. In a presentation at last month’s 2007 AIA National Convention in San Antonio, Frank Musica, an attorney with a Maryland-based insurance company, provided an overview of twenty-one actual “green claims” brought against engineers and architects. A copy of his PowerPoint presentation is available for download here.

The claims range in size and scope, from a project failing to achieve the level of LEED certification at which the owner marketed it, to a fascinating scenario where the architect specified a (seemingly) innovative exterior solar shading system that turned out to be patented. The owner sued the architect in negligence for not researching whether the system was covered by an enforceable patent and to demand contractual indemnification for intellectual property infringement damages. Other scenarios that Musica described in his presentation involve:

• A school district which brought suit against a design team where energy use on a purportedly sustainable, three school project that included commissioning services failed to “reduce operating costs by fifty percent” over comparably-sized schools as stated in the design team’s contract;

• A homeowner retained an architect for an addition with the goal of improving indoor air quality and reducing energy costs through green design. The architect apparently sold the client on its green expertise and ability to deliver the project within the specified budget. The owner was unhappy with the finished product and sued the architect under the appropriate consumer protection law, claiming fraud in the inducement of the contract and seeking its recission;

• An architect was “impressed” with promotional materials from a green product manufacturer and the owner agreed to use it on the project. However, the product was not readily in stock and project delays ensued. The owner sued the architect on the grounds that the delays stemmed from its failure to inform the owner that delayed delivery was possibility; and

• A variety of other claims involving guarantees of indoor air quality levels, a cork flooring system specification that nevertheless resulted in water retention and a subsequent mold problem, and a dispute over responsibility for the recycling of construction debris as mandated by the local municipality.

Green business risks are real but largely unexplored. What strikes me is that these are actual claims that architects have tendered to their insurance carriers, not pontification from some legal scholar. While we’re still waiting for a court to issue an opinion arising out of a green litigation, it’s clear that design professionals- and indeed all construction project stakeholders- must consider all of a green project’s ramifications when negotiating their contracts or even weighing whether to participate on the job in the first place. For example, Musica recommends that design professionals carefully specify sustainable products by demanding technical data from manufacturers- not promotional materials- and keep their clients informed of any risks that they uncover as they perform their green due diligence. Finally, seeking advice from counsel familiar with green building rating systems and the risks that sustainability presents is an absolute imperative- no matter the business context- particularly given that green continues to rapidly penetrate an increasing number of industry sectors.

• Don't Let Green Design Cause Red Ink (AIA)

• Thoughts from Insurance Industry on Green Building Risks (gbNYC)