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5/5/2013 | Construction Blog

Florida Governor Rick Scott recently signed legislation making a significant chan Rick Scottge  to the potential liability of individuals providing design professional services in the state. The new law, which takes effect July 1, 2013, will enable a business entity to contractually limit the liability of its individual professionals to the extent of that professional’s scope of work performed under the contract. In other words, the individual design professional can now immunize himself for liability in design or project administration. The design firm remains potentially liable.

Although there are several exceptions to the law, it essentially insulates professionals from errors in judgment while performing their work. Those favoring the law, and others like it, contend that this type of tort reform will allow design professionals to act more freely and encourage them to take more of the type of risks that make projects better. The byproduct could be more construction work1. Generically, tort reform is also often thought by supporters to prevent professionals from quitting the profession due to rising malpractice claims and associated insurance premiums. Opposition to the law argues that elimination of the risk of having to answer for your mistakes personally encourages the type of risk-taking that should not occur in the end. This type of rule also fails to recognize a difference in degree, which is to say that a $200 mistake is different than a $2 million mistake.

In addition, the Florida law leaves some important questions unanswered. For example, is a design professional firm of 1 essentially now able to prevent any claims of malpractice against itself? What is the application of the gist of the action doctrine in such cases? Other larger public policy questions surrounding the issue of how this will impact the professional malpractice insurance industry also remain unanswered.

In the end, it may be wise to pass legislation that permits a little more risk taking in order to promote growth in the industry. It is too early to tell whether Pennsylvania will follow Florida’s lead, but if it chooses to do so perhaps a different approach or a more thoroughly developed law would be in order.