Liability Reform Issues Gain Traction in South Carolina, Ohio


Tort reform efforts are gaining steam in South Carolina and Ohio, where the AIA components have joined broad coalitions to see that changes are made to their state’s liability laws.

Among the provisions the architects are seeking to impose are statutes of repose—measures that bar actions against architects and engineers after a certain period of time following the completion of services or substantial completion of construction. The rules vary from state to state in their scope and coverage. Some states do not have statutes of repose currently on their books or are fighting to reinstate them.

Such is the case in Ohio, where the work of the AIA and its coalition partners has pushed tort reform legislation through the state senate. Its House Judiciary Committee is holding a series of hearings on a new comprehensive package of tort reform measures that includes a broad 10-year statute of repose for architects. Although a previous court struck down their prior measure as unconstitutional, AIA Ohio is optimistic that a new configuration of justices will interpret the law differently if it is challenged. Specifically, AIA Ohio’s Web site notes that the proposed legislation will:

  • Establish a “statute of repose” for products and construction
  • Establish a cap for non-economic damages in all tort actions
  • Place limits on punitive damages in all tort actions
  • Eliminate the “collateral source” rule, informing juries of plaintiffs’ recovery of compensation from multiple sources
  • Create a provision requiring approval of attorney fees that exceed certain damage caps.

AIA South Carolina recently presented Gov. Mark Sanford with an Honorary Affiliate Membership for his support of issues affecting the architecture profession and the creation of a better built environment. From left to right are Mark Clancy, AIA, AIA/SC Government Affairs director, Sanford, Mary Beth Branham, AIA, AIA/SC president, and Eric Aichele, AIA, AIA/SC vice president/president elect.AIA Ohio Executive Vice President David Field said the issue is important to all architects because litigants are going after the “deep pockets” and seeking damages from “everybody they can go after.” This, Field says, is unsettling; particularly for older architects who are no longer practicing or have long relinquished the records for their design projects. He said insurance companies also are pushing for reforms.

Cost of doing business
After working on its own to amend the state’s lengthy statute of repose provisions, this year AIA South Carolina joined a broad-based coalition of business owners, insurance carriers, health-care providers, and others after determining that they needed to step up and take a more active role as an authority on the statute of repose and other issues that relate to the design and construction industry.

“Our leadership comes in the areas where we have expertise, for instance, the statute of repose issue. We currently have a statute of repose in South Carolina of 13 years, and we wanted to get that down to 6. Our neighboring states have statutes of repose of 4, 6, or 8 years. So, from an investment or legal standpoint, it’s more attractive for companies to move to those states than it is to move to South Carolina,” says Mark Clancy, AIA, AIA South Carolina Government Affairs director.

Clancy, a senior associate at LS3P Associates Ltd., Charleston, continues, “When buildings are built and 13 years have rolled around, there are so many issues that come up that are problems at that phase of a building’s life that really have nothing to do with design, but are more to do with maintenance or other issues.” Clancy notes that “when you go so far out, it just makes it so gray that it’s very difficult to establish the true cause of the problem. Also, a lot of products that we specify in buildings have warranties of, say, 5 years, so it doesn’t make sense to hold architects liable for 13. That’s why we picked 6 years.”

The component’s paid legislative lobbyist has testified on the statute of repose and has taken a leadership role in the coalition. Component leaders have also learned the lingo, for example, that “economic development reform” resonates better than “comprehensive tort reform.” Clancy explains that having experts gives the coalition a level of stature to be able to talk in-depth about the specific areas of the legislation. The architects and the allied organizations are also seeking other changes to its tort reform legislation, including sanctions against frivolous lawsuits, reforms that would change the way damages are meted out, a “right to cure” that would give architects the opportunity to make right what is wrong prior to litigation, provisions, reasonable limits on damages, reforms in the laws that govern venue, and pre-certification of suits against architects and other professionals.

System out of balance
No matter how you phrase the issues, “the motivation for this is not only self-serving,” Clancy says. “It’s what is best for the state and the business climate here. We legitimately want to be fair. We do not want to remove ourselves from responsibility that we may have caused. But we find we’ve created a situation in our state where there are significant costs associated with the structure the way it is now, and those costs are inevitably being passed along to our clients and state agencies. We certainly don’t want to prohibit people who are truly wronged from seeking recourse, but we feel that the system is out of balance and hampering the economy in South Carolina.”

Clancy says that studies have shown that the vast majority of litigation has to do with construction defects that become problematic within the first five years of a building’s life. It’s unfair for people who are building projects to have to pay through their architectural fees for insurance premiums that are paying for a tiny percent of litigation that happens way out there at 13 years. It’s to everyone’s benefit for the system to be balanced a little bit better, he says.

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For more information, charts, and statistics about tort reform and statutes of repose in your state contact, AIA Government Advocacy [govaffs@aia.org].

The State Government Network is also a resource for learning more about tort reform and other government affairs issues. Contact AIA Government Advocacy for more information.

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