Navigating Design Liability for Potential Climate Change Conditions

The uncertainties related to climate change pose significant liabilities for design professionals who fail to take steps to limit their exposure. Design professionals are not climatologists. Projects can be designed to address climate-related changes, but only if others identify the specific changed conditions to be addressed by the design, and the specific changed conditions are properly memorialized in the contract documents. This article will discuss recent developments, suggest practices for limiting design exposure, and provide examples of contract language to reduce risk.

The Evolving Requirements for the Standard of Care Related to Climate Change

The typical standard of care requires the design professional to perform services with the professional skill and care ordinarily provided by like design professionals in the same or similar locality under similar circumstances. Frankly, that standard is vague, subject to hugely differing interpretations and opinion (especially in the event of a dispute), and of  limited value with regard to liability for project impacts caused by future climate change.

Code compliant design is a minimal threshold; it is not a “safe haven” shielding design liability. Building codes are based upon historical information. Potential impacts from climate change, however, are based upon future projections such as rising sea levels, mean temperature changes or projected increases in the frequency and severity of hurricanes. No one can accurately forecast future environmental impacts and design professionals are no exception.

Recent pronouncements by various associations and industry groups add additional perspective. By example, in a 2023 podcast entitled the “Winds of Change,” the American Council of Engineering Companies (ACEC) suggests that climate change “may require” the design to address increasing storm frequency or, at least, discuss the possibility with the client. Engineers Canada now incorporates, as part of its code of ethics, the integration of climate adaptation and resiliency into design practice.

In 2021, the American Association of Civil Engineers (ASCE), issued a policy statement that “engineering practices and designs must be revised and enhanced to address climate change.”  The American Institute of Architects’ (AIA) Ethical Standard 2.4 states that members should make “reasonable efforts” to advise their clients concerning obligations to the environment including a build environment resistant to climate change. Likewise, AIA’s Ethical Standard 6.5 states that members should incorporate adaptation strategies with clients to anticipate extreme weather events.

Plaintiffs’ counsel and experts will argue that design professionals may and should be held liable for failing to consider future impacts from climate change or to advise their clients of the potential for such impacts. Currently, there is no published case law directly on point. It is possible, however, that a court will eventually issue a ruling holding that the standard of care requires design professionals to anticipate climate change conditions and address such impacts in their designs. Accordingly, it is important to proactively take steps to mitigate exposure to such claims.

Risk Mitigation Strategy

Decisions concerning future climate resilience must coincide with a project’s other design objectives and budget. Two primary considerations are the project’s anticipated lifespan and susceptibility to current and changing environmental impacts. Obviously, the project’s location and purpose play a significant role.

The first step is addressing the issue with the client.  What relevant climate-related concerns exist? By example, if the project is for water or power generation, depending upon the anticipated lifespan, rising temperatures could require additional capacity. Rising water levels could be a concern for tunnels, bridges, wharfs and underground structures, not just for projects located in a flood zone or near open water.

The designer should raise the issue, but the owner should ultimately determine what  specific climate-related impacts exist and which concerns, if any, should be addressed by the design. Again, design professionals are not climatologists. If the client is concerned, by example, about the potential for rising sea levels, the client should be advised to seek advice directly from someone with the credentials and knowledge to provide a reasoned opinion. If the designer directly hires the climate consultant as a subconsultant, the designer could be, at a minimum, vicariously liable if the climate consultant’s advice is flawed, and a claim is raised. The best practice is to have the owner hire the climate consultant directly without the design team’s involvement. Based upon the advice from the client’s consultant, the client can then instruct the design team to prepare a design that addresses the client’s concerns.

The goal is for the owner and or its directly retained consultant to decide and to define the  anticipated climate change conditions that need to be addressed by the design. Once that happens, then make sure the specific conditions to be addressed by the design are memorialized in a writing that will properly attribute those decisions to the owner and or its consultant and provide a waiver of liability to the designer for impacts caused by other potentially changed environmental conditions.

Contract Language Limiting Liability  

The contract for design services should include language that clearly limits the design team’s liability. If the owner has not asked the designer to address potential climate change conditions in the design, the contract should specifically disclaim all design responsibility for such changes. In the alternative, if the owner has asked the designer to design for climate change conditions, the contract should identify, as specifically as possible, the potential changes contemplated and those the designer has been asked to address through the design.

Key points for a complete disclaimer include:

• Owner and Designer have discussed whether the project should be designed to meet potential climate change conditions.
• The Owner has directed the Designer not to design for potential climate change conditions.
• The instrument of service do not anticipate or provide for potential, future impacts to the project due to climate change conditions.
• Potential impacts to the project for future climate change conditions are unknown.
• Forecasting climate change conditions are beyond the expertise of the designer.
• The parties agree that forecasting future climate change conditions that could impact the project are beyond the applicable standard of care for the design professional’s work on the project.

Below is sample contract language for a complete disclaimer:

DISCLAIMER OF LIABILITY

The Parties have discussed whether to design the Project to withstand potential, future climate change conditions. The Owner has decided not to do so. As such, the instruments of service for this Project DO NOT anticipate or provide for potential, future impacts to the Project due to climate-change conditions. Potential impacts to the Project from future climate-change conditions are unknown, and the Parties hereby specifically acknowledge and agree that forecasting unknown climate-change and/or designing the Project to address or mitigate such unknown changes are beyond the expertise of Designer and are also beyond the applicable Standard of Care for the Design Professional’s Work on this Project.

In the alternative, if the owner has asked the designer to address specifically identified potential climate change conditions, the key points should include:

• The designer shall include design elements for the Project to address and/or mitigate only specifically identified potentially changed conditions [which will be listed.]
• The anticipated life expectancy of the project is ___ years after completion.
• The designer disclaims design liability for all other potential climate change impacts.
• The owner waives all claims and/or causes of action of any kind against designer related to impacts due to climate change conditions except those conditions identified herein and that occur within the life expectancy of the project.
• This agreement to design to specified potential climate change conditions shall not extend any applicable statute of limitations or statute of repose.

Below is sample contract language if the owner has specified climate change conditions to be addressed by the design:

DISCLAIMER OF LIABILITY

The Designer shall include design for the Project to address and/or mitigate the Owner’s specifically identified climate-change conditions for the Owner’s stated life expectancy for the Project (but only within the limits of the Designer’s applicable standard of care). The Designer hereby disclaims any responsibility or liability for climate-change impacts to the Project other than the Owner’s specified, maximum changed condition(s) during the Owner’s anticipated life expectancy of the Project as set forth herein. The Owner hereby waives all claims and/or causes of action of any kind against Designer related to impacts from climate-change except for those specified herein.

Please contact William J. Tinsley, Jr.,  Larry Borda or any member of the Phelps Construction/Design team if you have questions or need advice or guidance.