Architects who have never been apart of a professional liability claim should consider themselves to be lucky individuals. Those that have know how ugly a lawsuit can turn. The case usually takes over all parties involved emotionally and financially. By the time the lawsuit settles, the person who comes out on time figures out the end settlement wasn’t worth the trouble it caused tot heir families. The fallout from a court trail tends to be broader, as well. After each side completes bringing in the big guns, any remaining hope of ever piecing together a friendship again is shattered. For all the reasons listed, close to ten years ago now, insurance companies began requesting that their policy-holders try to utilize mediation to settle claims outside of court.

This is a voluntary, nonbonding process that consists of hiring an impartial third party to help resolve the ongoing conflict. This usually takes a day. During the late 1980s, architects began become told about the usage of mediation to clear disputes. Most of them were scared away at the idea. Even though it soon became a widely accepted practice, architects still looked down upon it thinking it was a sign of weakness. If they needed the help of someone it could mean they didn’t have a strong case. While the litigation-happy environment grew out of a number of failed condo projects in the early 90′s, that very attitude began to change.

Soon the architecture firms learned that all these court trials were expensive and very time-consuming. In present day, mediation is normally a set standard, and most AIA contracts contain a clause that mandates mediation as a first resort. Mediation is not the solution in every court case that spans from architecture, however. Frank Musica, who works as a risk management attorney at an accredited law institution, claims that in the case of a clear-cut designer error, it is better to rectify the problem post-haste. On the other hand, if a designed firm is being drug into litigation for ridiculous reasons, then they should avoid mediation. An example of this is a construction worker seeking more money in damages then workers’ compensation would allot.

Among the 4,500 claims filed each year, less then 1 percent actually go to litigation. They are either mediated, which 80 percent of the cases were done so successfully, or settled in court. Even with professionals who main field lies within the judicial system, mediation is simply a part of the protocol. The natures by which these cases come about is usually well suited for mediation. Normally the dispute is over work quality and cost, and the lines of responsibility for project management often overlap. Sometimes there is a peaceful resolution to these cases. Other times it doesn’t finish so friendly and the sides no longer remain friends. All these reasons make one seriously consider taking a second glance at the rules and regulations that should be followed when constructing a building. An architect has to be in top notch form to avoid never getting drug into court.

By: Laura J Miller

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The case of Lambson Fine Chemicals Ltd v Merlion Capital Housing Ltd [2008] involved fraudulent misrepresentation and deceit in a commercial contract case for the sale of land. The claimant in this case was a company that specialised in chemical manufacture and production.

The land which was sold by the claimant was a 40 acre site (“the Property”). The claimant had owned the Property for many years, and subsequently sold it to the defendant. However, the claimant then leased the Property back for around 15 months in order to carry out a number of demolition projects.

Part of the purchase price was retained by the defendant. The claimant subsequently commenced proceedings for the outstanding sum of money.

The defendant argued that it had entered into the sale agreement with the claimant in reliance upon a written representation made by the claimant as to the extent of the chemical contamination at the Property. It contended that the written representation was fraudulent due to the fact that after the sale the defendant found the property had been extensively contaminated with cyanide, especially the central areas.

The court held that on the evidence it was clear that it was known to everyone that the Property was heavily contaminated. There had been widespread chemical contamination across the entire site. Accordingly, the court was of the opinion that the representation made was accurate. It should be noted however that had a more specific question been asked about the central areas, a different answer might have been obtained. Despite this fact, it did not mean that there was any fraud or deceit, which accordingly meant that there was no actionable misrepresentation.

Tags: Central Areas, Coopers, Fine Chemicals