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AN08.02.100

January 2007 Previously published July 1997

PracticeNote

Architects’ liability

Purpose with the standards of a reasonably competent

architect.
The purpose of this note is to alert architects to
some situations where liability may arise in The standard can be subject to change. If
contract and/or the tort of negligence. architects enter agreements demanding a
higher standard, or acknowledging a higher
Introduction standard claimed by the architect in running the
project, the higher standard will apply. For this
Liability, the obligation to compensate someone
reason, and others, it is important to read client-
else for loss or damage, is a major concern for
produced contracts very carefully. A warranty
architects. The main types of architects' liability
that the building will be finished on a certain
are breach of the client and architect agreement
date, or an undertaking to work to 'the highest
(which is a breach of contract) and the tort of
standard', might make architects liable when
negligence (professional negligence). Usually
they would not be otherwise, and therefore not
claimed alongside it is breach of the
covered by insurance
Commonwealth Trade Practices Act (TPA) or
the equivalent under state/territory Fair Trading
Liability for negligence
Acts. Other types of liability include breach of
copyright and defamation. Only liability in Torts are civil wrongs. They don't depend on the
negligence is discussed in detail in this note. existence of a contract, although they can co-
exist with actions for breach of contract.
Liability in contract Negligence is actionable carelessness. The
elements of negligence are that the defendant
The elements of breach of contract are the
must owe the plaintiff a duty of care, the
existence of a contract and a failure to fulfil its
standard of care must have been breached and
terms. It is not necessary to prove that the
the plaintiff must have suffered loss or damage
plaintiff has suffered loss or damage, although
which is causally related to the breach.
this will be relevant to the amount and type of
compensation awarded. In most contracts it is
Standard of care
no defence to say that the defendant acted
reasonably. The legally required standard of care for an
architect is that of a reasonably competent
Real contracts between professionals and their
architect.
clients reflect the fact that there are many
matters over which the professional does not
Students and recent graduates
have complete control. As professionals,
architects usually contract to provide services in Where damage is done to someone who was
accordance with a generally accepted standard aware that they were engaging an architecture
prevalent in their profession and for which they student, the responsibility of the student is likely
can obtain insurance. An express term of this to be less than that of a reasonably competent
nature is in the RAIA/ACA Client and Architect architect.
Agreement 2005:
Where the injury or damage is done to a third
‘the Architect must exercise the skill and party—for example, a brick drops on a
care of a reasonably competent, registered pedestrian—it is unlikely that the standard will
architect...’ be lowered. In certain situations, reasonable
people must enlist the help of experts. Students
In the absence of an agreement in writing, a
should be aware that when they are undertaking
court is likely to find that there was an implied
work which is beyond them, they must get help.
term in the contract between the architect and
client that the architect would act in accordance

Published by RAIA Practice Services © RAIA ABN 72 000 023 012

 AN08.02.100 January 2007 2

Where a student or recent graduate is employed writing stating why it is required, and if a
by a firm of architects, the standard to be disclaimer is made when the advice is received,
reached is clearly that of the reasonably tell your client.
competent architect. The firm must therefore
Although, there is a world of difference between
ensure that the student is properly supervised.
casual statements on social or informal
occasions and serious communications
Duty of care
warranting reliance, architects should act
A duty of care is an obligation not to cause harm cautiously. The person who seeks your advice
to someone else. at a cocktail party, knowing you are an architect,
might rely on it to their detriment. To be on the
Originally it was though that the duty of care
safe side, either don't advise, or make a
was imposed only on those whose business or
disclaimer that tells the listener they cannot rely
profession it was to provide information or
on your advice.
advice which requires special skill or care in its
preparation; a class which clearly includes This rule has been applied and interpreted in a
architects. However, the law in this area has wide variety of different circumstances.
developed significantly in recent years and it is Architects have been liable in cases involving
now clear that liability is not limited to a defective building work, building failures and
particular situation or a particular class of different types of loss, such as physical injury or
persons. A defendant will now be held to owe a pure economic loss, such as loss of income.
duty where he or she knows or ought to realise
that their statements are likely to be relied upon To whom is the duty of care owed
by the recipient. The reliance of the recipient
The first question to be asked in determining
must be reasonable in the circumstances.
whether a duty of care is owed is whether the
Where a statement is made in a serious
risk of injury to the plaintiff (or a class of persons
business context in relation to a business
of whom the plaintiff was a member) was
matter, such as by an architect in the course of
reasonably foreseeable. Where there is a
acting for a client, a duty will be owed.
contract for the provision of professional
architectural services it will almost always be
Liability for free advice
the case that loss to the client is the reasonably
When advice is paid for it is compelling foreseeable consequence of negligent
evidence that both the speaker and listener performance by the architect.
expect the advice to be relied upon. However
Where the test of foreseeability is met there is a
there are also myriad circumstances where the
further requirement that it is reasonable that a
listener can successfully sue for free advice.
duty of care be imposed upon the defendant in
Architects can be liable for negligent words
all of the circumstances. The contractual
which cause economic loss and which are said
professional relationship is relevant to this in the
in circumstances where the parties had reason
case of architect and client. The same tests are
to rely on them. The fact that the advice is given
applied to building users. The fact that a building
gratuitously will not excuse the architect.
user could be injured would be relevant to a
There are two major implications. First, give a consideration of whether the tests were met in
disclaimer when advice is provided without the specific circumstances of injury to a building
charge or when a report is written that might be end user. There are many examples where the
widely circulated. For example: duty of care has been applied.
‘This (report) is prepared for the use of
Has the standard of care been breached?
(client) by (architect). No one other than
(client) may rely on it and (architect) does This requires the court to consider what the
not accept responsibility to any other user.’ reasonable person having the skills of a
reasonably competent architect would have
It is important to note that disclaimers do not
done in response to the reasonably foreseeable
always work. However, in circumstances such
risk. The court would evaluate this in terms of
as this, the existence of the disclaimer may
the state of industry knowledge at the time the
make it more difficult for any potential plaintiff to
relevant decision was made. At this stage the
establish that they reasonably relied on the
court would weigh up such factors as the
architect's advice.
magnitude of the risk, the gravity of the likely
Secondly, when getting information from those harm and the burden upon the defendant of
who have neither statutory nor contractual taking precautions.
obligations to provide it, make the request in
 AN08.02.100 January 2007 3

What mistakes lead to liability? documentation are not corrected as they

emerge.
Architectural practice is complex and requires a
degree of skill and diligence much higher than There is a common misunderstanding that the
many occupations. It therefore provides many end of documentation brings to a close all
opportunities for mistakes that may lead to design. This is rarely so. It is of benefit to the
liability. Extreme care needs to be taken to only client for the architect to be able to assist the
provide services within your expertise. This contractor in making final decisions regarding
does not mean your own or your colleagues’ the selection of building elements or systems
view of your skills but the ordinarily accepted during the construction process. The selections
skills of an architect, for which professional considered at this time often impact on earlier
indemnity insurance (PI) can be obtained. The design decisions which may need to be revised.
following are some examples of situations which
It is best to undertake full services if possible,
can lead to liability:
but if it is not possible, care should be taken in
documentation to avoid matters that might lead
Pre-purchase and other inspections
to problems later. Your fees should reflect the
Pre-purchase and similar inspections are not extra 'hand over' work to minimize your risk that
recommended, when there are specialists in this has to be undertaken when you are engaged for
activity readily available to your client whose only partial services.
report you can refer to in your advice. Such
inspections are relatively high risk, particularly Inspection only – when documents have
where access to parts of the building or its roof been prepared by others
or sub-floor is limited and you are not well This is substantially more difficult than
practised at this activity. Potential problems with inspecting a building you have designed. You
a building are not limited to termites, borers and don't know it as well, and the potential problems
presence of asbestos – they are many, and may not be as obvious. Your fees should allow
expensive consequences can arise from an for extra time to become familiar with the
erroneous assessment. Very few PI insurers documents needed to minimize your risk.
consider pre-purchase inspections part of an
architect’s normal activities, so you are unlikely Certification without full inspection and
to be covered unless your broker or insurer contract administration
confirms that you are. Also, some states and
territories require a licence to conduct property It is hard to imagine circumstances that justify
inspections – the relevant state building the risk in this practice and it is not
regulator or consumer affairs department should recommended. You are being asked to certify
be consulted. matters about which you will almost always
have insufficient information.
Valuations
Pro bono services
Valuation is another high risk activity. You
should not allow your client to be misled into Donating services does not make them any
thinking you are able to provide reliable advice. safer because your liability is the same. While it
Only licensed valuers can provide sworn is possible to limit your liability it should be done
valuations. Architects PI is very unlikely to cover in writing with legal advice.
you for giving valuation advice. Continuing Professional Development

Sketch or development documents Self directed study of this Advisory Note may contribute to
The risk is not as high in this area as in some an architect’s annual CPD requirements. Refer AN03.01.100
others, but if you fail to provide the service RAIA Continuing Professional Development for more
required by your client and a delay is caused information. Acceptable CPD activities must be contained
which results in a loss, legal proceedings could within one or more of the competencies listed in the AACA’s
result. ‘The National Competency Standards in Architecture’,
available on their web site www.aaca.org.au.
Design and documentation without contract This Advisory Note addresses the topic of Practice
administration Management 4.1.4.137.
This form of service produces a
This document is issued by the RAIA for general guidance only.
disproportionate number of legal claims,
It does not provide legal, insurance, or other advice able to be
probably because the architect is not there to
relied on in specific circumstances. No responsibility for its
see the contractor's mistakes as they occur, but
accuracy or currency is accepted by the RAIA, its office-bearers,
also because any discrepancies in
members, RAIA staff, or by its author(s).