Architects: Beware of Taking on Net-Zero Liabilities

Funders and developers are increasingly expecting new buildings to meet challenging net-zero targets.  This is an admirable and desirable ambition – but what happens if a completed project fails to live up to its promise? Could architects find themselves on the hook for overly onerous liabilities they hadn’t intended?

With the climate challenge firmly focused on the construction sector, architects winning contracts are routinely expected to design buildings which meet ambitious net-zero targets.

This may include creating designs which facilitate modern methods of construction (MMC), ensuring a building’s sustainability years into the future or enabling future repurposing or recycling of materials when the building reaches the end of its design life.

Architects are expected to design-in energy efficiency – including using emerging technologies such as heat pumps to ensure efficient heating and cooling systems and to specify sustainable materials.

All of these will make the completed buildings more attractive to their tenants or owners - increasing their value and yield for years into the future.

On the flip side, we’ve seen the risks faced in specifying materials dramatically increase – as horribly exposed by the Grenfell tragedy where a retrofit cladding solution to improve insulation and energy efficiency had the unintended consequence of making the building a fire hazard

We’ve also seen the long-term liabilities faced by architects increase following the introduction of the Building Safety Act 2022.  This brought about changes to the Defective Premises Act whereby the limitation period is extended from 6 years to 15 years for prospective claims on buildings completed after 28 June 2022 or 30 years for retrospective claims.  For details on recent changes to the limitation periods in Scotland and how they differ to the rules in England, please click here.

The courts have also shown a greater willingness to hold building owners liable for past mistakes - which many may seek to pass on to their professional partners with the deepest professional indemnity insurance pockets, including architects.

So increasingly architects must ensure they are not assuming contractual liabilities which could come back to bite them years into the future.  They need to ensure the fee they are being paid today is commensurate with the risks their practices are assuming.

At Howden we have a team of legal and technical claims specialists focused on the construction sector, including architects, engineers and other specialists, who can review our clients’ contracts to ensure they are not taking-on overly onerous contractual liabilities. 

At times architects can be reluctant to challenge employers’ contract terms for fear of missing out on a major project – but we have found that agreeing balanced terms with employers is always a good thing.  And would you really want a contract that exposes your firm to high-risk, long-tail liabilities no matter how attractive the project?

If you would like to find out more, please speak to your usual Howden contact, who can put you in touch with our contract review team and ensure your business enters into contracts on a fair and balanced basis.