|May 16, 2013|
Previously published on May 10, 2013
On April 24, 2013, Florida Governor Rick Scott signed into law Senate Bill 286, which provides the conditions under which a design professional (i.e., an architect, engineer, interior designer, landscape architect, surveyor, or geologist) may not be held individually liable for damages resulting from negligence under a professional services contract.
This new law, which goes into effect on July 1, 2013, provides that the individual design professional can avoid individual liability for negligence under the following circumstances:
- The contract is between the design professional’s business entity (i.e., employer) and the claimant for provision of professional services to the claimant
- The contract does not name as a party to the contract the individual employee or agent who will perform the professional services
- The contract includes a prominent statement, in upper case font that is at least 5 point sizes larger than the rest of the text, that pursuant to this statute an individual employee or agent may not be held individually liable for negligence
- The business entity maintains professional liability insurance required under the contract
- The damages are solely economic in nature and not for personal injuries or damages to property not subject to the contract.
To receive the protection under this statute, it is important that a contract strictly comply with the statute.
The protections afforded under this statute do not apply to lawsuits by third parties against the individual design professional and does not cover claims for personal injuries against the design professional.
The impetus for this legislation was, at least in part, Witt v. La Gorce Country Club, 35 So.3d 1033 (Fla. 3d DCA 2010), which was decided by the Florida Third District Court of Appeals on June 9, 2010. In Witt, a geologist was held individually liable for more than $4 million in damages even though his employer had a limitation of liability clause in their contract with the client.
However, it provides substantial additional protection to design professionals arising out of contractual risks. Essentially, this new statute recognizes the design professional employer’s right of “freedom of contract” with its client to avoid individual liability of its design professionals.