This paper outlines principles supporting the position that limiting liability in professional consulting contracts is in the public interest and supports fair and balanced contracts.

Public procurement and contracting are in the public interest when practices assure:

• Access to qualified proponents, including speciality practitioners.
• Sufficient local market capacity to deliver government’s programs.
• Responsible use of public funds (value for money).
• Local economic benefit from invested funds.

To deliver the public interest mandate, a thriving and competitive market is imperative. This paper explores how disproportionate allocation of risk to consultants (both Architects and Consulting Engineers) in public sector contracts may restrict competition and undermine the public interest.

The paper further considers how unlimited liability impacts innovation and how consulting firms manage risk, including mitigation strategies like avoidance through withdrawal from competition, and risk transfer through use of insurance.

The paper concludes with a market scan of standard form contracts in use by public sector agencies that limit consultants’ liability to the public agency, as well as circumstances where public sector agencies accept limitations of liability.

The intention of this paper is to support members of ACEC-BC to collaborate with their clients to develop contractual language that achieves both a public interest mandate and a healthy, diverse consulting industry. Proportional allocation of risk is imperative to supporting diversity of practice and the public sector’s aspiration to build strong, sustainable, and resilient public infrastructure.

Note: Members interested in this topic may wish to consult the ACEC-BC Position Paper on Limitations of Liability.

Edition Editors:

Caroline Andrewes, P.Eng., CPA, CMA, Neil Cumming, FACI, FEC, P.Eng., Tim Stanley, P.Eng.

Edition Reviewers:

Kathryn Ekman, P.Eng., Matt Gellis, P.Eng., Rob McLeod, CAIB, CIP, Kip Skabar, P.E., P.Eng., ENV SP

The development of this paper benefited from consultation and advice from partners including Maura Gatensby, Architect AIBC CP (Architectural Institute of British Columbia), Tanya Sadlo LL.B., Jeannine Tse, and David Wende, LL.B., CPA (Hon.).