Update
Construction industry association ACE (Association of Consulting Engineers) is lobbying the government to change liability laws to combat the spiralling costs of professional indemnity insurance.
The Association of Consulting Engineers (ACE) said it was calling on the government to introduce a Bill to change the law on joint and several liability in the construction industry.
Under current rules, any part involved in a construction project can be 100% liable for a claim made about any aspect of the operation.
ACE said problems arose when one party involved in a construction project went into liquidation, leaving other parties who may not have been at fault facing large claims.
What ACE is pushing for is a switch to limited liability where the architect or engineering consultant can only be liable for their portion of the project, or their role in the cause of the claim, explained an ACE spokeswoman.
But the changes would only apply to relations between those involved in a project. Anyone outside the actual construction project would not have to limit the size of their claim to the ‘fault’ of those parties still in existence, said ACE.
As part of the campaign, ACE chairman David Upton and chief executive Nelson Ogunshakin met construction minister Nigel Griffiths MP earlier this month to discuss the issue of PI premiums.
“The current situation is unsustainable,” said Ogunshakin. “UK engineering consultancy firms are facing intolerable business pressures, brought on by PI insurance premiums which in some cases are equivalent to up to 6% of their annual turnover.
“The current system of joint and several liability discriminates against firms, irrespective of blame, making them responsible for the failings of other parties over which they have no control.
But Mike Pummell, executive director of PI broker Alexander Forbes said a change from joint and several liability would have little effect on PI premiums for the industry.
“This change would not make a huge difference to PI premiums,” he said. “If the legal liabilities of those involved in construction projects could be more clearly defined it might help a bit.
“But there are still an awful lot of claims that the insurance industry would have to pay.
