Client Ask for Engineer Autocad Drawings

Technology changed the way we think about everything. Ironically, some of the most technologically advanced professionals – architects and engineers – frequently fail to think about their professional liability risks created by the technology used during the construction process.

For example, a escalating trend for the last 10 years has been for clients to demand design professionals deliver their computer aided design (CAD) files both during the design phase and along with final, sealed construction documents.

This trend will only continue because CAD systems, previously cost-prohibitive, have become readily available to virtually everyone involved in the construction industry.

Clients and other third parties know that a design professional can now simply click and send their entire CAD file to virtually anyone in a matter of seconds.

That simple click-and-send step, however, can have serious legal consequences for unwary design professionals who have failed to negotiate strong contracts or obtain signed releases and indemnity agreements.

CAD systems have changed the construction process. They provide an efficient platform to facilitate the entire construction process. Changes during the concept and design phase, or changes need in the field during the construction phase, can be made quickly and easily.

CAD files, however, now make duplication and manipulation of designs relatively easy for anyone with access to the files, creating significant copyright issues for the design professional as well.

So what steps can a design professionals take to mitigate their professional risk from sharing CAD files and protect their copyrights?  Unfortunately, there is virtually no case law or statutes, and few industry standards, setting forth the standard of care for professionals who voluntarily or contractually chose to deliver CAD files to client or third party.

Generally, "professional negligence" represents a special case of negligence in which society holds members of a profession responsible for meeting a standard of care and competence. Black's Law Dictionary defines malpractice as:

"Professional misconduct or unreasonable lack of skill. Failure of one rendering professional services to exercise that degree of skill and learning commonly applied under all the circumstances in the community by the average prudent reputable member of the profession with the result of injury, loss or harm to the recipient of those services or to those entitled to rely upon them. It is any professional misconduct, unreasonable lack of skill or fidelity in professional or fiduciary duties, evil practice, or illegal or immoral conduct."

Just like old-school blueprints, CAD files are copyrighted instruments of service. Release of CAD files, therefore, is a matter that can, and should, be specifically negotiated in advance between the parties. However, experience reveals that few design professionals currently do so, and even more misunderstand their legal liability when they do deliver CAD files in one format or another.

Every design professional is wise to rely on industry standard contracts. For example, these standard templates include the American Institute of Architects (AIA) contracts available from the American Institute Of Architects; Engineers Joint Contract Document Committee (EJCDC) contracts available from the National Society of Professional Engineers; or alternatively, ConsensusDocs.

Each of the industry standard contracts have their own unique advantages depending on the circumstances. While sometimes the language of these contracts should be changed, design professionals should rarely negotiate terms different from these form contracts without the advice and counsel of an experienced attorney in the industry.

Unfortunately, none of these industry standard contracts specifically address the delivery of CAD files. Industry best practice suggests that any terms of engagement should make clear whether the design professional retains his intellectual property, and that this includes CAD files.

While some design professionals and insurance industry professionals contend that best practice is to avoid delivery of CAD files altogether, or at minimum delivery only .PDF copies and not the full .DWG files, reality suggests that clients who demand CAD files will find a design professional willing to deliver them in their native format, or move on to the next professional who will.

A design professional that agrees to deliver CAD files, should clearly set forth in their contract with the client under what terms and at what additional cost. While every circumstance is different, a design professional should consider after consultation with an experienced attorney including in either the original contract document or an exhibit required by contract to be signed by both parties prior to deliver and receipt of the CAD files, terms such as:

• All CAD files are instruments of service of the design professional, who shall retain all common law, statutory, and other rights, without limitation, including copyrights;
• The Client agrees the CAD files are not certified documents;
• The design professional makes no representations, warranty, or guarantee as to the compatibility of the CAD files with any hardware or software, or from modification or conversion of the CAD files into another format;
• The Client shall not use the CAD files for any purpose other than the project;
• The Client shall not transfer the files to anyone without the prior written consent of the design professional;
• The Client shall waive all claims against the design professional arising from unauthorized changes to or use of the CAD files;
• The Client acknowledges that differences may exist between the CAD files and the signed and sealed construction documents, and where such conflicts exist, the Client agrees the signed and sealed hard-copy construction control;
• The Client agrees that delivery of the CAD files does not constitute a sale or transfer of ownership by the design professional, who shall retain all ownership to the CAD files set forth in the contract, if any, including the right to demand their immediate return;
• The design professional by delivering the CAD files to Client makes no express or implied guarantees or warranties as to the files' accuracy, title, non-infringement, and completeness, or merchantability and fitness for any purpose;
• The design professional shall not for any reason be liable for direct or indirect consequential damages caused by the Client's use or reuse of the CAD files.
• The design professional reserves the right to remove from the CAD files all indicia of ownership or involvement by the design professional;
• The Client agrees the design professional has made no representations or warranties other than those set forth in this agreement;
• The CAD files shall not be considered contract documents;
• The Client agrees to defend and indemnify the design professional against all damages, liability, and costs, including attorney fees and litigation expenses, arising from (1) changes made to the CAD files by anyone other than the design professional, or (2) the transfer or reuse of the CAD files by anyone without the prior written consent of the design professional;
• The Client shall be obligated to pay any licensing, copyright, or other fees due to third parties arising from the transfer of the CAD files, and shall defend and indemnify the design professional from all claims of any kind arising from the failure to pay such licensing, copyright, or other fees owed.

Any design professional who agrees to release CAD files should be aware of the numerous, unpredictable risks associated with doing so.

• Stripping out indicia of ownership and involvement (ie., company logo, name, address, etc.) alone likely does nothing to eliminate or reduce potential legal liability contrary to what seems to be a common misconception among design professionals;
• Contain notes that may not appear on any plan, which could create unforeseen exposure for liability and privacy issues;
• Unintentionally disclose that other contractors or subcontractors previously unknown to the Client were involved in completing the CAD files;
• A strong defense and indemnity agreement signed by the Client can afford some protections but itself will do nothing to prevent a third-party from asserting a lawsuit against the design professional and still must be enforced against the Client who refuses to honor its terms;
• Some state and federal laws may overrule and render void indemnity agreements, warranties, and other disclaimers

Every design professional should anticipate clients that demand CAD files likely will become commonplace over the next few years.

As a result, they should plan now how best to respond to this trend, including engaging in internal planning and detailed discussions with their insurance broker and experience legal counsel to develop appropriate internal policies and procedures to avoid liability and protect their copyrights as part of their overall risk mitigation strategy.

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Timothy B. Soefje is the Man aging Member an d head of the professional liability and construction defect group at the boutique firm of Seltzer Chadwick Soefje & Ladik, PLLC based in Dallas, Texas. He is admitted in Texas and Oklahoma. For regular information about professional liability matters, follow him on Twitter at @TimSoefje and search #ProfessionalLiability. For more information, visit us at www.realclearcounsel.com or contact him at tsoefje@realclearcounsel.com.

Samuel P. Baldwin is Of Counsel  at the boutique firm of Seltzer Chadwick Soefje & Ladik, PLLC based in Dallas, Texas. He is admitted in Texas. His practice focuses on the defense of professional liability, construction defect, and complex commercial litigation claims. For regular information about professional liability matters, follow him on Twitter at @Sam_Baldwin5 and search #ProfessionalLiability. For more information, visit us at www.realclearcounsel.com or contact him at sbaldwin@realclearcounsel.com.

Managing Member of Seltzer Chadwick Soefje & Ladik, PLLC and head of the firm's professional liability litigation group, including the defense of architects, engineers, design professionals, lawyers, insurance brokers/agents, medical, and other miscellaneous professionals. I also represent corporate and individual clients in large, complex construction and business litigation, premises liability, medical malpractice, trucking litigation,and catastrophic personal injury matters. Rated AV® by Martindale-Hubbell® Peer Review Ratings™, the highest rating attainable, he is also a member of the exclusive Texas State Bar College. View all posts by Tim Soefje

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Source: https://professionalliabilityupdate.com/2018/05/14/delivery-of-cad-files-to-clients-creates-liability-for-unwary-design-professionals/

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