Certificate of Merit: Fighting Frivolous Claims

By Tom Owens

The following material is provided for informational purposes only. Before taking any action that could have legal or other important consequences, speak with a qualified professional who can provide guidance that considers your unique circumstances.

Considering today’s material and labor shortages, inflated project costs and extended project schedules, it’s no wonder that it is more difficult than ever to keep clients happy. Complaints and, eventually, claims regarding faulty design, cost overruns and schedule delays, arise with too many current projects.

Some of these complaints may seem minor to the design consultant; some can seem major. Some complaints allege real errors and omissions on the part of the design consultant. Others seem downright frivolous, a “shotgun” approach reflecting a client’s unrealistic expectations. Remember: The standard of care to which you are held does not include delivering perfection.

You can go a long way toward eliminating frivolous claims by educating clients and other parties to the project on the prevailing standard of care in the design professions. Design consultants do not have to be error-free when delivering their services. They only need to render services with the ordinarily degree of skill and care that would be used by other reasonably competent practitioners of the same discipline under similar circumstances, taking into consideration the contemporary state of the art and geographic conditions.

Certificate of Merit Legislation

How do you fight frivolous claims? A number of states have enacted certificate of merit (also called affidavit of merit) legislation. These laws generally require potential plaintiffs, such as project owners, to demonstrate that their claim or complaint against a design professional has legal or technical merit before the claim can move forward.

Typically, in jurisdictions where certificate of merit legislation is in effect, any claim against a design professional must be accompanied by a written certification of merit. This certification must state that the plaintiff or its attorney has consulted a qualified, independent third-party professional practicing the same profession as the defendant, and that this party concluded that the claim is reasonable and has merit. In some states, the affidavit must also specify at least one negligent   act, error or omission the plaintiff claims to exist. Failing to file a certificate of merit contemporaneously with the complaint may result in dismissal of the claim.

A certificate of merit requirement accomplishes two things. First, it may discourage someone from filing a frivolous claim. Second, if the claimant does obtain a certificate of merit, it indicates to the defendant that there is at least one member of his or her profession who believes the complaint may be valid and who may be willing to opine or testify in court, arbitration, mediation or other form of dispute resolution that the complaint has merit.

Note that in some states, certificate of merit legislation is written specifically to address the liability concerns of design professionals such as architects, engineers and land surveyors. These states include California, Hawaii and Oregon.

In other states, certificate of merit legislation is more broadly written to cover licensed professionals in general. These laws can typically be applied to design consultants who operate in these jurisdiction. States having these more broadly written laws include Arizona, Colorado, Georgia, Hawaii, Kansas, Maryland, Minnesota, New Jersey, Pennsylvania, South Carolina, and Texas.

Most jurisdictions with certificate of merit laws require that another consultant licensed in the same discipline as the defendant declare whether or not a case has merit to proceed through the civil system. In other jurisdictions, a screening panel of knowledgeable persons gives its opinions on the merit of the case. Some jurisdictions have the plaintiff’s attorney draft and deliver the certificate of merit and the identity of the licensed professional they consulted remains anonymous. In other jurisdictions, the licensed professional in the same discipline is identified and may actually draft the certificate.

In many certificate of merit jurisdictions, if the plaintiff does not file the required certificate of merit on a timely basis, the defendant is allowed to file a motion for summary judgment. This can be a relatively quick and inexpensive means of getting out of a dispute or claim.

Some states require that the peer reviewer be “actively engaged” in their licensed profession. Others allow retired professionals to serve in this role.

Clearly, certificate of merit laws vary widely from state to state. Some are considered very effective in preventing frivolous claims; others have been called “toothless.” Also be aware that our list of certificate of merit jurisdictions is subject to change as more states (and possibly Canadian provinces) consider them. The current legislation is also subject to change. Texas, for example, recently changed its law by requiring the peer reviewer to “practice” the same discipline as the defendant, rather than just be “knowledgeable” of the defendant’s discipline.

If your practice resides in a jurisdiction that has a certificate of merit law, work with your attorney to determine the specifics of the most current legislation. Learn exactly what is required in order to request, draft and issue a certificate of merit.

If your state does not have a certificate of merit law, you and your colleagues might want to try to change that. A number of state professional associations are working to enact or improve existing certificate of merit legislation. Nationally, the American Institute of Architects (AIA), the American Council of Engineering Companies (ACEC), the American Society of Civil Engineers (ASCE) and the National Society of Professional Engineers (NSPE) have all developed model law language and may help local professional organizations get this legislation on the books. Your attorney and your professional liability insurance companies, agencies and brokers might also be able to help you promote this cause.

Contractual Certificate of Merit

Strong certificate of merit legislation has proven to be an effective tool for combating frivolous lawsuits and claims. However, you don’t necessarily need legislation in your jurisdiction to get the power of a certificate of merit to work for you.

Some design firms have been successful in getting clients to agree to including a certificate of merit requirement in their client/consultant contract. Here are some steps you can take to add this protection from frivolous claims in your client contracts.

Determine whether or not other design firms in your area have been successful in getting certificate of merit language included in their client contracts. Ask your peers as well as local representatives of your professional societies whether they are aware of design professionals who have successfully added a certificate of merit contract clause. Again, your attorney and your professional liability insurance company, agency or broker may be a good source of information on this topic as well.

If you discover that others in your profession have been successful in negotiating certificate of merit contract clauses, seek to obtain copies of the contract language that your peers have been able to negotiate. On the other hand, if you discover that none of your peers have obtained a certificate of merit contract clause, try to find out why. Maybe clients have been steadfast against the idea of such contract language. Or maybe none of your peers have ever really tried to get such protective language.

If you feel it’s worth the effort to propose such contract language to your clients, ask your attorney to draft a certificate of merit contract clause. This clause should:

  • State that, in accordance with the agreement, your client shall make no claim for professional negligence or failure to perform, either directly or by way of a cross complaint against you, unless the client has first provided you with a written certificate of merit report executed by an independent consultant currently practicing in the same discipline as you, with recent experience executing a project or projects similar to the one in question, and licensed in the state/province where the project is being executed.
  • Require that any certificate of merit executed shall 1) contain the name, license number and professional seal of the certifier; 2) specify the acts or omissions that the certifier contends are negligent, breach the owner’s agreement, and/or are not in conformance with the standard of care for a consultant performing professional services under similar circumstances; and 3) state in detail the basis for the certifier’s opinion that such acts or omissions do not meet the standard of care.
  • State that only those items described in the certificate of merit report may be the subject of litigation or arbitration by the owner against the design professional.
  • Require that any certificate of merit shall be provided to the defendant promptly, e.g., not less than 30 calendar days prior to the presentation of any claim or the institution of any arbitration, mediation or judicial proceeding called for in the agreement.
  • Note that if the owner begins litigation, arbitration or similar legal actions prior to compliance with the certificate of merit contract provision, the action against the defendant will be dismissed.

The American Institute of Architects (AIA) as well as some specialized professional liability insurance carriers can provide recommended language for your contract clause. The AIA’s recommended clause can be found in Section 8.4.1 of the B101.

Why would your client agree to adding a certificate of merit clause to your contract? Some would argue that such a clause benefits the client as much as the design professional, avoiding the costs of litigation until the complaint has been shown to have merit. Often a certificate of merit clause can be used as a contract negotiation point. For instance, your client may require that you indemnify them against certain liabilities. You may counter with a request for a contractual certificate of merit requirement, and eventually compromise with a mutual indemnity.

Recent court cases have upheld the validity of certificate of merit laws and contractual clauses. But note that any certificate of merit clause you negotiate into your contract only applies to claims by the client who signed the contract. It does not apply to any other party.

Finally, it is not always easy to convince a client to accept a certificate of merit clause in their contract. They simply are not convinced that they should have to jump through hoops and spend time and money just to be able to file a claim against a design professional. Still, it’s likely worth the time to bring this option up during contract negotiations. And if you reside in a jurisdiction that has certificate of merit laws, it would be foolish not to take advantage of this effective killer of frivolous lawsuits.

Can We Be of Assistance?

We may be able to help you by providing referrals to consultants, and by providing guidance relative to insurance issues, and even to certain preventives, from construction observation through the development and application of sound human resources management policies and procedures. Please call on us for assistance. We’re a member of the Professional Liability Agents Network (PLAN). We’re here to help.


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