Good morning, everybody, and, welcome to our session for today, navigating duty of care.

If you haven’t watched our previous sessions on managing contract risks and understanding PI claims, those recordings were sent as part of the invite here.

We’ll send them again when we send a follow-up here. This will be recorded, so you’ll be able to circle back to it and, yeah, share it on and spread the good word.

CPD, for those of you that are members of associations that are providing CPD for this, we’ll send all attendees a confirmation email. We’ll be able to forward that onto your association to get your CPD points.

As always, please engage lots. Ask plenty of questions.

We love them. We’ll save them for the end or do them throughout as, as much as we can.

We’re joined today by Chris, who’s gonna be moderating, and, and Henry Bourke from Woodina Law. Unfortunately, Emma, Emma’s crook at the moment, so she can’t join us. But you know what they say, when life gives you lemons, make some lemonade, and and Henry is our sweet cup of lemonade today. So we’re very, very lucky to have him.

I’ll go a little bit more into into Henry’s past. So I’m going to just load up the presentation now and, and get started.

So as I said, navigating duty of care is topic today, dated twenty second of August. This is important because this, more than anything, legislation can change. So if you are watching this back at a later date, just make sure that, that you check what is current and relevant at the time.

Bit of a introduction to everyone. Like I said, Chris, managing director, and myself, the other director, Webber Insurance, and, Henry Burke. Henry is a special counsel based in the Sydney office of Woodina Law. He is a former barrister from Ireland.

So pardon his accent. I promise you’ll be able to understand him. He’s, he’s been here long enough. He’s been practicing since two thousand and eleven in Sydney.

He previously worked at some of the leading defendant insurance law firms and, previously was at Kennedy’s before joining Woodina.

His particular strengths are centered in litigation, and he has appeared on behalf of clients in federal, supreme, and district courts in many jurisdictions of Australia.

So we are very fortunate to have Henry step in at at late notice, and, hopefully, you pick up some great insights from him as well.

Wouldn’t be a insurance and legal presentation without a nice disclaimer.

As you’re aware, we are general insurance brokers. We can provide insurance advice, but not in this forum. This is all general. You consider your own circumstances and speak to us separately.

Likewise, with Woodina Law, Henry is a licensed legal practitioner. However, anything here is very general.

He is not providing personal advice. He will answer questions in general nature, and he is more than happy to take things offline if if required.

We’ve got a really good session today, and I’ve I’ve had a lot of a lot of joy putting this together to be perfectly honest.

It’s something that we kind of we’ve talked about in in previous sessions and had a lot of questions about it, and I thought it was probably time that we really delved into it. And I’m pleased to, let you know that I’ve learned a lot doing this as well, some of the legal concepts. And when you go, you know, different layers and layers in this in this type of information, it’s really quite amazing what you uncover. So we’re gonna talk briefly about duty of care, why it’s important. We’re gonna discuss proportionate liability and vicarious liability as well.

I’m aware that these are quite complex legal concepts, and the aim of this presentation is to make it not so scary and try and break it down a bit. So if you’re finding that any of the information, is not making sense or you’d like further explanations, please please please jump in the chat.

Put questions in there.

We’re here to kind of break it down as as simple as possible.

It’s only as good as as you guys take it in. So, hopefully, you find the session enjoyable and engaging and informative, and and the aim is to increase your knowledge and and strengthen and make your business better.

Alright. Duty of care, Chris, I might get you to throw up the first poll just so we can get a get a gauge of of who’s actually joining us today. So if you wouldn’t mind just telling us your profession, and we can make sure that it’s well tailored to your needs. And, thankfully, because most of the content is construction related, there’s primarily construction, but I see a few outside that. So we’ll make sure that we give plenty of examples that are, non construction as well as construction.

Leave that for a few more minutes, but few more minutes, few more seconds.

Alright. Wonderful.

Thank you very much for that.

Alright. So duty of care, you’ve probably heard it. You may or may not know what it’s all about. Incredibly important, particularly, for professionals. And a lot of this is gonna be tied back to professional indemnity insurance, but duty of care applies not just for professionals.

There are elements here, and you may or may not have heard of them.

So firstly, there needs to be an existence, of the duty. So it must exist between parties.

You know, typically, it’s you’re providing services.

You’re a professional. A duty of care in most cases would assist would exist there.

There needs to be a standard of care. So you are expected to work carefully and follow best practices to a standard that a reasonable person would exercise in similar circumstances.

And Henry will talk to a bit about that more as we go throughout the the presentation.

Then we get to breach of duty. So the breach occurs when you fail to meet that required standard of care. So negligence, errors in judgment, or a failure to take reasonable precautions.

And finally, it needs to be foreseeable.

So, you know, it could have reasonably been foreseen that harm would result from the breach of the duty.

And if you take any if you could anticipate any potential problems, you need to take steps to avoid them. Now this is really the foundation of the presentation today, and you’re probably wondering, you know, where does it fit into everything?

And and probably the question I get a lot is around professional indemnity. What does it actually cover? You look at your home insurance.

You’re covered for storms. You’re covered for fires. You’re covered for that. It it prescribes or defines events in which you’re covered. Professional indemnity doesn’t work like that.

It is underpinned by civil liability. And what I’m gonna do, I’m gonna throw to Henry, just to explain a little bit further as well as talk through this ensuring clause example, which you’ll see, this or a variant of this in most professional indemnity policies.

Thanks, Daniel.

Chris, I’m just wondering if you wouldn’t mind very briefly going back to the elements of Duty of Care. Can you go back another? Thanks very much.

Daniel correctly described the the elements there, but I just wanted to raise something. As he was going through it, it struck out to me I probably should have raised it with him yesterday when he was asking, is there anything you wanna raise about this? But failed to do that. And now, of course, in the middle of it, I’m I’m looking at something and going, oh, well, this needs a little bit of ex explaining.

Standard of care, that’s the second from the top there. You are expected to work carefully and follow best practices to a standard that a reasonable person would exercise in similar circumstances.

That reasonable person is a reasonable builder, a reasonable architect, a reasonable engineer in in this situation. It’s not just a reasonable person. What I would do in a certain circumstance involving building and what an actual engineer or an architect would do is significantly different. So that reasonable person when you’re talking about a reasonable person in professionals, you’re talking about that profession.

Okay?

Chris, happy to go to the, next page if you can. Just wanted to clear that little thing up. It’s a small but important point.

So as Daniel was saying, you go off and you buy your, car insurance, your home insurance, and you know what you’re buying.

It’s a it’s a very easily understood concept.

When it comes to professional indemnity, a lot of the time, there’s confusion about it.

And what Daniel has done very well here is just set out what is the insuring clause.

And he does the insurance clause, when I see a matter come to me, and by a matter, and insured has had an issue.

The first thing I do is open up the policy, open up the schedule, which includes, the various details that I’m gonna be looking at now in a second, but, also, what exactly is the insurance clause and how does it apply to the matter at hand.

So that I don’t know whether you can see this very well, but my my page although Daniel has already underlined civil liability, I’ve underlined several parts of that first sentence. And what it says is we agree to indemnify the insurer up to the limit of indemnity.

The limit of indemnity on my sheet is underlined. The reason it’s underlined is that tells me how much money is this person potentially insured for.

What is the amount he’s insured? Usually, twenty million, sometimes ten million, something like that. Again, civil liability. Daniel has underlied civil liability in the in in in this presentation.

Obviously, if it’s a situation where it’s criminal liability, where you have actively done something to harm somebody, we’re not insuring that. That’s not an insured part of it.

For compensation.

So civil liability can take several different, dieses.

You might be asked to pay a penalty. That’s not insured.

A compensation is a request from a third party, which I’ve also got underlined here. So that’s somebody outside of being you or your company arising from any claim as a result of the conduct of the insurance professional services. So the insured professional services are if you’re an architect, designing designer, whatever it might be, those things that you tell us, your insurance company, that you do.

That might be, I don’t know, if you’re designing a building, draft work, whatever it might be.

If you make a mistake in regard to those thing, then it’s very likely that your insurance policy will cover you with professional indemnity insurance policy.

Roman numeral one there is first made against the insured during the period of insurance. That’s a very simple element to it. That is I you you enter into your your contract of insurance in the first of August twenty twenty three. On the first of August twenty twenty four, that insurance will lapse. I’m sure Daniel and or Chris or somebody from Webber will have been on to you far in advance of that to renew your insurance policy.

The claim must be notified to us during the period of insurance. So, again, using the August to August example, you’ve gotta let us know about, the claim during that period of time.

Arises from an act or omission after the retroactive date, it’s not something generally you have to worry about, but, usually, the retroactive date will be five or six or seven years previously.

And we also agree to pay cost expenses incurred with a written consent from defense or settlement of any claim identified by this policy, and that speaks for itself.

Daniel, do you want me to talk more about that? I’m happy to.

Or No.

That’s alright. I think we we’ve got a good framework, and we’re gonna kinda touch back to it as we go through. And I think the the key thing here and what’s come up in in previous presentations are, you know, hey. I I understand what my responsibilities are, but, potentially, what are my responsibilities for the actions of others? And that’s really what we’re what we’re gonna talk about here. So Sure.

I wanna introduce everybody to a little flowchart.

Excuse the s on autonomous if you’ve picked that up. That’s a formatting error.

These concepts that we’re gonna talk about throughout the presentation, both vicarious and proportionate liability, you see there we’ve we’ve highlighted a couple of different streams. There’s the red and then there’s the blue.

Importantly, the red, the arrows are for direction and supervision.

You’ll notice that the two people engaged under that principal contractor or that builder, One is a draft person who is a contractor. The other is an estimator who is an employee.

However, they’re both under the direction and supervision of the builder.

And as we go through, we’ll we’ll highlight why there is vicarious risk for those actions as opposed to, the blue line, which is someone working autonomously, the engineer who is an independent contractor, with proportionate liability.

And these are gonna be interesting, concepts as we go through.

And as Henry pointed out when we were discussing this, this is not necessarily, a lot of things that you need to worry about the legal mechanics behind it except to understand that the risk either increases or decreases based on your engagement and based on how you actively manage your engagement of contractors or how you work on projects with other professionals or or builders or or whatever that may be.

So you’re gonna see a common theme throughout this presentation that we talk about a lot, direction supervision, direction supervision, and then working autonomously as an independent contractor.

Henry, is there anything you wanna add just to that general concept?

Not really. It’s it’s it’s well set out there. I just think that, you know, the the simple thing about this is an employee of a company will always be covered by insurance of that company. Yep. Definitely. As long as he doesn’t or she doesn’t do something that is so outside the realms of what they should have been doing as an employee of that company.

Yep. Definitely.

So we’re gonna get on to our first our first concept, proportionate liability. You may have heard it.

You may be familiar with it. You may not.

It it refers to the legal principle where each party involved in causing harm or loss is held liable only for their proportionate share of responsibility rather than being jointly and severally liable for the entire loss.

So the concept aims to allocate liability fairly amongst parties based on their degree of fault or contribution to the harm.

Now you’re probably thinking proportion liability, what does it apply to where, who, what, when?

So we’ve done a little bit of a heat map here.

On the left is the construction sector.

Generally how proportion of liability laws are viewed, and on the right is the non construction sector.

You’ll notice a darkening of color and some red in New South Wales, Queensland, Victoria, orange.

Henry, do you want a high level we’re gonna get into where New South Wales sets itself apart in Yeah.

Sure.

Liability, but just why we’ve represented those in in different colors on the left map there.

Sure.

Much to my absolute disgust being a a New South Wales, solicitor is that, they have recently changed away from the proportion of liability regime. Proportion of liability is really easy for lawyers. And whose fault was this? Well, it was partly Daniel’s fault.

It was partly Henry’s fault, and, we’re gonna go fifty fifty. That’s proportion of liability. Simple as that. Easy.

New South Wales has well, they actually introduced an act in in twenty twenty called the Design and Building Practitioners Act, which takes it away from that and complicates matters significantly for us lawyers, not necessarily, for you practitioners, for you professional.

But what proportion of liability did, and still does in most of Australia is allows a very streamlined process in a claim circumstance. So where there’s a claim or litigation, whose fault is it? Well, I said it’s fifty percent Daniels.

And as expressed earlier, that’s easily done. In the new framework in New South Wales and one that may well make its way to Victoria and to Queensland, that becomes a far more complicated circumstance because the Design and Building Practitioners Act essentially allows an individual, a plaintiff, the person who’s either, had property damaged or been, otherwise affected in that manner to sue a person directly.

That might mean that the employee, who was working for the company may also get directly sued.

So, for example, using Webber’s as the party that’s getting sued here, Webber, the company would get sued, and Daniel would get sued individually.

Now what does Daniel need to do to share that liability around? He needs to cross claim against Webbers. Webbers needs to cross claim against Daniel. And the reason that this has been put in there, put in place by the New South Wales government is to avoid a situation where a head contractor, creates a, effectively, a shell company to run a, build, which then dissolves shortly after, that build is completed. Who do you go after? Was there insurance in place? The consumer is the one who’s affected by this.

Legislators, governments, they want to protect the consumer as much as they can, and they’re now forcing, builders and all professionals in New South Wales to recognize the fact that the work that you do needs to be done in the correct in a correct manner. Now that’s always what all professionals wanna do anyway, but, this protects the consumer in a in a very significant way.

So if we look at Queensland and Victoria represented, you know, in in orange so fair to say that proportionality would apply in some, maybe not all cases?

Yeah.

Yeah. So what is there anything that you’ve seen particularly out of Victoria and Queensland where this has been an issue? Like, is there any, specific type of claim that is exempt from it that that it doesn’t apply?

Oh, look. I mean, in in terms of the Homebuilding Act, the the the ACT News at Wells, that that doesn’t exist anywhere else yet. Yeah. It’s very it appears to us to be likely to be adopted by other states soon.

Now what does soon mean? Soon could mean next year. Soon could be five years’ time. I imagine that a lot of the other states are looking at the repercussion.

They wanna know what’s gonna happen, in terms of when will this start to play out properly prop properly. The first case that changed this was a case called Pathburn, and that was a twenty twenty three case. So now all of the matters that I’m seeing, building matters in New South Wales, all contain this, this element in their claims.

I suspect that Queensland and Victoria are are wanting to see what are the unintended consequences of this act, what happens when this occurs. And what I can tell you right now what’s happening, I think I said this to you, offline, Daniel, is that insurers are looking at this going, this is the most expensive thing we’ve ever seen because, it just as as I’m sure everybody listening has been involved in in a type of build that involves, you know, twenty different professionals, twenty different people involved in something.

One person makes a mistake, and there’s a there’s a there’s a figuring out of what needs to be done from that point on.

Plaintiffs in New South Wales have been joining almost everybody to proceedings.

If you join everybody on that type of build, you get, let’s say, ten different defendants into a into a case of architects, drafters, engineers, certifiers.

They all get joined in. And then of those different professionals, they they may there might be four separate companies. They may have four or five employees also named on it.

In a proportion of liability situation, the court determines one through ten, this is the percentage that that’s at fault here. In New South Wales now, the issue is that each party has to succeed in its claim against the other. So you’re you may end up in a situation, certainly, that’s what’s occurring now, where you get ten sets of cross claim file, ten sets of defenses to the cross claim files, ten defenses filed. Yeah. And suddenly, the explosion of costs, lenders defending any of these matters, a moot point.

Yeah.

You need to settle these things really, really quickly.

Yeah. I think that that’s that’s really what it comes down to. It’s it’s consumer focus. But, look, the the non the non New South Wales, situation is is probably what I’m gonna go through now in terms of proportion liability. Just an example of what it actually might look like in practice.

So if you consider a a building project where you’ve got a builder, a designer, an engineer, a surveyor, a certifier, and insert any number of professionals or trades, they can be part of the the split of proportionality if something goes wrong. So if we have a look at a practical example, and anyone that designs or builds is probably looking at that picture on the right saying, that is not accurate. That’s not how you build anything.

There’s way probably too much in the road.

That was, that was a a chat GPT created image, which I asked it to illustrate me a bit of a disaster, and there it did. But yeah.

Don’t rely on chat g p two. We might need to do a a separate session on that.

So if you consider during the construction process, an issue arises where a beam a structural beam files, due to a design flaw, but also combined with correct incorrect installation by the builder.

The failure results in the house collapsing as you can see there and causing significant damage and financial loss. So if proportion proportionate liability is is firing on all cylinders, this is generally the way it would work. So the designer, you know, partially liable if the structural plans didn’t account for load bearing. So important, the designer didn’t do the structural works, but they may be found partially liable, if there was something wrong with their plans that didn’t quite account for it or illustrate or or whatever it may be.

The engineer, obviously, that’s that’s fairly clear cut. And anybody that knows any structural engineers or that is a structural engineer would be aware that their insurance premiums are very high relative to other professions, precisely because if something fails, the losses are huge, and often there aren’t many defenses.

Obviously, the builder, we mentioned that the the in incorrect installation process, if their construction methods deviated from, you know, accepted practices or if they made an error, obviously, they’re gonna be liable. You might find the surveyor in there. If there are inaccuracies with the set out, building wasn’t positioned correctly that, you know, it contributed to it or, you know, they filed to comply with zoning regulations, they may be liable.

The certifier, they might bear responsibility if they didn’t pick up on the compliance issues.

So you can see here how one one loss can bring multiple parties in, and you might think, well, that’s that’s a bit fanciful. Something goes wrong, and it’s clearly one person’s mistake.

Unfortunately, that’s not the way that the lawyers see it, and that’s not what happens in reality.

Even if you had very little to nothing to do with it, chances are you will probably be named as a defendant, particularly in states that, you know, proportionality applies because, you know what, your insurer can sit down at the table with all the others and you can just discuss amongst yourselves, who’s gonna be paying what.

So this is a bit of a pie chart to show where the proportionality may may lie.

So each personal business obviously liable for their damages or their share of responsibility.

You know, engineer taking most of it. Let’s say this is a million dollar loss. They’re up for six hundred thousand plus legal fees. The builder two hundred thousand, and you can see how it, how it might go through that situation. So, Henry, just flipping back to New South Wales again, what would that what would that pie chart look like if this is a New South Wales loss?

It doesn’t change. This is the this is the this is the thing about the the app. So it doesn’t change. What what happens is when you’re looking at that pie chart is that the land surveyor also has to sue the builder.

The land surveyor has to sue the certifier, the designer, and the engineer to get the same results, and everybody has to do the same thing. Mhmm. Whilst it it so it’s so much cleaner. Proportion of liability is so much cleaner than what we now have in New South Wales, because it did that for us. And the courts went, well, the engineers are sixty percent liable. Build is twenty percent liable. Now you have to prove your case in that same sort of pie chart way by cross claiming and etcetera.

Yeah. And and as, someone in the in the q and a has rightly pointed out, you know, the New South Wales may be more complex, but representing a fair outcome and keeping their borders to like, that that’s the whole point of it is Yeah.

You’re spot on, though. That that’s it exactly. And Owen from the from the tune is quite right there. It is. It’s, you know, as a society, that’s all we want.

We want this to to happen. We want our our our people to be looked after, and this is what it does. Now who cares about the lawyers? I do.

It just means it just means, that matters become more complicated. Yeah. But like I said to to, Daniel before we came on, largely speaking, you you guys don’t need to worry about this. This is something the lawyers are gonna have to deal with. It’s another element of a claim that comes through.

It’s it’s in the same way that in the same manner, you might have a contract.

You might have a claim under contract within a statement claim. You’ll have a claim under the the the DBPA, which is the Design and Building Practitioners Act.

You might have a claim in negligence under the Civil Liability Act, and that’s those claims still exist and will still exist across all, all states in in Australia.

Yep. And, just a couple other questions while we’re on this topic.

So no so the individual, and the director doesn’t need separate personal insurance because the scope of the the policy or the employer or the director’s company, provides coverage or indemnity for all employees, all directors, the company, subsidiaries, all that sort of stuff.

And the risk, as Henry and I were actually talking about this morning, is if you’re an employee of one of these companies and you are held personally responsible, it’s all well and good that the company’s policy protects you.

But what about if that company went into liquidation? What if you’re no longer working there and that company’s become insolvent and they don’t have professional indemnity? And that’s where there’s a bit of exposure and, you know, Henry and I was spitballing about, well, does this mean that the insurance industry needs to respond with a product that, you know, individuals can purchase separate to what their company provides. The the reality is it’s not something that exists now.

The other concepts I’ve heard talked about elsewhere in the market are getting insurance, on the projects themselves. So where there’s a large, you know, multistory development and there’s, you know, a hundred different professionals actually getting cover across that project rather than having, you know, a hundred different insurance companies sharing the pie. So there’s there’s a bit of work to be done, and and Henry rightly pointed out, this has only been in for a few years, and it’s it’s a bit of a look and see. There’s probably not a lot of case law, not a lot of precedent out there, which is why the other states are sitting back and and thinking, well, we’ll we’ll let them iron out the kinks. And once it’s, now good, we might we might adopt it.

Yeah. I I’m just looking at the, the q and a here. There’s some great questions going through there. Lindsay Spooner, you’re quite right, does make great work for the solicitors.

But it bogs us down in work in a matter that would have would have been through our books in a in less than a year or potentially years, which is a problem for us. So there’s there’s there’s multiple issues that go wrong with that.

Richard, I don’t quite follow your question about the energy efficiency assessor, in terms of that.

And Ben Donardi, look, the Paparin case I I spoke with, I spoke prior to the to coming online with Daniel about, a document that I have in front of him, which is called, rebuilding the New South Wales construction industry, and it discusses the PAPRUN case in there. And I know I’m gonna click it on to Daniel. I think he might have it already.

Yeah.

And we’re very happy to make that available to whoever wants to read it. Yeah. For sure.

Yeah. It discusses that.

So Yeah.

We’ll we’ll we’ll share that on. And just going back to the, the energy efficiency question, it really depends where you sit in when you sit in the kind of the contracting change, who who’s engaged you, what services you’ve you’ve provided. But, the proportionality will will still apply if you have contributed to the loss or if you are perceived to have contributed to the loss. Chances are you will be named as a as a defendant, and and have to either get your insurer to represent or make some sort of contribution to the matter. So, it doesn’t really matter where you sit per se at the top or the bottom.

You’re still likely to be litigated, and therefore, your insurer is gonna have to respond at some point whether they’d be the lead defendant, carrying the, you know, the brunt of it or whether you’re six, seven, eight defendant and you’re just there for the ride and maybe have to kick in a few dollars to to keep it moving. So, Yeah. It applies across. Now, question about New South Wales PI premiums.

The answer is, in my opinion, yes. It will.

It hasn’t yet. I I’m not aware of any insurers that are rating, state based in that respect. So if you were, say, an engineer or building designer in New South Wales versus Victoria, premiums aren’t at this stage obviously higher.

It certainly is a rating factor as you as they underwrite larger businesses.

So a larger business in New South Wales dealing with, you know, class two in particular multi multi story, you will find less insurers wanting to offer cover and those that do charging a higher premium.

I would suggest in the next five years, don’t hold me to this, but we’ll see insurers loading risks, adding a premium loading, adding extra price to, those who operate in New South Wales.

And if it goes to other states, then potentially, yeah, just premiums go up.

It is a, it’s a money in money out.

If if there’s more money going out for lawyers, there’s more money that the insurers have to pay. They have to get more money in premium. It really is a simple equation, in that respect.

We wouldn’t leave you hanging.

We’ve got some practical tips for you. So here’s the good news. Proportion liability, you can manage a lot of risk, with some pretty simple pretty simple, strategies.

Due diligence, you know, who who are you getting into business with? Who are you performing work alongside? Who’s engaging you? Who are you engaging?

You know, your suppliers. And I’ve put there to assess their reliability, competence, and financial stability.

Financial stability might be something that you’re scratching your head about, but, you know, when parties and entities disappear, somebody generally has to pick up the slack and particularly if they don’t have insurance. But like, like what Henry mentioned, particularly in New South Wales, that’s what they’re trying to trying to stamp out.

Contracts, if you’ve listened to us talk in any of our other sections, engagement agreements, contracts, contracts, contracts, make sure your scope of work is clearly defined, your role, your responsibility, and then what, you know, other parties are doing.

Communication, this is this is the easiest thing. You know? Open and clear communication with everybody throughout the project.

Make sure everything’s documented, all the decisions, all the acceptance, all the changes, any agreements. So if there are ever any misunderstandings, you can point back to it.

If you find yourself in the unfortunate situation of a claim and you’re on the phone to Henry, the first thing he’s gonna ask to see is a copy of your contract.

Your engagement agreement. He’ll then ask for a correspondence on the matter. He’ll ask for emails, texts, anything that you have backwards and forwards that support your position.

So don’t think it doesn’t matter because your files, your documentation are absolutely your first line of defense.

On the contracts as well, making sure that risk is allocated appropriately between parties.

And I put there the ensure the risks are assigned to the party best able to manage them. And this is something that, is improving a little bit with the unfair contracts that that have come in, the the act that that aims to apply more fairness throughout.

But there’s no point accepting liability for something outside your control. So you need to make sure you’re reading reading contracts, make sure that they’re fair, they’re equitable wherever possible. And if you’re not sure, we provide contract review services through Meridian Law, and, also, you can speak to your own lawyer if if you want.

Insurance goes without saying.

Everybody must carry insurance.

Where particularly where you subcontract, make sure you ask for copies of their certificates of insurance.

If you have to ask someone who they’re insured with when something goes pear shaped, you will not find it as easy to get their information.

You need to keep them on file and maintain them as well. It’s no good keeping it for one year and then deleting it, particularly professional indemnity. The way it works, you need to find out every year, new copies, people changing shares, all that sort of stuff.

The responsibilities.

So clearly delineate responsibilities between parties. You don’t wanna overlap duties because that can, that can complicate the matter.

And just being proactive.

It really goes without saying, but if something props up, don’t don’t bury your head. You know, particularly in the construction game, things move fast.

Costs blow out very quickly if you’re not on the front foot.

I I sorry to jump in there, Daniel. Yeah. That’s fine. I I just it’s one of those things that we see on the legal side of things.

When we get claims come in here, they’re either in play we get notified of various things just so everybody can understand what happened. So we get a a notification of circumstances. This is a that’s a situation where an insured audience has got on to Daniel and said, hey. Look. We’ve got this issue at the at the site.

X and y has happened.

Do we need to notify this? And Daniel goes, yeah. Look. Send this through. Fill out this claim from Udina.

It comes through to me, and I’ll pick up the phone to you and I’ll have a chat with you about it. And it’ll be something like, what does the other guy have to say about this? And more often than not, the person who is not getting sued is the person who’s having who’s proactively engaged the other side, so to speak, in communication and has talked to them. They understand what’s going on.

How can I help you? What can we do to change this? Oh, we need to we we need to move this four meters. Fine.

Let’s sort that out. We can do that amongst ourselves.

That is how you avoid claims in the building industry.

Find a solution to the problem that’s been that that that has been created and communicate with the person who’s got that problem.

That is, you know, nine times out of ten, you yourself will be able to fix the issue that’s there nine times out of ten.

So I cannot emphasize enough how important, communication and proactively communicating, will will get you out of trouble. And I’m glad to see that Daniel’s got all that there in the in the practical tips that will help you.

Yeah. And I think in in reality, when we lodge a notification or a circumstance of claim to someone like Henry or or whoever the the lawyer representing the insurer may be, if we if we come to them with a problem but also a solution, chances are they’re going to green light it. If we come to them and say, look. This is what’s happened.

Everybody’s put their heads together. This is where the matter will sit. This is what everyone will say. We avoid we avoid the lengthy litigation, the the fighting backwards and forwards because it’s very easy for then the insurer to quantify and make a decision on, okay.

Well, this is gonna cost us twenty grand to fix it. We’re not even gonna dispute liability.

Go ahead with it. Or how much is it gonna cost? Okay. Well, we don’t know.

It could be twenty grand. It could be two hundred thousand. Now we’re in a position where we need to take a conservative approach to it. We need to defend your position, and then it ends up being more protracted.

You might end up paying two hundred thousand and another hundred thousand in legal fees. So when something goes pear shaped, first thing, think about a solution.

Call me or call your broker or call call Woodina, if they’re your insurer. But most of the time, send your notifications through to us, and we’ll triage that, and work out the best way forward.

Yeah. The the question about impacting things retrospectively when they introduce new legislation, Henry.

Yeah. So the the DB, the the Designability Practitioners Act, we’re just discussing that one. That’s that’s a classic. It goes back ten years.

Yeah.

And on every new build, I’m back ten years. So if it was to be introduced to Victoria or Queensland or Western Australia, Tassie, wherever, you would I would imagine you would see a similar type of clause or or or, yeah, clause within the within the legislation that would allow for that retrospective, things. Now look. I mean, since Pathburn, which was the case that determined all of this, there hasn’t been a building case in New South Wales that hasn’t relied on the, DBPA, as part of the claim that’s been made at the very least.

They just everybody is putting it into every piece of pleading. So if it happens, it’ll happen quickly. Yeah. Will it be retrospective? It will be on certain things.

If you’ve got a matter that’s on currently, they may try and amend the pleadings, but, you know, this is all It’s very speculative.

It’s very speculative. Yeah. It’s very speculative.

And from an insurance point of view, how that would impact it?

Look, there’d be a lot of underwriters across the country really scratching their heads.

They would be just to go back to the whole New South Wales thing, when they were launching the act, the insurance council of Australia and all the major insurers, wrote to the government and said, you introduced this as a disaster. PI insurers won’t be able to respond. Premiums will become unaffordable, and they just pushed ahead and did it, which is fine. But now the insurers are left to underwrite it and manage the risk themselves. So, whilst your policy covers retrospective, if there are changes of legislation like the expanded duty of care, insurers can make changes moving forward that impact your past work. So, theoretically, it shouldn’t be a problem because, you know, the commercial nature, like, the insurers will just have to respond, and that may be too bad for them.

But if you have a look at something like cladding or asbestos, insurers just kinda came in and said, look. This is a big issue. We don’t really want anything to do with it. And there were special markets created to to cover those types of risks. So, unfortunately, it’s it’s unclear, but your broker, whether it’s at like, we will be on the front foot with that. We will highlight any concerns, and that is the benefit of having a broker if they if the insurer tries to slip things in the policy coverage that impact you, it’s their job or our job, to make sure you’re aware of it. Or if it’s not suitable, we find something something alternative.

I’m going to keep going. We’ll we’ll keep going through some questions as we go, but I’m just mindful. I don’t wanna run overtime because we, we already added extra time because we, we love all the questions, and we wanna get to them all. So, the next concept we’re gonna talk about is is vicarious liability.

Vicarious liability refers to a legal responsibility imposed on one party. So it’s typically an employer or principal contractor for the actions or omissions of another party, typically an employee or a contractor, who acts on their behalf. So this is, where we were talking earlier where we showed that flowchart, the the two people below the build of the draft person and the, estimator who were under the direction and supervision of the principal contractor.

This is what we’re talking about. And there’s some there’s some legal precedent in this one, which, has been around for a while. Henry, do you wanna just quickly run through that?

Yeah. Sure. The case that the case that’s in the, that should be in front of now, Sweeney and Boiler nominee nominees.

It’s a high court Australia, case.

Mister Sweeney was injured by the alleged pool repairs of, a mechanic hired by boy Boylan.

But because the mechanic was an independent contractor and not an employee, Boylan was not held liable.

The court in that case emphasized the need to clearly differentiate between employees and independent contractors when determining liability.

Justice Kirby disagreed, believing Boylan should be liable because the mechanic acted as their own representative.

As Daniel’s put in quite well here that the case highlights the difficulties in expanding liability using agency arguments and suggests that the law should take a more flexible approach to worker classification to prevent companies from avoiding responsibility responsibilities for those they hire.

Later on in in this, presentation, you’ll see, what is a very helpful was the color coding of, when a person’s an employee or, an agent in in a sense, or an independent contractor.

And what the courts have have found in respect of all of that and employees are very easily identified, individual on the person paying him as the as the business owner. That’s an employee. There’s lots of other indicators of what an employee is. It’s really the independent contractor who’s acting as an employee that creates the issue here.

So am I employing an independent contractor, but am I paying him directly all his wages?

Is he dealing with me on a one on one basis? Does the worker decide Is he actually deciding when and where to work, or is he just working for me?

There are all these sort of elements to it that can confuse the issue a little bit. But, contracts and communication are the way around that. I I know Diane has discussed that in a few minutes.

So fair to say this is good good law in every state? Yes.

Then you said no.

Look. It’s it’s it’s you know, it is it’s still used in other elements of of, New South Wales law. It’s just not in the building industry. So Yeah.

It’s still good law to an extent.

Anyway.

Alright.

So what does this mean? This means that employees carry liability from the actions of their employees, and principals may carry liability for the actions of contractors that they direct and supervise.

Now I’m not sure if anybody subscribes to the Fair Work Ombudsman, updates. If you don’t, as a business owner, I would strongly recommend you do.

You can put in your your kind of classification. You’ll get updates when things like award rates changes or when laws change that that impact, that impact your business so you can stay on top of those. Now just recently, twenty sixth of August, so in a few days’ time, there’s a new piece of legislation being introduced, mainly for the transport sector, but also an element of what they call gig workers.

Gig workers are Uber drivers, Uber Eats, DoorDash, all that sort of stuff, and there’s been custom, legislation implemented to give those people more protections as employees of the companies or the platforms that they represent.

The reason I say that is not because we’re doing a presentation for Uber drivers, but to highlight that legislation does and can change, particularly in relation to contractor or employee definition. So if you haven’t, I would really recommend jump on, Fair Work Ombudsman, register for alerts because you’ll you’ll just stay ahead of the curve, and and that’s really, really good information.

And if you do drive Uber on the weekend or at nights or whatever, just know that you’ve you’ve probably got a bit more protection now.

So, yeah, fair work ombudsman. Jump on that.

Henry mentioned the table color coded that we’re going to go through contractor versus employee and and what I know.

I’m sorry. Can I just jump in really quickly there? That one of the one of the q and a questions from, Owen.

Owen, pay attention to this next part because your answer will will will will come from Daniel on on this page.

He’s asked if I engage a consultant, engineer, surveyor, etcetera, through my business and my contract clearly describes that I’m doing so as an agent of the client. Have I taken on liability? The engineer is still effectively working for the client. I’m just coordinating it and paying for it to keep things rolling to my timeline.

Your answer is gonna be found here on this page. What is the difference?

Is that person an employee? Is it an independent contractor? So, we, Daniel, go on from there.

Yeah. For sure.

So the aspects down the left, I don’t wanna read all of this word for word because you can you kinda get the gist of it. When we talk about control, it’s it’s who’s deciding the workflow.

Is it the contractor or is it the employee who’s directing, who’s supervising?

How are they integrated into your business?

Whether they’re, you know, work to the the contractor working to further their own business or if they’re serving your business, as a representative, how they’re being remunerated. So are they being paid to achieve a result?

Generally, a fixed fee or are they paid based on their hours? So that’s, you know, hourly rate, time work, time sheets, all that sort of stuff.

The extent of their delegation authority. So can they subcontract work, to help them if the contract allows, or are they responsible to do the work personally?

Tools and equipment. So this is where you start talking about, you know, bona fide subcontractors, people with their own tools, their own cost and expenses versus where the business is responsible for providing them, whether the the worker base commercial risk for their work. You know, that’s that’s financial exposure and and workmanship and things like that. And the goodwill, who’s generating and who’s benefiting from the goodwill? Is it the contractor themselves, or is it the employee?

So in the situation where they’re working, you know, separate to your business, you’re not exercising a degree of control. They’re not integrated. You’re paying them to achieve a result, chances are they’re going to be an independent contractor.

This is something that does come up quite a bit, Henry, where as a designer, you may engage a surveyor or a or a structural engineer.

Remembering here that we’re talking from a vicarious liability point of view, It doesn’t mean that if something goes wrong with the structural pans, you’re not liable because you’re not vicariously liable. You still may be correct me if I’m wrong, Henry, but you still may be a portion liability if you have filed to exercise, you know, due care in checking it, checking the the work, or integrating or whatever it may be. So we’re talking specifically about vicarious here.

Because they’re not classified as an employee, it means that you’re not you may not be vicariously liable, but you still may be liable for their actions if something goes wrong and you filed prevent it, cure it, whatever it may be.

You know, that’s what I’m that’s that’s that’s spot on. I I one of the simple sort of, ways to think about this is, actually, per per Owen’s question that he had in the in the in the question box, If I if he, employs or, sorry, engages an independent contractor to do the work, that independent contractor is gonna be liable for the work that he or she does.

Owen may end up having some liability if he starts saying to that independent contractor, well, I want you to do this over here, and I want you to do this bit here, and I’d like you to do it in this manner.

By doing that, he’s exerting a type of control over that independent contractor, and he’s stepping into a potential liability.

Does that make sense?

Yeah. I think and in in your example, if, you know, the designer has here the plans make the engineering work for this Yeah.

That that’s a a clear and look. Our our advice is to tread very carefully when engaging contractors through your business acting as a principle where they’re not performing work that you are, qualified or sort of experienced to oversee if you like. Because there’s also an element where perception comes into it. Because just remember, these are all legal principles that a court may decide. All the time we don’t get to court. We get to, you know, early stages of litigation or maybe mediation.

And if you’re engaging a contractor who’s an engineer by your invoicing for it and your engagement agreement says, I’m gonna take care of the engineering, chances are if something gets pear shaped, your name’s gonna be on the list of defendants as well. Even if you say, I had no part of the engineering, the argument back will be, well, you you found them. You engaged them. You kinda supervised them. You were paid for it. You are you are liable.

As a I don’t the the other the other part to that is that if you don’t delegate fully, and that’s something you’re doing when you engage a subcontractor or an independent contractor.

If you don’t if you don’t delegate to that contractor fully, do this. This is the job we want you to do. You do it.

Then there’s a potential that you will have some liability as well. So if you’re if you do it half heartedly, I still wanna be involved in this. I still wanna be, I still wanna know.

Court’s gonna find you ten, fifteen, twenty percent liable for the actions of that independent contractor because you’ve been involved intimately in in what’s been going on.

Yep. Well said. And we’ve got some, we’ve got some tips for mitigating risk in this in this field as well. So, pacification of workers, like Henry said, it’s it’s really important to put forward whether, you know, their employees con independent contractors based on the legal criteria. So, that table of information that I got was from Fair Work.

Fair Work is very hot on contractors versus employees because outside of a a risk and a liability point of view, there are other factors. There are payments of leave, superannuation, PAYG tax, all those sorts of benefits or war rate that that apply to employees that may not, independent contractors. So it’s not just isolated to risk. There are a whole lot of other elements to do, you know, with with tax and employment conditions that that come to us. So you might say, well, okay. I’ve managed my risk in this respect, but you might find yourself investigated by the ATO or Fair Work.

So you really need to be across all those all those bits, and most of those government websites have a lot of really easy tools for identifying whether someone is an employee or a contractor.

Contracts contracts contracts contracts, they help.

Well drafted contracts clearly define the relationship, roles, responsibilities.

Talk about, like Henry said, delegation, control, liability.

I’m sorry. Just on that as well, Daniel. Updated scope of works that run into contracts. Yeah.

We want to do something slightly different now. Can you do this as well, please? Get the scope of works into your contracts. Yeah.

Put it into your contract.

Control, the big one. Henry mentioned again, avoid exercising too much control over the independent contractors.

You know, we use that example. If you’re not a structural engineer, don’t tell a structural engineer how to structurally engineer.

You might be from a design point of view, but certainly not from an engineering point of view.

Assessing competency, this goes back to before, you know, asking for, not knowing who you’re doing business with.

You know, if if you work with certain contractors regularly, you should know them fairly well.

If you have someone new that you wanna use, sounds dumb, but you need to check their qualifications, Ask for a CV. Hey. You’ve got a license for that. Great. Show me a copy.

You’re qualified to do it. Show me your registration certificates. All that sort of stuff.

We’ll help you because we like to think that everybody in the world does the right thing, but the reality is they don’t.

And that’s how you can sometimes be caught out.

From an employee point of view, really invest in your training.

So train them and train any, contractors that are under your direction supervision on their roles, and limit their authority. You know, if you if you’ve got employees that are out there and they’ve got the keys to your business, don’t be surprised if things go pear shaped and you have to pick up the pieces. You need to exercise, a degree of of limiting on authority to protect yourself, whether that be sign off or or whatnot. We’ve had plenty of issues with employees that have made errors, which have led to a claim, and then the business owners go back through all their past work and find out, hang on a sec. There’s now fifty projects that were done incorrectly.

You’ve got fifty claims. That is almost time to shut up shop, depending on what happens from a from a payment point of view and and, and the outcome.

Going in the same way, auditing and review, conduct regular audits, have a process for that, document it all, keep your employees and your contractors accountable.

At the end of the day, as the business owner, you will be liable for what they’re doing most of the time.

Subcontracting. So if you’re using contractors, make sure your contract addresses how those contracts can or cannot subcontract the work.

Once again, we’ve had situations where contractors have been, appointed. They’ve sent work offshore in some cases to be performed by people in other areas, come back, pass it off as their own, and and the person receiving the work is none the wiser, adds to a, yeah, makes for a very unpleasant time if if something goes wrong.

And just going back to the limiting authority, I’ve got this in here twice because it really is important to have, you know, limits on what your staff can do, particularly in the in the technical sense, whether it be peer reviewing things, multiple sign offs.

This applies from a risk point of view, but also financial loss, you know, people that handle money, all that sort of stuff.

Making sure that there are limits on the ways that you operate and and protections in place for your business.

We’ve gonna go through some questions now.

So might just see what we’ve got here.

Peter McPhee, usually, it’s about seven years. Okay? That’s what you’re trying to be asked, and certainly, insurance wants to keep it that long.

So keep keeping records.

Yeah. Thanks.

Yeah. Which is, which can be burdensome for for for people, obviously. Yeah. But now with the cloud and all that kind of thing, that’s where a lot of people are are are doing that Yeah. That story.

Lindsay, I I I I see your question, and I’m I’m not quite sure, had answers.

So, basically, that situation meaning, if Lindsay’s a a building designer and he says, he or she says, hey. We need to get, engineering done on this. Here’s a list of engineers that might be able to help you.

They go through engineer. The engineer does the engineering, gives it back to him, and then they incorporate it in there.

That’s probably where we’re talking about removing yourself from that contracting chain adds value.

But it yeah. So I think you’re probably a step far removed there to be involved.

I think you you’d you’d struggle to be liable if you’ve if you’ve, you know, washed your hands and said, look, that’s the Yeah. That’s precisely why, we advise look, it’s you’re never gonna stop people litigating you is the reality.

Yeah. That’s that’s true as well. But if you if you have told the client, hey. Hey. Listen. You’re gonna need to get a surveyor in here to do this work. And the surveyor comes on, makes a shambles of us.

That’s on the clients who’s engaged the surveyor directly, if that’s the question.

That’s right. And and they’ll have an engagement agreement that holds the engineer. So it’s a it’s a lot about accountability as well. So if you if your client, the homeowner or whatever, goes out and engages the engineer, the engineer is providing services to your client. They’re not providing services to you who is providing services to your clients. So we’re kind of in a bit of a chain effect there, which is why it’s it’s kinda good risk management to remove yourself from that to an extent.

Douglas, Pearson, I see your question there about being a superintendent on a project, and you instruct a builder that they must do what is documented e g by an engineer. If the builder does it and then fails, am I liable?

I I assume you mean if the builder follows what the engineer had asked him to do. Well, I I I don’t think so, in that circumstance.

It’s a very sort of, broad question, I think. It depends on what else you did is is probably the answer to that. But in this very narrow circumstance, if you tell a a builder that to follow what the engineer is telling him to do, which is, of course, what he should be doing, I don’t think you’d be liable in that in that particular circumstance. But, again, there might be other elements to it that I don’t that I don’t know.

And And then my The it kinda goes back, like, I don’t know your experience, Henry.

I’m sure you see it all the time, but when something goes wrong alright. Who’s touched this? Alright. First, second, third, fourth, fifth, fifth, whatever. Mhmm. As a project manager, in my experience, you’re probably gonna be named.

Is that where you’re from?

So Certainly.

You know, project managers, superintendents, but, project managers will always be named on something.

Again, as a project manager, you should be delineating exactly what it is that you’re doing, and putting in place, a contract that works for you, and protects you from these types of ancillary claims against you. If it’s your job to organize what how the how the builders done the ABCs of it, are you actually fully engaged in in in engaging the engineer?

I don’t I don’t think so. And a lot of the time, you just need to have that argument.

You’ll be brought along within a matter. You’re the project manager. We’re suing you. You’re involved. Is the sort of the the the starting position for every matter.

But once you’re able to show that now, look, the builder engaged the engineer who engaged the subcontractor to do x, y, or z, I just told them that that’s what they needed to do or that this is what comes next in the building program, then you will often be able to remove yourself from the liability in those situations.

Again, the thing about it is is how directly was I involved in this matter?

Who was I giving directions to? What was I telling them to do? Did that have a material effect to the outcome?

Yeah.

Just going back to some of these early ones. So how do you claim for for losses? You know, your time interest loss around when the party at fault liquidates or cannot be located in response?

So that kinda goes back to what we’re talking about earlier with with what the New South Wales legislation is kinda aiming to achieve by It does, but it’s also possible to do that with, outside of the outside of that.

When a company liquidates, they there’s usually liquidators, on both, involved. That’s how you go about doing that. The liquidators will keep the records of that company again for seven years, and you should be able to if you’re talking about a company that’s in liquidation or has gone to liquidation, find out who the liquidators are of that company, and go directly to them. And the reason you’ll be going directly to them is that if the company was operating with an insurance policy in place, you may be able to claim more losses off that insurance policy.

Yep. And and the the New South Wales model, one of the questions that we had, this is more from a premium and affordability point of view.

If it does move to Victoria and other states, the question is could it result in high design fees due to numerous parties making claims, etcetera, etcetera, or did they regulate it where insurance companies would sort this out without increasing premiums? The answer is no. They just did it, and they expect the insurers to cover it. And in kind, I dare say, the insurers at some stage will respond as we get further along and as the costs increase. But just remember that, premiums are set by, insurance companies who rely on actuaries.

The actuaries are the ones that provide the data, and they will say, in New South Wales, a claim of this nature for a building designer will cost x, and in Victoria, it will cost y. The insurers will look at that. And if and if we start to see a disparity when New South Wales all of a sudden becomes a lot more expensive, then you will see premiums follow suit.

It’s a bit of an unknown, unfortunately, and the reality is, though, where things cost more, premiums tend to go up.

Same theory, you buy a more expensive car, cost more to insure, generally speaking.

David Mulhall Hall, I see your I see your comment there about, removing oneself from coordinating engineers, etcetera, and that creates more problems than, than anything else. I I fully appreciate that that’s the case.

But that’s often the case, and that is why you’re insured. Yeah.

And if if something goes wrong in that situation, you’ve been you’ve been, brought into a matter, that’s why you’ve got insurance. And I fully understand that that the reality of the situation on the ground is that, it is significantly easier to prevent something from happening if you’re involved in the matter, and you’re looking after it properly and in a proper manner. So I’ve I’ve no problem with what you’ve said there.

Definitely. And I think it goes back to, the whole purpose of of this presentation is not to tell you how to run your business, but to highlight what your exposure is so that you can make an informed decision so that you can use some of these strategies to manage your risks when you do use it. Because the problems come where people have no idea that engaging a contractor or acting as a principal designer, increases your risk. And therefore, you need to make sure that, you know, insurance is suitable.

You need to make sure that your documentation is up to scratch and understanding where you may or may not be liable. So if something goes wrong, you don’t just throw your hands and say, well, it was their fault. You gotta accept that that there is some sort of, responsibility. So, yeah, like Terry said, completely agree with that, David.

What else do we have here?

John Echols, that’s a that’s a really great question, that you put in there. I might read it out in case anybody hasn’t seen us. And in the case of a building designer engaging a structural engineer on behalf of their client, if there is an issue with the engineering design and the project does not and and the project does go left, will the insurance company cover the building designer for the proportion of liability?

Or can this be found to be outside the scope of the building designer’s insurance?

So, John, that’s a like I said, it’s a great question, and everybody should be aware of this as a starting point for whatever it is that you’re doing.

What in terms of am I insured about something? Am I insured for something? What is the professional service I am providing to this person who I am contracted to.

John is saying here, the building designer in the case of a building designer engaging a structural structural engineer on behalf of their clients, and then, ultimately, there’s an issue with the engineering design, does his insurance cover him for that? Now the the question is, what is a building designer insured for?

Without being flippant, he’s insured for designing buildings.

A structural engineer, if a building designer engages a structural engineer on behalf of the client, is that outside of what he’s insured for?

I suspect the answer is yes, that it is outside, what you’re actually insured for. You’re insured to to to design buildings. And I this might be too simple, John, and you there may be other elements to it that that you you could explain maybe offline to me at some point if you want to.

But in those circumstances, that’s not your professional services. Your professional services aren’t engaging other, trades to do something.

That may be the professional services of a project manager. Yeah. And, therefore, it’s a different type of insurance or not a different type of insurance, but potentially, potentially, would not fall under your under your policy.

Yeah. It’s gonna it’s gonna come down to the scope of what you’re covered for and the specifics of the matter, and what the claim relates to, quite frankly, because we’ve had situations this exact that have been covered and others where they’ve they’ve done defense.

To give you kind of some context, and I know we’re talking a lot about building designers engaging structure engineers. That seems to be a really good, really good example.

Building designer minimum premiums for a million dollars cover starts about six hundred and fifty, seven hundred dollars if it’s tiny and you’re in the right state, no stamp duty, all that sort of stuff. If you are a structural engineer with the same variables, your minimum premium, if you’re making the same amount of money as an engineer, would probably be about six and a half grand.

That gives you an indication of where insurers see that risk. And if you’re a building designer, I could pick fifty insurers to cover you with. And a structural engineer, you might have five or six.

So when we talk about these these issues with engaging things like structural engineers, the reasons premiums are higher when you do that is because if something goes wrong and you are brought into it, and we’ve kind of discussed that when you saw you’re probably more likely to be named as a party even if you did nothing wrong. The chances of the loss being large are a lot more likely.

You know, a building designer that puts a wall in the wrong spot, you know, has to move it twenty grand, something like that. A structural engineer that has a built a a beam in the wrong spot, has to be reengineered and and whatever or, you know, a a concrete roof that’s deflecting greater than the allowable amount, we’re talking hundreds of thousands. So, I appreciate that, as David pointed out, the risk of managing them, you know, reduces the risk, but it doesn’t remove it. But the likelihood of being named and the claim being larger is is probably where the need for additional premium comes into it. So, that kind of gives you an idea of how insurers view the different professions.

For example, Woodina Underwriting, if you are a business offering if you’re an engineer doing more than, I think, ten percent structural engineering, they don’t offer cover. So we’ve got different markets that do that, specialists that that can do it. So it’s not just the price thing. It’s also about willingness of of companies to actually underwrite it.

I’m mindful that we have run over time, so I really appreciate everybody for sticking out.

Any other questions?

Send us a note. Whoever asked about, law firms and whatnot for for drafting engagements, send me an email at [email protected]. We can we can talk about that.

Yes. That’s fine.

Sorry. Vince Hayward, I see your your questions. That’s been there for a while. I’m sorry. I didn’t get to it earlier. And, look. If you if you design something that shows a suspended slab, over the the crossing, the engineer designs a suspended slab and it subsequently fails, that’s gonna be on the engineer.

The engineer should have come back to you either by telling you that, no. That’s impossible. It can’t happen. Or, yes. It’s fine. We just need to use this this and this.

But if it fails, it’s very likely the builder, and the engineer who who who are gonna be involved in that one.

Yeah. And and, Peter, as you’re rightly pointing out, managing consultants is a different risk to, you know, engaging, directing, supervising them.

That is that is good business practice as as you pointed out and something that that is good to see, but, always appreciate you joining in, Peter.

Rocky, Zapier, just just on that, it depends where you are, in terms of so should a building designer just recommend a structural engineer to a client?

The DBPA, and I think part of the consumer law, discusses this in detail about and I’ve got this in a manner that I’ve that I’m currently dealing with here in in New South Wales, and it may only be New South Wales centric. So if it doesn’t affect you, I’m sorry for scaring you.

But if you, direct our clients to or recommend somebody to somebody else, you can have a liability and a recommendation, in in New South Wales at any rate.

So just be aware of that.

Recommendations can sometimes cause a problem.

Perhaps think about how you word it and whether you put one one person forward or multiple and allow the client to choose. And and perhaps rather than being a a recommendation that it is a you might wanna try.

The the devil might be in the detail there.

Okay.

There.

Sorry. I’m just reading through.

Where’s that one? That’s okay.

I think we’ve answered most of the rest of just comments.

On here, you see Ryan’s, Henry?

Yeah. I do. I’d imagine there’s a right or a wrong Ryan.

Yeah. And how they’re interpret one of you is interpreting it the right way. So that’s that’s probably the question is probably the answer.

The question is what about certifiers that read, and interpret the code differently to other certifiers? And that would apply to building designers as well to a to an extent.

Yeah. Owen Owen, Owen Bachelor is interesting thing about our one of our previous centers. Contract administration is part of a building designer’s license. Therefore, coordination should be ensured. So the the reason I’m interested in that is because a building designer goes to get his insurance, and he rings Daniel or or or Webber’s office. He says, I need to get insurance.

Get me insurance through Ordina or whoever you wanna get insurance through.

And your, professional services are listed, discussed here in the insurance company between Daniel and, Woodina, whoever it is. And then it’s listed on your schedule, what your professional services are.

If you do contract administration as part of your building desires, then you need to tell Daniel Yeah. To make sure that Woodina put it in the schedule or who whatever insurer you have, put it in the schedule so that it’s covered and it’s insured, and then it is insured.

That’s right.

And every every declaration and just to to let everybody behind the curtain a little bit. When you fill out your declaration and you take, I do building design, interior design, project management, contract administration, whatever it may be, all of that is is then, put on your schedule, and you’ll you’ll see it represented.

So, like Henry said, that’s our job to make sure we get the right cover, but it’s your job to basically tell us what you do.

And that’s why these declarations that you complete are, are critical to to ongoing viability of PI. So, look, I’m really mindful that we’ve we’ve gone ten minutes over even though we even though we extended it, from last time. But, really, that’s a testament to everybody that’s that’s tuned in. Massive, massive, massive turnout today.

So I really appreciate you joining. A huge thank you to Henry. He’s come in at the last minute, and he’s been fantastic. So, Henry, thank you so much for your time.

We’ll probably be doing one more, of these towards delayed to end of the year.

I’m not being noncommittal. I just haven’t thought of a a topic. So if anybody’s got any great great ideas, please feel free to to email them through.

Once again, thank you. Thank you. Thank you. Your engagement’s been wonderful. I hope you found some benefit.

Hope we haven’t scared you. So, yeah, like always, if you need anything from us, just reach out to the reach out to the team at Webber, and we’ll be happy to help you. Thanks again, guys. Enjoy your day.

• Due Diligence – Perform due diligence on partners, subcontractors, and suppliers to assess their reliability, competence, and financial stability.
• Contracts – Draft comprehensive contracts that clearly define the scope of work, roles, and responsibilities of all parties involved.
• Communication – Maintain open and clear communication with all parties throughout the project lifecycle. Document all decisions, changes, and agreements to avoid misunderstandings.
• Risk Allocation – Use contracts to allocate risks appropriately between parties. Ensure that risks are assigned to the party best able to manage them.
• Insurance – Ensure that all parties carry appropriate insurances for their risks, request copies of insurance yearly (minimum), and maintain records (at least 10 years).
• Responsibilities – Clearly delineate responsibilities between parties to avoid overlapping duties, which can complicate the apportionment of liability.
• Proactivity – Address issues as they arise, and engage in proactive problem-solving with all parties involved.

• Classify Workers – Accurately classify workers as employees or independent contractors based on legal criteria.
• Contracts – Use well-drafted contracts that clearly define the relationship, roles, and responsibilities, including clauses on delegation, control, and liability.
• Control – Avoid exercising too much control over how, when, and where independent contractors perform their work.
• Assess Competency – Check qualifications, ask for a CV, previous experience, licences etc.
• Training – Train employees and contractors on their roles and the limits of their authority.
• Audit & Review – Conduct regular audits and reviews of the work and performance of both employees and contractors.
• Monitor Subcontracting – Include provisions in contracts that require independent contractors to vet any subcontractors they hire.
• Limit Authority – Clearly define and limit the authority of employees and contractors to act on behalf of the business.