When Building Information Modeling (BIM) first arrived on the commercial construction scene some years back it promised to change, even revolutionize how projects were designed and delivered. Proponents hailed it as a means to improve design, shorten delivery times, and save money, at least for owners. Others, mainly lawyers, warned of all the potential legal nightmares that would result from blurring the lines between traditional project roles and mixing design with mean and methods.
So how is BIM doing? Well, many of our clients are using BIM — some collaboratively and some not. And so far we're not aware of any major legal problems caused by using BIM. This does not mean traditional disputes have declined or that there won't be any BIM-caused disputes in the future. But it does suggest that owners, designers, and contractors are working through — or maybe around — the potential legal challenges that come with the collaborative use of BIM.
This is a good thing. It shows that BIM can be used without unnecessary concerns about increased risk liability. Why BIM seems to have been successfully employed without too many obvious legal problems is hard to say for sure, but I have a theory. Some contractors use BIM more like enhanced CAD, not as a collaborative framework for project design and delivery. So the contractors don't encounter the added risk that comes with collaboration, transfer and use of vast amounts of shared electronic information. They simply enjoy the benefits of 3D modeling without the added complications related to the collaborative use of BIM. For example, one of our mechanical subcontractor clients uses BIM to model the design, identify interferences and conflicts, and develop solutions to these problems well before starting work.
What about those contractors who do use BIM more collaboratively, or who share information and models? From talking to some of these contractors, it seems they anticipated many of the potential legal implications that could result from blurring the traditional legal and practical boundaries between designer and contractor. Once anticipated, they have been able to avoid potential problems through careful contracting.
Here, in a nutshell, is how some of them have done this: start with one of the form contract BIM attachments, like the AIA BIM Exhibit 202-2008 or the Consensus Docs 310 BIM Addendum. Then apply traditional risk allocation principles: who is receiving what benefits from the model and/or the use of BIM? Who can best control the particular risk? Who can best absorb or insure against the risk? The goal should be the fair and rational allocation of risks.
Let's get a little more practical. The following checklist can help you think through BIM related issues if you intend to use BIM beyond its function as enhanced CAD.
- If you are going to rely on the model to build, it should be part of the contract documents or you risk inconsistencies with the 2D drawings.
- Contracts should contain an order of precedence clause, clearly identifying the order of precedence between three dimensional models and two dimensional drawings.
- Contracts should identify who is responsible for the accuracy of information provided to another party for use in a model.
- Consider assigning/disclaiming liability for errors or corruption created by transmission or transfer of data by recipients. You may want the contract to require designers to verify accuracy and completeness of data received or otherwise addressing responsibility for the accuracy and completeness of data. Consider requiring indemnification against claims arising out of errors or omissions created in the transfer of information process.
- Obtain insurance to cover risks to the model such as loss or corruption of data. Consider coverage for damages to other parties caused as a result of data corruption or loss. Are you covered if the job is delayed as a result of problems with your model?
- Understand what limitation of liability the vendor of the software will insist on. If stuck with a vendor limitation of liability, try to pass through the same limitation. If you cannot avoid responsibility for software problems, confirm that you have adequate insurance to cover damages caused by its failure.
- Consult with your insurance broker regarding the need for professional liability coverage/errors and omissions coverage if you plan to provide information that will be incorporated into the design model. Use disclaimers of responsibility/liability for the design. For example, clarify in your contract that you assume no responsibility for the design and that submittals or other information are provided solely for purposes of collaboration/efficiency, but always subject to the professional review, approval and coordination of the prime designer. And consider requiring an indemnity provision running from the owner and/or general for third party claims based on design defects
- If the project owner wants your model, insure you get a waiver of liability/indemnity for claims arising out of the owner's use of the model.
- If your model contains confidential or proprietary information from you or your subcontractors, make sure the appropriate confidentiality/restricted access provisions are in the contract.
- Make sure these provisions and other provisions are passed through to your subcontractors and vendors.
If you're not using BIM, or if you're not using it to its collaborative potential, it shouldn't be because of concern about added risk of liability. A little self education and good contracting can reduce or eliminate most risks while opening the door to greater competitiveness. If you’re still unsure, talk to your lawyer. He or she may be able to alleviate your concerns.
Michael Callahan is a partner at Stinson Morrison Hecker LLP (the same firm as long-time columnist Susan McGreevy) where he assists clients with all aspects of their construction law needs, including litigation.