Governor Signs Wolk bill to restore equity to public construction liability

Bill will prohibit unfair contract provisions receives overwhelming bipartisan support

SACRAMENTO– Governor Arnold Schwarzenegger today signed legislation by Assemblywoman Lois Wolk (D-Davis) to protect design professionals from unfair contract provisions that hold them responsible for other parties’ mistakes. 

“I authored this legislation because of several instances in my district where the community tried to build low- and moderate-income condominiums, but was unable to do so given that no builder could afford to undertake the projects,” said Wolk. “Some public agencies are forcing designers to assume ‘deep pocket’ liability for other parties’ mistakes.  My bill places responsibility for construction defects on the wrongdoer, where it belongs.”

Specifically, Assembly Bill 573 would prohibit public agencies from requiring engineers, architects and other design professionals to be responsible for the negligent acts and omissions of other parties. Their liability for their own construction defects remains unchanged.

“Ironically, this current practice of shifting liability does not protect public entities, or the taxpayer, for that matter.  This forced coverage is illusory,” Wolk continued. “Insurance policies do not cover these professional’s liability beyond the designer’s own negligence or willful misconduct, leaving public agencies and the taxpayer on the hook.”

Chuck Cunningham, engineer and owner of Cunningham Engineering Corporation in Davis, said the Governor’s signature of AB 573 was “critical to our industry.”

“This measure will strengthen the relationship between engineering firms and cities and counties, allowing our industry to help build a better California,” Cunningham said. “Both public agencies and engineering firms benefit from partnerships where both sides take responsibility for their actions. Ultimately, the winners are the residents of our communities.”

AB 573 is sponsored by the Consulting Engineers Land Surveyors of California and supported by the California Professional Association of Specialty Contractors, CH2M Hill, the American Institute of Architects California Council, the California Geotechnical Engineer’s Association, and the California Landscape Contractors Association--and more than 200 small, medium, and large businesses from throughout California.