Design firms in California are celebrating a new law enacted last month that limits their obligation to defend public owners from third-party lawsuits when there is no company negligence. But they remain concerned that the problem may still occur on projects for private-sector clients. The new law, signed by Gov. Arnold Schwarzenegger (R) on Sept. 30 and set to take effect on Jan. 1, was pushed by the American Council of Engineering Cos. of California. The law responds to two controversial court rulings, one in 2008 and one this year, that expanded the duty of design professionals to defend others.
The market is generally healthy and steadily growing, and margins are up for large specialty contractors. Further, advances in design tools and owner demand for collaboration are giving subcontractors a seat at the table early on in projects.