Liability of State Departments of Transportation for Design Errors (2017)

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56 plan or design. Moreover, a contractor or subcontrac- tor working on the same project as the design profes- sional for the project may have a claim as a third- party beneficiary against the design professional without any necessity of privity of contract. A design consultant or contractor may be held lia- ble for failure to comply with its required standard of care, exercise sound professional judgment in plan- ning and designing infrastructure projects, or comply with approved or prevailing standards. As noted, a design professional’s duty to exercise due care may extend to other parties working on the same project even though the design professional is not in privity of contract with the other project parties. Design–build contracts may be used by transpor- tation departments to transfer the risk and respon- sibility for the plan or design of a project from the department to a design–build contractor. Although a significant number of DOTs that responded to the survey stated that they use design–build contract- ing, several departments also stated that they have had insufficient experience with design–build con- tracting to state whether the method results in fewer claims by or against the department for plan or design errors or omissions. It appears that transportation departments are likely to have immunity for their discretionary deci- sion to place an item on or remove an item from an approved products list for safety or other reasons. Notwithstanding the discussion in the digest of the defective guardrails manufactured by Trinity, no DOT that replied to the survey stated that its department had made a claim within the past 5 years against a contractor for using a defective safety appliance or other product in the plan or design of a highway. Many transportation departments that responded to the survey reported requiring design consultants and contractors, including design–build contractors, to have insurance to cover costs and damages that result from a defective plan or design. Some trans- portation agencies have implemented an OCIP that may also apply to design–build projects in some cases, including E&O coverage. injuries caused by the planners’ or designers’ own neg- ligence when it is the proximate cause of an accident. Transportation departments may have a claim against design consultants and contractors for their defective plans or designs. Some departments reported having procedures for pursuing reimbursement from design consultants and contractors for plan or design errors and omissions; for example, when they fail to follow specifications. Design consultants and contrac- tors may also be held liable under the terms of their indemnity agreements for breach of contract or negli- gence in providing professional services. The general rule appears to be, however, that after a transportation department accepts the work, the department (or a third party) will be unable to hold a design consultant or contractor liable for a defective plan or design. The term “acceptance” means that a contractor has lost control of the work and any ability to alter it. The courts recognize some exceptions to the general rule, such as when the completed work has an inherently or imminently dangerous condition, includes conditions that are reasonably certain to endanger third persons, has a latent defect that is either deliberately concealed by the contractor or not reasonably discoverable by the owner, or results in a public nuisance. A contractor may bring a claim against a transpor- tation department when the department has provided the contractor with a defective plan or design. A trans- portation department may be liable for breach of an implied warranty when its plan or design contains inaccurate material information, fails to disclose mate- rial information, or makes a material misrepresenta- tion. There are judicial precedents holding that dis- claimers, exculpatory clauses, and waivers do not absolve a department of material nondisclosures, inac- curacies, or misrepresentations in connection with the plan or design for a highway or other project. Defective plans and specifications may furnish a basis for a claim by a purported third-party benefi- ciary against a transportation department that pre- pared the plan or design causing injury or contracted with a design consultant or contractor to prepare the APPENDICES The following appendices are available online at www.trb.org by searching for NCHRP LRD 74. Appendix A: State Statutes and Cases on Immunity for Discretionary Decisions Appendix B: State Statutes on Plan or Design Immunity Appendix C: State Transportation Departments Responding to the Survey Appendix D: Survey Appendix E: Summary of Transportation Departments’ Responses to the Survey Appendix F: Documents Provided by Transportation Departments