One of our clients was recently surprised to see a consultant engineer request a complete exclusion of liability relating to terrorism. Could this be correct, especially for a project in central London? In many cases, shouldn’t designing to take account of terrorism, unpredictable and callous though it is, be an essential part of the professional team’s job?
The suggested exclusion was in very broad terms. Basically it said:
- The consultant has no responsibility for designing or advising on measures to prevent or mitigate terrorism.
- The consultant has no liability (whether in contract, in negligence or otherwise) for claims arising out of terrorism, save to the extent covered by professional indemnity insurance. (You may well wonder what, if anything, this “saving” gives a client, given the wording summarised in the first bullet. It is also a good example of the discredited “evaporation clause”).
Understandably, terrorism itself was also defined widely. It covered “any acts” including the threat of violence or harm caused to life or property for political, religious or ideological purposes.
Now, wording like this has been in circulation for years, but prompted by our client we did a little digging and a bit of thinking.
A good starting point is the RIBA guidance on designing for counter-terrorism (2010). Although published a few years ago, it recommends a balanced approach which still holds good. The guidance’s foreword states that:
“it is incumbent upon all of us with a professional interest in the built environment, whether engineers, architects, surveyors or developers, to consider [terrorism] threats and risks in detail, and then to address them in an imaginative, sustainable and proportionate way.”
The emphasis on a proportionate approach is key. Mitigating the risk of terrorism should doubtless be an important aspect of the design (say) of a financial institution’s headquarters in central London, or a major international sporting venue. Similarly, one would think that the design process for central government facilities ought to consider mitigation of terrorist attack.
But it’s likely that the design of housing in the countryside will involve little or no consideration of terrorism. (Although what if the project in question is an oligarch’s mansion, or housing for military personnel?)
Government itself publishes a range of guides on protecting crowded places from terrorist attack. The guides provide advice for the owners, operators and managers of properties in various sectors (for example shopping centres, bars, restaurants and places of worship).
One of these, Protecting crowded places: design and technical issues (revised 2014), gives detailed advice on incorporating counter-terrorism design into new projects. It is intended for anyone involved in the planning, design and development of such projects.
The guide recognises the need to adopt measures in a way that isn’t “one size fits all” and to integrate these with urban design principles.
The government guides will influence planning authorities’ approach to the risk of terrorism. In some cases, the design and access statement for a planning application will specifically need to address the risk.
So there is no shortage of balanced material recommending approaches to dealing with the all too real risk of terrorism.
What is the issue for consultants?
If it will often be reasonable to take terrorism into account, why do some consultants (or, at least, their insurers) object to taking responsibility for the necessary design?
I think there are two reasons:
- Scope of PII policy: Some (if not all) professional indemnity policies exclude terrorism from cover. For example, a policy may exclude:
“Any loss, damage, cost or expense of whatsoever nature directly or indirectly caused by, resulting from or in connection with any act of terrorism regardless of any other cause or event contributing concurrently or in any other sequence to the loss.”
Again, this is broad wording. The exclusion of terrorism cover from PII policies may reflect the availability and cost of obtaining cover in the specialist terrorism reinsurance market.
- Risk management: Some consultants may say that they are uncomfortable in being required to take account of terrorism, particularly given the brutal ingenuity of some terrorists. As such, they will be reluctant to “warrant” that a building will be, to any extent, terrorist proof. They may also point to the potentially high quantum of any claim.
Is this reasonable?
However, I do wonder whether across-the-board exclusions of liability for terrorism-related claims are really appropriate.
As many consultants and their insurers appear to accept, designing to take account of terrorism may be an obvious and necessary part of a particular project. The obligation to deliver the design will, of course, be subject to reasonable skill and care, so there is no question of the design being expected to counter every conceivable terror threat.
A fairly typical clause such as “to use the reasonable skill and care of a designer experienced in designing projects similar to the [project in question]” may well import a general requirement to take account of terrorist risks, if the project is of a kind or in a location that makes it a potential terrorist target. Given the amount of readily available guidance on dealing with terrorism, it would seem odd to hold otherwise.
So it seems strange, perhaps even lacking in credibility, for a consultant to seek to exclude all liability for terrorism on such projects. If that is so important to him, is he the right consultant with the right PII for the job? (In fact, there may be merit on some projects in going in the other direction and expanding the skill and care wording to require express compliance with relevant anti-terrorism guidance. That would seem unexceptionable and would give clarity to both the client and consultant.)
Finally, in many cases (one hopes) terrorism is such a slight risk that there is no need to make specific allowance for it anyway. In which case, why even ask for the exclusion?