Liability and Green Buildings

Recent years have seen a large growth in the number of so-called green buildings, but concerns exist about these practices opening up new areas of liability for engineers. While the number of actual lawsuits directly related to engineers’ liability related to green or LEED-certified buildings remains small, increasing pressure, especially by owners through onerous contractual clauses, requires engineers to be vigilant in avoiding pitfalls that could lead to significant liability.

One common misconception is that the terms “LEED certified” and “green building” are interchangeable. They are not. The term “green building” can apply to any building that meets certain performance standards, usually related to construction materials or techniques, heat loss, energy consumption and water consumption.

LEED (Leadership in Energy and Environmental Design) certification in Canada is obtained through the Canada Green Building Council, a private corporation which uses the LEED mark through a licence agreement with the US Green Building Council. To obtain LEED certification, an owner follows a set of predefined criteria and then applies to the Canada Green Building Council. There is no guarantee in advance that the application will be granted.

Since LEED certification is ultimately obtained through a third party, it could be quite dangerous for an engineer to warrant or guarantee that at the end of construction LEED certification at any particular level (Silver, Gold, Platinum) will be obtained. If, for whatever reason, the licensing body does not issue the desired certification, the engineer is left with a potential breach of contract claim by the owner as a result of actions not entirely within the control of the engineer.

There are of course obvious benefits to LEED certification. It is an easy shorthand form of demonstrating that the building has met certain pre-defined standards. It allows for some level of comparison of different buildings, and it has the benefit of an approval from what is seen to be an independent, unbiased organization. But references to LEED standards in a contract need to be carefully scrutinized to avoid such problems as those described above.

Another pitfall that has resulted in litigation in the U.S. involves a classic lack of clarity between the expectations of the owner and the engineer. In Control Air Conditioning Corporation v. WSP Flack & Kurtz, Inc. for instance, the owner, engineer and contractor appeared to disagree over what was meant by a requirement to design an HVAC system to a “LEED-like standard.” The owner was not happy with the final product, while the contractor claimed the engineer had applied too rigorous a standard in its specifications for the system.

One solution that appears attractive is to use performance based language in a contract. This is a common feature of design-build contracts. It has the attraction of a clear, objective, measurable standard. Many municipal codes that address green buildings rely upon performance based objectives such as specifying the amount of water consumption, energy efficiency and heat loss as the basis for incentive programs that reward green buildings. Any contract that refers to such standards still needs to be scrutinized to ensure the standards are in fact attainable, but at least the actual expectations of the owner are clearly spelled out.

The biggest potential for liability in such performance based contracts lies in the fact that often novel materials, construction techniques or equipment are required to meet the greener standards. In Chesapeake Bay Foundation Inc., et al. v. Weyerhaeuser Company (U.S. District Court, Maryland, 2012), a new wood based construction material was said to have been improperly exposed to outside weather, resulting in deterioration to the point of becoming a safety hazard. While the claim was ultimately dismissed because a limitation period had expired, the case highlights the importance of exercising due diligence when using novel materials to ensure that construction methods are adapted as necessary to take into account any unusual properties of the new material.

In its most recent annual report, the Canada Green Building Council states that by the end of 2012 there were “over 60 million square metres of LEED project space registered and certified in Canada,” bringing the total to 4,000 registered and 900 certified LEED projects. These numbers can be expected to continue to grow in the years to come. Continued vigilance over contractual language is required in order to minimize the risk of such environmentally well intentioned projects turning into litigation nightmares. cce

Bryan J. Buttigieg is a certified specialist in environmental law with Miller Thomson LLP in Toronto.