CONSTRUCTION LIABILITY law must be changed to address the spiralling cost of professional indemnity insurance, says the Association of Consulting Engineers.
ACE chief executive Nelson Ogunshakin said: 'UK engineering consultancy firms are facing intolerable business pressures, brought on by PI insurance premiums which in some cases are equivalent to up to 6% of their annual turnover.
'They also face rocketing claims excesses and an increasing number of limitations to their cover, the current situation is unsustainable.
'Many of our member companies are finding it increasingly difficult to operate within a legal framework in which they are regarded as the financial guarantor for other parties to a contract when claims arise.
'The current system of joint and several liability discriminates against firms, irrespective of blame, making them responsible for the failings of other parties over which they have no control.'
ACE believes there is a growing tendency for consulting firms to be included in a claim purely because they are likely to carry insurance, even where they have little, if any, potential liability.
The association is lobbying the government to promote a bill to change the law on joint and several liability in the construction industry. It wants the bill to include statutory capping to alleviate the problems of disproportionate liability.
Ogunshakin said: 'Only by removing the discriminatory system and replacing it with some form of proportionate liability, together with sensible insurance premiums and excesses, can we be assured of a construction industry where companies can succeed in business and where clients and end users get the best possible outcome.'
A copy of the ACE report, Professional indemnity insurance and joint and several liability in the construction industry - the case for reform, can be downloaded from the press releases area of the ACE website at www. acenet. co. uk/news/releases