7.103 Flashcards
Why was the Agreement for Separate Consultants Services withdrawn?
It could create a potential conflict for the NZIA Practice due to limitations on the Consultant’s liability to the Client.
What is required to avoid conflict risk when engaging a Consultant?
The Client’s prior informed consent to the limitations on the Consultant’s liability.
What is the recommended legal course for engaging Separate Consultants?
Have the Consultant engaged directly by the Client, with liability limitations agreed between the Client and the Consultant.
What do most engineers and consultants prefer regarding their engagement contracts?
They wish to be engaged under their standard engagement contracts, often with liability limitations and insurance requirements favorable to the Consultant.
What should an NZIA Practice do regarding liability limitations and insurance cover?
Act as an intermediary and pass on the Consultant’s proposed engagement agreement to the Client.
What should an NZIA Practice recommend if the Client does not understand proposed provisions?
Recommend that the Client obtains legal advice.
What is the first step in the NZIA’s recommended procedure for engaging a Separate Consultant?
Invite firms to submit a proposal for fees and services for the work.
What must the NZIA Practice obtain before sending a letter of offer to the Consultant?
The Client’s prior approval to the contents of the letter.
What happens if the Consultant signs and returns the letter of offer?
There will be no limitations of liability applying to the engagement; common law will apply.
What should the NZIA Practice do if the Consultant wants to be engaged under their standard contract?
Forward those terms to the Client for acceptance or proposed amendments.
Why is the section on required minimum insurance in the letter of offer important?
It provides the most protection for the Client against losses due to the Consultant’s default.
What are the default minimum levels of Professional Indemnity and Public Liability cover suggested?
- $250,000 for Professional Indemnity cover
- $1 million for Public Liability cover
What should the NZIA Practice consider regarding insurance amounts?
Whether the amounts for Professional Indemnity cover should be higher based on project specifics.
What action should the NZIA Practice take regarding minimum insurance levels?
Discuss with the Client and obtain their prior approval to the minimum levels stated in the letter.
What additional advice may be needed regarding insurance?
Insurance/legal advice about appropriate levels of minimum insurance.
