F - Practice Conduct & Office Mgmt

Question 1

What are the types of practice?

Answer 1

Sole practitioner
Partnership
LLC
Joint Venture

Question 2

What is PI Insurance?

Answer 2

Protects against claims for breach of professional duty or negligence resulting in financial loss.
Purchased annually

Question 3

Where can you buy PI Insurance?

Answer 3

Join the NZ Architects Cooperative Society (NZACS) then can buy from Acanthus insurance group

Question 4

How long are contractural and negligence liability periods?

Answer 4

6 and 10 years

Question 5

What does the H&SaW Act 2015 mean?

Answer 5

A PCBU is defined as the primary duty holder to ensure safety in the workplace.
As designers PCBUs must take “all practicable” steps not to create risks for those who construct, use, maintain or demolish a workplace or structure.

Question 6

What is a PCBU?

Answer 6

An individual or company responsible for the health & safety of its officers and workers.

Question 7

What is public liability insurance?

Answer 7

Protects against claims from third parties for injury or property damage suffered due to your business’s actions.

Question 8

What is tort law?

Answer 8

A tort arises when one party breaches their obligations or duty of care to another party resulting in that party experiencing damages.

Question 9

What is statutory insurance?

Answer 9

Covers for unintentional breaches of statutory law. Registered Architects Act, H&S Act etc.

Question 10

What is the Architects Act 2005?

Answer 10

Sets out legal responsibilities of Registered architects.
Establishes procedural requirements must be in place.
Protects the term ‘Architect’

Question 11

What is the Architects Rules 2006?

Answer 11

Registered Architects are bound to these rules including the code of ethics.
Describes minimum standards for Registered Architects

Question 12

Why would you consider a LLC?

Answer 12

OPEN ANSWER

Question 13

What is the Employment Relations Act 2000?

Answer 13

establishes obligations of employers and employees in their contractual relationship. It contains minimum standards relating to pay, conditions and termination, and
indicates procedures for grievances and strikes.

Question 14

Is a business or its directors a PCBU?

Answer 14

(WIP) Business, Directors are officers.
An officer is a person who holds senior leadership and has the ability to significantly influence the management of a PCBU. An officer of a PCBU must exercise due diligence to ensure that the PCBU complies with its duties

Question 15

How does the contractual limitations act 1950 relate?

Answer 15

Repealed by 2010 Act

Limitation laws prevent certain legal claims being brought against a person or company after a defined period of time.

Question 16

What is the contractual mistakes act 1977?

Answer 16

NOTE THIS ACT HAS BEEN SUPERSEDED
to mitigate the arbitrary effects of mistakes on contracts by conferring on courts appropriate powers to grant relief in the circumstances mentioned

Question 17

How does the privacy act 1993 relate to practice of architecture?

Answer 17

promote and protect individual privacy, and in particular to establish principles on:
collection, use, and disclosure of information relating to individuals; and
access by individuals to information held about them.
The Act covers both the public and private sectors.

Question 18

Outline the Copyright Act 1994?

Answer 18

gives copyright owners the exclusive right to …
Client is the owner
Note that the AAS contains standard conditions that supersede this act and maintain copyright with the architect while granting a one off licence for the purpose of construction & maintaining the structure.

Question 19

Outline the limitations act 2010?

Answer 19

Limitation laws prevent certain legal claims being brought against a person or company after a defined period of time. They provide a defence against old claims and give certainty in relation to legal liability for past events.
Repeals 1950 Act
Note the Building Act as a 10yr limitation rather than 6yrs in this act.

Question 20

How would you best monitor client satisfaction?

Answer 20

OPEN ANSWER

Question 21

What is ethical practice?

Answer 21

Exercising unprejudiced & unbiased judgement
Conducting professional work with due care & diligence
Pursue professional activities with honesty & fairness

Question 22

What penalties may be imposed if the complaint is upheld?

Answer 22

a. fines up to 10K
b. require supervision or training
c. suspension architects registration

Question 23

How might one assess risks?

Answer 23

By creating a risk matrix including what the risks might be, their likelihood of occurring, the
cost if things should go wrong, and how these might be proactively managed, avoided,
transferred or insured against.

Question 24

How can practices and directors gain a degree financial protection themselves?

Answer 24

1. trusts
2. limit liability through incorporation of practice owning and operating entities
3. set up separate asset owning and operational entities

Question 25

What is the minimum amount for PI Insurance?

Answer 25

$250K

Question 26

What is a loss leader?

Answer 26

A loss leader is a product or service that is offered at a price that is not profitable, but it is sold to attract new customers or to sell additional products and services to those customers. Loss leading is a common practice when a business first enters a market.

Question 27

What is the difference between Negligence and Gross Negligence?

Answer 27

Negligence = failure to use the level of care and caution that an ordinary person would use in similar circumstances ie. careless mistake or inattention that causes an injury.

Gross negligence = deliberate and reckless disregard for the safety and reasonable treatment of others.

In both cases must directly cause harm to another person, another person’s property, or both.

Question 28

What is working capital?

Answer 28

A financial metric which represents operating liquidity available to a business, organisation or other entity, including governmental entities. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital.

Question 29

Why might you need Statutory Insurance?

Answer 29

For claims against you using the code of ethics

Question 30

Should separate consultants have the same PI and liability as us?

Answer 30

(WIP) Yes we need them to have comparable levels. SPA have this in the AAS.

Question 31

When does the liability period begin for Architects?

Answer 31

(WIP) Murky area of law and goalposts move

Question 32

Why might you use lump sum or cashflow invoicing?

Answer 32

Works well for contract observation.
Cashflow option is normally client driven
For a small business cashflow upfront is helpful

Question 33

What are some pros & cons of competitions?

Answer 33

Limited/no design interaction with the client and usergroup.
Often changes substantially after commission awarded.
Ignores the complexity of the process.
IP is given away

Question 34

What should you do if an employee with particular skills leaves the office and was the reason you won a commission?

Answer 34

Ethics - tell client if they were central to the selection.

Sometimes contracts have key person bonds (eg 50K)

Question 35

What is companion cover?

Answer 35

Companion Cover complements the Professional Indemnity Insurance offering and fills more of those risk gaps that may arise from your business activities:

• General Public Liability Insurance
• Statutory Liability Insurance
• Directors and Officer Liability Insurance
• Employers Liability Insurance
• Employment Practices Liability Insurance
• Cyber Liability Insurance

Question 36

What is a Form 1 CCA claim?

Answer 36

Information that must accompany all payment claims - text page.
What this is?
What should I do?
When?
What if I dont act?
Disagree?
Delay?

Question 37

What is tort limitation period?

Answer 37

6 years but unlear in law.

Illness may be longer.

Question 38

What is vicarious liability?

Answer 38

Employer responsible for employee.

Vicarious liability refers to a situation where someone is held responsible for the actions or omissions of another person. In a workplace context, an employer can be liable for the acts or omissions of its employees, provided it can be shown that they took place in the course of their employment.

Question 39

To what extent would damages be rectified under contract vs under tort?

Answer 39

Contract Breach = back to same position as before breach

Tort = All losses suffered including consequential, emotional distress and exemplary charges (fines = gross negligence)