The basic liability of an architect is to prepare faultless project documentation and, according to the civil code, an architect must carry out its designs in accordance with good building practice. The client takes delivery of the architect's plans on payment of an agreed fee. The importance of such agreements in Poland should not be underestimated by the client in terms of making the project attractive to investors.
There are certain features of the Polish civil code and the way in which the Polish courts interpret it that highlight the need for investors to undertake thorough due diligence and for developers to take great care with the construction and design documentation. Fortunately, under the code's "freedom of contract" principle, it is possible to modify the rules that affect an architect's liability.
The civil code provides for indemnification by the architect for any damage caused by defects in the architect's designs. However, in order to make such a claim, the client must be able to prove the extent of its losses and then prove that those losses were in fact caused by the fault of the architect. If this can be proved, the client would be indemnified for costs incurred and any consequential loss arising, for example, out of delays in the completion of construction. However, this causal link can be difficult to prove, and furthermore it is difficult to discover defects in the architect's plans until they have been used and the building constructed.
A peculiarity of Polish law is that the time limitation on claims against the architect are linked to taking delivery of the design documentation, with any claims being time-barred after two years. This creates an obvious difficulty where construction is completed more than two years after defective plans were delivered.
Ideally, the legal relationship should continue at least until construction has been completed and the project is handed over to the client. Also, it would be preferable to hold the architect jointly liable with the contractor for the consequences of any faults in the project.
However, to date, the decisions of the Polish courts have not been helpful. They have shown a tendency to separate the liability arising out of the agreement with the architect and of the building contract. In addition, the courts have been keen to place the onus on the client to check there are no faults in the architect's designs. Clearly this is difficult. These principles are not easy for investors (especially foreign investors) to accept when financing construction projects in Poland.
Therefore it is essential that the client negotiates the architect's agreement in order to extend the architect's liability beyond the basic principles of the civil code. A convenient way to pursue claims against the architect is to insist on a warranty in the architect's agreement.
The client should negotiate the warranty so that liability arises if defects in the project reduce the usefulness or value of the project. In such circumstances, the client would be entitled to demand removal of the fault within a certain period, and after expiry of that period the client would be entitled to reduce the fee or to terminate the architect's agreement if the fault is significant. In either case, there is no need to establish that the architect was at fault, just that certain criteria have not been met.
The client must act within one month of discovery of the defect and, unless otherwise agreed, the powers of the client under the warranty will expire one year after the designs are delivered.
So, although the limitations of the Polish civil code may cause concern to investors and developers in Poland because the remedies available for defects caused by architects do not fully secure their interests, there is nothing in the law to prevent the client from requiring that the architect gives a warranty that exceeds the provisions of the code.
This article was co-authored by Tomasz Piotrowski of Linklaters, Warsaw and Victoria McKinnell of Linklaters, London.