text: NZRAB Disciplinary costs – NZACS
  NZRAB Disciplinary costs
  NZRAB's recent newsletter sets out their revised approach to the allocation of the costs of complaints. They indicate that if a complaint goes to review by the Investigating Panel, the costs recoverable from the architect are likely to be in the order of $5000, and if it proceeds to a Disciplinary Hearing, $60,000. NZACS's insurance brokers Aon advise that the current PI policy wording is limited to the costs of defending the complaint, and does not extend to costs awards against the member. NZACS Statutory liability insurance includes prosecution costs as part of the penalties cover, however there are limitations around the type of NZRAB complaint covered by this policy.
  That means that a client suggestion of lodging an NZRAB complaint carries the threat of a substantial uninsured loss.
  NZACS's view – made known to both NZRAB and the LBP Board – is that disciplinary proceedings should not be put in hand until the civil claims are resolved. Despite the obvious logic of proving the case in a civil or contractual forum, both NZRAB and the LBP Board appear to be bound to pursue a complaint after only preliminary review.
  The terms of engagement provide for dispute resolution, and the path to negotiated settlements on sensible business terms is well-trodden. The outcome will indicate whether the architect should or should not face disciplinary action. But unfortunately, upset (or unscrupulous) clients consider that lodging a complaint carries minimal cost and no downside to them, whilst exerting leverage on the architect to settle on unfavourable terms. The architect who successfully defends faces the costs of the process and the client only loses face. The architect who unsuccessfully defends faces not only substantial uninsured costs but also the prospect that the outcome will establish precedent for a potential civil claim. There is room – and pressure – for the architect to admit to some of the claim in order to avoid uninsured costs: in this situation the client's case remains untested beyond a preliminary overview. NZACS is aware of such a case where the outcomes were driven by the client's untested allegations which were later found to be untruthful.
  The only good news in this matter is that the statistics indicate that the vast majority of complaints to the NZRAB are about architects who are not members of NZACS. This suggests that our members are aware of and manage their risks by attending to (at least) 3 key factors:
  Communications: Being alert to client attitudes and concerns, maintaining open communications with project stakeholders and keeping clients informed at all times. Taking the opportunity to see things from their point of view, and remaining humble enough to compromise when necessary.
  Obligations: Maintaining professional and technical competence, and seeking external advice when appropriate. Connecting with NZIA resources and fellow professionals including the NZACS Claims Committee members if required. Reviewing and confirming actions and obligations against the contract requirements.
  Records: Retaining good records in a way that can be easily referenced. Filing everything for later referral if necessary, digitising the hard-copies of documents when practicable, keeping regular file back-ups as well as on and off-site records.