As we have previously posted, we have been closely monitoring Senate Bill (“SB”) 286 and House Bill (“HB”) 575, which have moved quickly through their respective committees and chambers with little opposition. On March 27, 2013, the Senate passed SB 286 by a 37 to 1 vote. SB 286 was then substituted in place of HB 575 (thus tabling HB 575). Subsequently, the House passed SB 286 by a 103 to 13 vote on April 17, 2013.
SB 286 is now being converted into an “act” for presentation to the Governor. If presented while the legislature is in session, the Florida Constitution allows a 7-day period following presentation of the act to Governor Scott within which Governor Scott can either sign or veto the bill. If the legislature adjourns sine die before an act is presented to the Governor or while an act is in the Governor’s possession, the Governor has 15 days from the date of presentation in which to take action. The last day of this year’s regular legislative session is May 3, 2013. There is no indication that Governor Scott intends to veto this bill.
The version of SB 286 that ultimately passed both the Senate and House was similar to the originally-introduced bill. The only material amendment to the original version of the bill was the addition of geologists within the act’s definition of design professional.
The act permits business entities providing professional services to limit by contract the liability of their individual employees or agents for negligence arising from the performance of professional services under a contract. Florida courts have routinely held that provisions within in a professional services contract which place limitations on the liability are enforceable as to the professional association/business entity only and have not extended the contractual limitations of liability to the individual professionals performing the contracted services on behalf of the professional association/business entity. The act provides the professional association/business entity the ability to extend the contractual limitations of liability to the individual professionals it employs.
The act, if executed by Governor Scott, will take effect on July 1, 2013. The Legislature has not expressed an intent that the law apply retroactively. For the protections afforded to design professionals to be enforceable, the professional services contract must comply with the requirements of the act, one of which is to “include a prominent statement, in uppercase font that is at least 5 point sizes larger than the rest of the text, that, pursuant to this section, an individual employee or agent may not be held individually liable for negligence.” Due to the act’s contract requirements, it is very unlikely that this law can be retroactively applied because it is impossible for existing contracts to contain the disclaimer or waiver. Therefore, we do not anticipate any successful litigation with respect to the retroactive application of the law to contracts in effect before July 2, 2013.
Nonetheless, it will be prudent for design professionals – architects, interior designers, landscape architects, engineers, surveyors, and geologists – and their related business entities to familiarize themselves with this proposed new law and ensure strict compliance with the contractual requirements of the law moving forward.
We will provide a final update on the Design Professional Bills and the new Florida Statute the Design Professional Bills propose, § 558.0035, Florida Statute, when Governor Scott either signs or vetoes the bill.