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Hyett urges staff caution after Lords' landmark liability ruling

RIBA president Paul Hyett has asked the institute's practice specialists to look into the consequences of a landmark House of Lords decision which makes individuals liable if their employers go bust or have inadequate insurance.

Hyett is particularly keen to see what the RIBA's own brokers have to say about 'run on' clauses, which come into effect after an individual has left their employer.

The Merrett v Babb case centred on a surveyor who, after his employer became insolvent, found himself liable for a mortgage valuation he had given seven years ago. The decision of the House of Lords, which upheld an appeal case Babb had already lost, will affect all professionals such as architects and surveyors who provide advice on behalf of their employers.

Hyett told the AJ that he thought that architects should respond to the ruling by making sure that either their own professional indemnity insurance (PII) was adequate, or that the insurance provided by their employer was up to scratch. And employees should insist on seeing that they are adequately covered by PII - even if their employer is reluctant to open the files.

'Staff should be extremely careful in all firms, ' said Hyett. 'They should see the importance of seeking an assurance that the company for whom they are working is adequately insured for the type of work being done.'

Hyett also said that in any case, firms and individuals could take a few simple steps to help reduce the risk of being sued:

practices should get into the habit of checking each other's work.At Hyett's practice Ryder, senior staff regularly check projects in which they are not involved;

staff should only sign letters commensurate with their experience; and employees should get out of the habit of signing letters personally - correspondence should be from the practice.

'Staff should cease the stupid practice of signing letters in the first person. Everything should go towards 'we', making an audit trail against an individual more difficult, ' he said.

Robin Vaughan, chief executive of the ARB, agreed with Hyett's analysis.

'The ruling makes the point that the ARB has been making for some time - that PII is vital for the protection of architects, ' he said.

'You have to have appropriate PII in place. And if your employer refuses to let you see the PII they have in place for you, you might question whether they are a good employer.'

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