Self-Certification and Third Party Plan Reviews

In response to budget and staff reductions, many jurisdictions responsible for building regulation are seeking alternative methods to the standard plan review process. In my locale, the City of Phoenix has introduced two new programs that shift some of the plan review responsibility to people and organizations other than the city itself. However, there may be some repercussions for participating in programs of these types.
The City of Phoenix (Arizona) recently initiated a Self-Certification Program (http://phoenix.gov/DEVSERV/scpindex.html) that permits qualifying projects to avoid the City's plan review process by allowing licensed design professionals to "certify" that their projects comply with the City's codes and ordinances. Only the design professional of record may self-certify a project, thus, it can not be contracted out to a third party. Self-Certification is not new—Chicago and New York City have similar programs, with New York's coming under fire for mismanagement by the City and abuse by design professionals.
 
The City of Phoenix also offers a Third Party Building Plan Review Program (http://phoenix.gov/DEVSERV/thirdparty.html).   This program essentially allows an employee of the firm (but not involved with the design of the project) or an outside consultant to review the plans for code compliance. The types of projects that can qualify for this type of plan review are much broader than those permitted under the self-certification program. The program requires that third party plan reviewers be certified plans examiners from the International Code Council (ICC). Exceptions to that include certifications from International Association of Plumbing and Mechanical Officials (IAPMO) for plumbing plan reviews and registered structural engineers for structural reviews. The program is not a substitution for the City's standard plan review process; however, it does state that plan review turn-around times will be cut in half.
 
But, before jumping on the optional-plan-review-program band wagon, you may want to consider some potential consequences—primarily, how it may affect your professional liability insurance premiums.
 
As a code consultant in the Phoenix metropolitan area, I was interested in the Third Party Plan Review Program, and I have also been asked by some of my clients about the Self-Certification Program. But, as a professional liability policy holder, I thought I'd ask my insurance broker about Phoenix's programs to respond to my clients' questions, specifically about the Self-Certification Program, to see if participating in such a program would affect a policy holder's coverage. My broker was unaware of the programs and agreed with my concern and, in turn, queried several of the insurance companies they represent.
 
In response, my broker received comments from three of the largest professional liability insurers in the country. On the subject of self-certification programs, comments from these insurance companies include the following:
 
·         "An obligation or an opportunity to 'self-certify' code compliance by itself is not looked on as increasing or decreasing risk since state registration laws essentially state that the designer-of-record is certifying that a design meets the applicable building codes whenever the submitted documents are signed and sealed."
·         "No increase in claims frequency or severity so far documented and therefore no increase in the cost of insurance coverage. (Other carriers, however, might use this opportunity to increase rates.)"
·         "There are a few issues with this certification. We typically modify 'certify' with ‘to the best of my knowledge, information, and belief' and tie the requirement to comply with applicable laws to the standard of care and delete the requirements to comply with 'all' applicable laws."
·         "[One] sentence states that if the 'submitted plans do not conform to all such laws, <the certifying professional> agree<s> to immediately take all remedial measures within <the certifying professional's> control, to meet [the Development Services Department's] requirements.' This seems to go beyond what a design professional represents by putting their stamp on a set of plans in the normal course."
 
Although the issue for self-certification was murky at best, one of the insurance companies commented on third party plan reviews indicating that that type of program is definitely a game changing event. In its response, the insurance company stated
 
There are some real problems when a firm reviews for approval the plans and specifications produced by another firm. When a firm takes over the government's ministerial duties it is exercising the police powers of the sovereign without the protects [sic] provided to the sovereign.
 
The insurance company commented further that if there were non-code-complying elements of a design, or if the review of the design was not in a timely and fair manner, the third party reviewer could be held liable and subject to suit by the owner and project designer—a position to which the government would not be subjected.
 
As you can see, there are some concerns with either type of program. My only suggestion is that you should contact your professional liability insurer before participating in such programs. The last place you would want your firm is in a situation which may be considered uninsurable by your professional liability insurer.

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