Wednesday, November 8, 2017 - 12:00

Existing law provides, with respect to contracts and amendments to contracts entered into on or after January 1, 2011, with a public agency, as defined, for design professional services, that all provisions, clauses, covenants, and agreements contained in, collateral to, or affecting these contracts or amendments to contracts that purport to require the design professional to defend the public agency under an indemnity agreement, including the duty and the cost to defend, are unenforceable, except for claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the design professional. Existing law provides that all contracts and all solicitation documents between a public agency and a design professional are deemed to incorporate these provisions by reference.

With the passage of SB 496, these provisions will be applicable to all contracts for design professional services entered into on or after January 1, 2018. The new law prohibits the cost to defend charged to the design professional from exceeding the design professional's proportionate percentage of fault, except that in the event that one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, the new law requires the design professional to meet and confer with other parties regarding unpaid defense costs and provides for certain exemptions to these provisions.

You can access the complete bill language at https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB496.

PARMA is seeking input from members who have recommendations or samples of revisions to the indemnity provisions in the agreements for design professionals.  If you have samples, please e-mail those to Executive Director, Gloria Peterson at ed@parma.com