Rli Corp. · NYSE:RLI
Rli — Investor Presentation (September 2019)
54 slides from Rli's investor presentation, Sep 18, 2019
Slide 1: Learning When to Waive Good-Bye
Learning When to Waive Good-Bye RLI Design Professionals DPLE 195 September 18, 2019
Slide 2: AIA/CES registered provider statement
RLI Design Professionals is a Registered Provider with The American Institute of Architects Continuing Education Systems. Credit earned on completion of this program will be reported to CES Records for AIA members. Certificates of Completion for non-AIA members are available on request. This program
Slide 3: Copyright Materials
Copyright Materials This presentation is protected by US and International Copyright laws. Reproduction, distribution, display and use of the presentation without written permission of the speakers is prohibited. © RLI Design Professionals 3
Slide 4: To Waive or Not To Waive – That is the Question!
Course Description To Waive or Not To Waive – That is the Question! Understanding and evaluating common waivers in professional services contracts. This course will review important waiver provisions in design contracts, the risk they pose, and the actions that design professionals can take to manag
Slide 5: Learning Objectives
Learning Objectives Participants in this session will: 1 Identify common waiver clauses in design contracts; 2 Discuss important considerations when negotiating or drafting wavier provisions; 3 Discover ways to preserve contractual rights and mitigate exposure to risks inherent in waiver clauses; an
Slide 6: What is a Waiver?
RLI DIFFERENT WORKS CTD) ae Een (Gaon os
Slide 7: What is a Waiver?
What is a Waiver? Waiver relinquishment of a present or future right, claim, or privilege. Express v. Implied Conditional v. Unconditional Unilateral v. Bilateral Active v. Passive Defined by Black’s Law Dictionary at: www.thelawdictionary.org/waive/
Slide 8: Express v. Implied
Express v. Implied Express Waiver Written or oral statement of a party’s intent to relinquish their right, claim or privilege. Implied Waiver Waiver by conduct indicating a party’s intent to relinquish their right, claim, or privilege.
Slide 9: Sample Waiver Disclaimer Language
Sample Waiver Disclaimer Language “ Failure by either party to enforce any provision of this Agreement shall not be deemed a waiver of such provision or modification of this Agreement. A waiver of any breach of a provision of this Agreement shall not be deemed a waiver of any subsequent breach and s
Slide 10: Unilateral v. Bilateral
Unilateral v. Bilateral Unilateral Waiver Waiver by one party to the contract, without receiving a reciprocal waiver from the other party. Bilateral Waiver Waiver by both parties to the contract; reciprocal waivers.
Slide 11: Example
Example Unilateral v. Bilateral “Design Professional waives Unilateral Waiver consequential damages for Waiver is not reciprocated. claims, disputes, or other maters...” “Design Professional and Owner Bilateral Waiver waive consequential damages for Both parties mutually agree claims, disputes, or o
Slide 12: Conditional v. Unconditional
Conditional v. Unconditional Conditional Waiver Waiver is conditioned on the occurrence of an event or act by another. Unconditional Waiver Waiver occurs absent any condition or stipulation.
Slide 13: Example
Example Conditional v. Unconditional Conditional Waiver “Design Professional waives Waiver is conditioned on and releases…to the extent of receipt of payment from each payment received from Client. Client.” “Design Professional hereby Unconditional Waiver waives and releases all lien rights Waiver o
Slide 14: Active v. Passive
Active v. Passive “Acceptance of final payment Active Waiver shall constitute a waiver and Waiver triggered by release by Design Professional affirmative action. of all claims for damages or additional compensation…” “Failure to raise a claim regarding payment amount Passive Waiver within 3 days of
Slide 15: Analysis
Analysis 1 Rights and privileges What rights and privileges do you lose by agreeing to the terms of this provision/contract? 2 Liability What is your exposure to liability? 3 Discussion points Identify discussion points for your contract negotiations to manage and mitigate your exposure.
Slide 16: Ownership Rights
RLI DIFFERENT WORKS CTD) ae Een (Gaon os
Slide 17: Ownership Rights Analysis
Ownership Rights Analysis Waiver of Ownership Rights Waive rights to documents, materials, and other instruments of service used and created in connection with the project. 1 Rights and privileges Right to ownership and reuse, payment, involvement in use of documents. 2 Liability Liability for damag
Slide 18: Quiz
Quiz “ Client shall be the owner of all designs, drawings, documents, plans, specifications, maps, calculations, computer files, programs or models…whether draft or final, hard copy or digitalized, and whether maintained in electronic format or otherwise, made, conceived, developed, or prepared by o
Slide 19: Answer
Answer “ Client shall be the owner of all designs, drawings, documents, plans, specifications, maps, calculations, computer files, programs or models…whether draft or final, hard copy or digitalized, and whether maintained in electronic format or otherwise, made, conceived, developed, or prepared by
Slide 20: Case Law
Case Law Strutt Group Incorporated Nelson-Salabes, Incorporated (NSI) Project Owner Design Professional Project Suspended Morningside Development, LLC EDG Architects New Project Owner New Design Firm Design firm awarded $736k in damages when a new project owner terminates the firm and continues to u
Slide 21: License to Use
License to Use “ The Architect’s Drawings, Specifications or other documents shall not be used by the Owner or others on other projects, for additions to this Project, or for completion of this Project by others unless the Architect is adjudged to be in default under this Agreement, except by agreem
Slide 22: Sample Ownership Language
Sample Ownership Language “ § 7.2 The Architect and Architect’s consultants shall be deemed authors and owners of their respecting Instruments of Services…and retain all common law, statutory and other reserved rights, including copyrights… Ownership Rights Sample Language § 7.3 The Architect grants
Slide 23: Waiver of Ownership Rights
Waiver of Ownership Rights Mitigate risk by clarifying the following: Rights are granted only when paid in full Documents are project-specific; not for reuse Reuse without your involvement at Client’s sole risk Permitted to retain one record copy
Slide 24: Lien Rights
Lien Rights
Slide 25: Lien Rights Analysis
Lien Rights Analysis Waiver of Lien Waive rights to file claim against the real property on which design professional has bestowed labor or furnished material for the value of those services. 1 Rights and privileges Right to file liens and recover money owed. 2 Liability Non-payment for services dul
Slide 26: Lien Rights for Design Professionals
Lien Rights for Design Professionals Lien rights for design professionals differ by state. No Lien Rights No lien rights entirely. Lien rights subject to regulations Modified Lien Rights specific to design professionals. Same lien rights as those available Same Lien Rights to contractors.
Slide 27: Quiz
Quiz “ Design Professional hereby agrees and acknowledges that its rights to file a construction lien are hereby waived and released. ”
Slide 28: Answer
Answer “ Design Professional hereby agrees and acknowledges that its rights to file a construction lien are hereby waived and released. ”
Slide 29: Sample Contract Language
Sample Contract Language “ Design professional hereby agrees and acknowledges that its rights to file a construction lien…are hereby waived and released in consideration for, upon receipt of, and to the extent of all payments received by Design Professional Lien Waiver Sample Language ” hereunder.
Slide 30: Right to Trial
Right to Trial
Slide 31: Mandatory Arbitration Clause Analysis
Mandatory Arbitration Clause Analysis Waiver of Right to Trial Waive right to seek resolution of disputes through litigation. 1 Rights and privileges Right to resolve disputes through litigation and availability of the appeals process. 2 Liability Time, cost, governing law, and appeals process. 3 Di
Slide 32: Dispute Resolution
Dispute Resolution 3 Common methods of dispute resolution Mediation Arbitration Litigation
Slide 33: Conditions to Waiver of Trial Rights
Conditions to Waiver of Trial Rights To mitigate risk, consider the following: Mediation as an alternative RLI Policy If any Claim made against the Insured and reported to the Insurer during the Policy Period is resolved, with the Insurer’s consent and agreement, through the use of Mediation, the In
Slide 34: Conditions to Arbitration
Conditions to Arbitration Bilateral/reciprocal waiver Is mandatory arbitration reciprocal? Choice of arbitrator Who chooses the arbitrator? Is mutual agreement required? Choice of venue Who chooses the location? Is mutual agreement required? Applicable rules Construction Industry Arbitration Rules o
Slide 35: Quiz
Quiz “ Any controversy or claim between the Client and Design Professional arising out of, or related to this Agreement, or the breach thereof, shall be settled by binding arbitration if the Client, in its sole discretion, elects to arbitrate the controversy or claim in lieu of litigation. The elect
Slide 36: Answer
Answer “ Any controversy or claim between the Client and Design Professional arising out of, or related to this Agreement, or the breach thereof, shall be settled by binding arbitration if the Client, in its sole discretion, elects to arbitrate the controversy or claim in lieu of litigation. The ele
Slide 37: Consequential Damages
RLI DIFFERENT WORKS CTD) ae Een (Gaon os
Slide 38: Consequential Damages Analysis
Consequential Damages Analysis Waiver of Consequential Damages Waive right to seek recovery of foreseeable damages in the event of a breach of contract by Client. 1 Rights and privileges Right to recover foreseeable damages indirectly resulting from Client’s breach of contract. 2 Liability Liability
Slide 39: Examples
Examples Lost Profits Loss of Use Loss of Rent Interest and Finance Charges Additional Labor Costs Material Escalation Costs Depreciation Loss of Productivity and Efficiency
Slide 40: Hypothetical
Hypothetical Delayed completion of an apartment building. Delayed completion of a retail location.
Slide 41: Case Law
Case Law Four month delay resulted in $14.5 million awarded in lost profit damages to Owner, where the contract with Plaintiff was for $600,000. Greate Bay Hotel & Casino, Inc. “Reasonably foreseeable” because Perini Client was aware of: 1) Purpose of project; 2) Client’s desire and need to finish t
Slide 42: Sample Contract Language
Sample Contract Language “ The Architect and Owner waive consequential damages for claims, disputes, or other matters in question, arising out of or relating to this agreement…” Consequential Damages Sample Language ” AIA B101-2017 § 8.1.3
Slide 43: Subrogation Rights
RLI DIFFERENT WORKS CTD) ae Een (Gaon os
Slide 44: Waiver of Subrogation Analysis
Waiver of Subrogation Analysis Waiver of Subrogation Waive right for someone to “step into your shoes” and pursue recovery. 1 Rights and privileges Right for insurance to seek reimbursement from responsible party. 2 Liability Can affect insurance premiums and coverage. 3 Discussion points Bilateral
Slide 45: Waiver of Subrogation
Waiver of Subrogation Owner causes injury Insurer Insurer seeks compensates restitution from Design Owner Professional Insurer “steps into the shoes of” Insured
Slide 46: Quiz
Quiz “ Design Professional, and all of its insurers, shall agree to waive all rights of recovery or subrogation against the Client, its directors, officers, employees, agents, successors and assigns, and the Client’s insurance companies arising out of any claims for injury(ies) or damages resulting
Slide 47: Answer
Answer “ Design Professional, and all of its insurers, shall agree to waive all rights of recovery or subrogation against the Client, its directors, officers, employees, agents, successors and assigns, and the Client’s insurance companies arising out of any claims for injury(ies) or damages resultin
Slide 48: Insuring Agreement
Insuring Agreement RLI Policy In the event of any payment under this Policy, the Insurer and the Insured may have the right to recover all or part of any payment the Insurer or the insured makes under this Policy…The Insured must do nothing to impair [right of subrogation] …The Insurer waives its ri
Slide 49: Enforceability and Validity of Waivers
Enforceability and Validity of Waivers
Slide 50: Enforceability/Validity Analysis
Enforceability/Validity Analysis Enforceability/Validity Generally, a court may find a waiver to be unenforceable or invalid for one of three reasons 1 Unjust result Enforcement of the waiver would lead to an unjust result. A common argument under this rationale is unenforceability due to “unconscio
Slide 51: Case Law
Case Law Eric Lucier and Karen Haley Cambridge Associates, Ltd Clients Professionals “ …Client agrees that, to the fullest extent permitted by law, CAL’s total liability to Client for any and all injuries, claims, losses, expenses, damages or expenses arising out of this Agreement from an cause or c
Slide 52: State Law Example
State Law Example Prohibition Against Jury Trial Waivers “Any provision in a contract requiring a party to the contract to waiver his right to a jury trial is unconscionable as a matter of law and the provision shall be unenforceable…” N.C. Gen. Stat. § 22B-10 (2018)
Slide 53: Remember
Remember 1 Rights and privileges What rights and privileges do you lose by agreeing to the terms of this provision/contract? 2 Liability What is your exposure to liability? 3 Discussion points Identify discussion points for your contract negotiations to manage and mitigate your exposure. 4 Advice of
Slide 54: QUESTIONS?
Thank you for your time! QUESTIONS? This concludes The American Institute of Architects Continuing Education Systems Program Jennifer Walton, Operations Representative Jennifer.Walton@rlicorp.com Mika Dewitz-Cryan, Client Solutions Manager Mika.Dewitz-Cryan@rlicorp.com