William Thomas, GOT LLC © 2023
Navigating State Licensing Board Investigations: The Need for a Lawyer and Risks for Architects and Engineers
In 1979 and again in 1981, two catastrophic building failures occurred in Kansas City, Missouri, the Kemper Arena collapse and the Hyatt Regency walkway failures. These events forever shaped the way design professionals practice in this state, and brought much needed attention to design and construction practices. (I will explore these projects in a more detailed future article.) Of significant import, the Hyatt disaster led to imposition of discipline against the licenses of the design professionals involved, and resulted in a massive overhaul of the Missouri rules and regulations related to the design professions. The Board for the design professions takes a very proactive and aggressive approach to investigating and resolving complaints made against Missouri licensees.
Architects and engineers are typically seen as the locus of all responsibility in the construction process. Their expertise, creativity, and technical skills are essential in creating the technical designs for projects and structures. While they have contractual obligations and legal responsibility under the common law, as “licensed professionals,” they are also subject to heightened scrutiny by state licensing boards, which have the power to investigate complaints and take disciplinary actions. Since the stakes are so high, when facing investigation by state licensing boards, it is highly recommended design professionals retain a skilled lawyer to help them navigate that process.
The Need for a Lawyer
When facing an investigation by a state licensing board, it is crucial for design professionals to seek legal representation from a lawyer with experience in licensing board matters who can provide invaluable assistance in several ways:
- Knowledge of Licensing Board Procedures: Licensing boards have their own unique rules, regulations, and procedures that govern their investigations and disciplinary actions. An experienced lawyer will have an in-depth understanding of these processes and can help design professionals navigate them effectively. This typically includes an investigative process, an interview by the state board, and possibly litigation before the Administrative Hearing Commission.
- Strategic Advice: A lawyer can assess the allegations against a design professional and develop a strategic plan to address the concerns raised by the licensing board. This may involve gathering additional evidence, obtaining outside consulting expert opinions, or preparing supportive documents or persuasive arguments to demonstrate that the architect or engineer acted competently and ethically. It cannot be emphasized enough that preparation at every step in the process is critical to achieve the best outcome. The design professional cannot just turn over documents and believe the board will be satisfied. Together with their counsel, the design professional should themselves investigate the allegations, review their file and prepare a comprehensive narrative that sets out the timeline of events and demonstrates their compliance with the law.
- Representation at Formal Hearings: In some cases, a licensing board may hold a pre-complaint hearing to determine whether disciplinary action is warranted. Typically, these are “on the record,” and a transcript is made of the proceedings. The purpose is to use any testimony given in a subsequently filed action, if necessary. A lawyer can and should represent the design professional at this formal hearing, presenting their case and advocating on their behalf. Key to this step is appropriate preparation and anticipation of the issues that will come up.
- Negotiating Settlements: Not all complaints lead to the initiation of a formal action against the design professional. In fact, in most instances, the board will want to negotiate a settlement. A lawyer with experience before the board can assist in negotiating a favorable settlement, resolving the matter without the need for a formal hearing. This can save time, reduce stress, and minimize the impact on the design professional’s reputation and career.
- Complaint Proceedings and Appealing Decisions: If a licensing board decides to seek discipline, they must file a complaint, like a lawsuit, before the Administrative Hearing Commission. Before the board can impose disciplinary action, they must obtain a ruling from the Commission, though a single commissioner, or judge, that there was cause to discipline the licensee. An experienced trial lawyer can assist with this process, and, if necessary, appealing the decision, seeking to have it overturned or the penalties reduced.
Risks Faced by Architects and Engineers
Design professionals facing investigation by state licensing boards face several risks, which can have significant consequences for their careers and reputations:
- Loss or Suspension of License: In the most severe cases, a licensing board may revoke a design professional’s license, effectively ending their career in that state, and every other state they are licensed. Even if the license is only suspended temporarily, this can have a serious impact on the architect‘s or engineer‘s ability to practice and earn a living. Understanding the trends and consequences of specific alleged offenses will help in the resolution of these investigations.
- Financial Penalties: Licensing boards can impose substantial fines on design professionals found to have violated regulations or acted unethically. These penalties can be particularly burdensome for small firms or sole practitioners. The expense of the investigation and defense of the subsequent action are also necessary, but costly.
- Reputational Damage: An investigation by a licensing board, even if it does not result in disciplinary action, can harm a design professional’s reputation. Clients, colleagues, and potential employers may view the investigation as an indication of poor performance or ethical concerns. Also, the outcomes of any trial or settlement become public record, and so, it is important to consult with a lawyer who can strenuously work to keep the outcome private, through a letter of concern versus public discipline.
- Involve Your Insurance Carrier: Professional liability insurance providers may increase premiums for architects and engineers who have faced licensing board investigations or disciplinary actions. This can result in higher costs for design professionals and their firms. However, when the designer gets their initial notice from the state board, it is imperative they give immediate notice of the action to their professional liability insurer. It is critical that the design professional notify their carrier, as they may have a sub-limit which covers the expense of counsel, but significantly to make sure that proper notice is given so there is no later denial of coverage if the investigation escalates to a complaint hearing.
- Emotional Distress: The stress and uncertainty of facing an investigation by a licensing board can take a significant emotional toll on design professionals, impacting their mental health and overall well-being. Having a trusted advisor assist you with the process will help lower the emotional toll.
Five Takeaways for Design Professionals and How We Can Help
- Be Proactive in Managing Risk: Design professionals should take steps to minimize the risk of licensing board investigations by staying current on industry regulations, attending continuing education courses, and implementing best practices for project management and documentation. We can help by addressing issues up front and answering questions about the specific statutory and regulatory scheme in your state.
- Respond Promptly to Licensing Board Inquiries: If a design professional receives notice of an investigation, it is essential to respond promptly and cooperate with the licensing board’s requests for information. Even more important, is getting a lawyer involved, and notifying any professional liability insurers.
- Seek Legal Representation Early: As soon as a design professional becomes aware of a potential licensing board investigation, they should consult with a lawyer experienced in this area. Early legal representation can help ensure that the design professional is well-prepared to address the licensing board’s concerns and minimize the risk of adverse outcomes.
- Be Transparent and Honest: During a licensing board investigation, it is crucial for design professionals to be transparent and honest in their communications with the board and their legal counsel. Attempts to conceal information or mislead the licensing board can result in more severe consequences and damage the design professional’s credibility.
- Learn from the Experience: Regardless of the outcome of a licensing board investigation, design professionals should view the experience as an opportunity to learn and improve their practices. By reflecting on the circumstances that led to the investigation, design professionals can identify areas for improvement and implement changes to reduce the likelihood of future issues.
Facing an investigation by a state licensing board can be a daunting and stressful experience for design professionals. However, by understanding the need for a lawyer, the risks involved, and the key takeaways for design professionals, they can be better prepared to navigate these challenges and protect their reputations and careers. Early legal representation, proactive risk management, and a commitment to ongoing learning and improvement are essential for design professionals who want to minimize the potential impacts of a board investigation.
Article written by Co-Founder & Principal Attorney Bill Thomas | Gausnell, O’Keefe & Thomas, LLC