Security and Liability: New Challenges for Buildings

by Noelle Lilien

A recent jury verdict handed down in New York State Supreme Court raises both the potential liability risk that building owners face from acts of terrorism and the level of attention these concerns demand in new construction projects.

Three decades ago, building owners generally had no duty to protect tenants from criminal acts committed by third parties, essentially receiving the same treatment as a private person.

Gradually, however, a body of law known as liability for negligent security evolved. Owners began to be held liable for injuries sustained by their tenants as the result of third party criminal activity on their premises if the owner knew or should have known about the possibility of a crime occurring and did not do enough to protect against it.

This past October, a New York jury pushed the bar further to include the threat of terrorism. In the case, the Port Authority of New York and New Jersey, owner of the former World Trade Center, was found primarily responsible for the 1993 truck bomb explosion that left six people dead and more than 1,000 injured. According to the Associated Press, several jurors who decided the case said that one determining factor in their verdict was the Port Authority's failure to heed a warning from one of its security consultants to close the underground garage where the bomb was detonated.

On appeal at the time of publication, the case signals a judicial trend toward greater liability for property owners. However, it still leaves many questions about an owner's liability for damage from terrorist attacks unanswered.

For instance, it has become routine - in the years since the Sept. 11, 2001 attacks that destroyed the World Trade Center - for owners of existing buildings to analyze threats and upgrade their structures to improve performance in the event of a terrorist act. Nevertheless, most owners still do not know whether they are legally required to upgrade security in their buildings or whether any changes they make will shield them from liability.

This confusion is understandable. The courts are only beginning to focus on whether and how existing legal doctrine based on negligent security should be adapted to the new terrorism environment.

Whether owners will be held liable for negligent security related to acts of terror will be based largely on whether the act was foreseeable and whether the owner met the standard of care based on the specific facts and circumstances surrounding that case. The World Trade Center bombing court case makes clear that an owner would not need to have had past experience with terrorism to be at risk of liability, and that the owner's applicable standard of care is circumscribed by what it should have foreseen, not necessarily on what it actually foresaw.

These issues are not just relevant to existing buildings, but to new construction as well. The ideal time to consider and incorporate security-related building features is in the early stages of design, when they are significantly less expensive to install and more effective than features added afterwards.

Owners of existing or planned structures can hire security consultants who analyze the risk of threat to a building, assessing factors such as the profile of tenants, actual threat levels, and the proximity to landmarks or other high-profile properties. Next, the security consultant will typically assess the building's physical characteristics and potential vulnerability to a terrorist act, reviewing elements such as set-back distance, underground garages, mailrooms, loading docks, air intake locations, and overall access to the public.

Based on these assessments, security consultants will work with the owner and engineers and/or architects to recommend operational or structural design-related changes that are appropriate to the level of threat perceived at the building - which the owner then gauges for affordability.

As a practical matter, buildings without high-profile or high-risk tenants that are not close to perceived terrorist targets will likely require limited security features and upgrades, such as enhanced lobby security procedures, revised evacuation plans, restricted public access to air-intake locations, and mechanical systems to protect building occupants.

Buildings at a higher risk, meanwhile, may consider more significant operational changes such as closing underground parking facilities or moving mailrooms and loading docks to remote locations. At the design and structural level, owners in the higher-risk category can consider strategic placement of the building and parking areas, as well as the use of bollards, planters, and gates to restrict vehicle access and reduce vehicle speed. Other more active protections include hardening or strengthening building structural supports that may be vulnerable to attack or installing glazed windows that minimize injuries in the event of a bomb blast.

Conducting risk assessments can help owners minimize liability exposure, but they will not - as was evident in the World Trade Center bombing case - minimize an owner's liability risk unless the owner follows up on the recommendations by taking reasonable steps to protect its property and its occupants.

In the end, there are no bright line rules for owners to follow to minimize risk of liability for negligent security in connection with an act of terror. Whether the risk to a given property is foreseeable - and whether the owner has satisfied its duty to protect building occupants from injuries - must be determined by carefully examining the unique characteristics of each individual property.