Some clever people have come up with easy-to-use framework contracts that just might cut disputes. So where will our household clothing budget come from?
How is your hosepipe doing? Mine springs leaks. No sooner do I repair it, the water squirts out somewhere else. Reminds me of all our efforts to stop disputes. Plug the gap here or there and the leak appears elsewhere. So, I have stopped trying to repair the hose. It let it leak over my garden. I feel better. Same with the disputes: they are normal, to be expected. True, you could do without them, but your grandchildren will be granddads before we fathom how to stop them.
There is a brand spanking new set of building contract documents, and they make me feel better, too. They start on a frank and truthful theme: 鈥淲hilst there is convincing evidence that best value and partnering severely reduces disputes it would be foolish to conclude that they will be eliminated entirely鈥. In other words: of course the hose will leak. It gets better. 鈥淣otwithstanding the application of best value and partnering, the authority and contractor should enter into a formal contract.鈥 Gets better still. 鈥淚t is not considered appropriate to employ a form of contract which is complex 鈥︹ Love it. And then it says, in essence: 鈥淲e have invented a suite of documents which sets out only the basic rights and obligations of the parties, making it clear which party carries the essential matters of risk.鈥 So who is this grown-up outfit that is talking masses of good sense? Oh it鈥檚 that stuffy lot that we call 鈥渓ocal authorities鈥. They call themselves 鈥渢he public sector鈥. They spend billions with builders each year.
The new documents are called 鈥淧erform21鈥. What鈥檚 that? It stands for 鈥淧erformance in the 21st century鈥. It鈥檚 all about procurement of construction by local government in the light of the refreshing idea buying for best value, rather than lowest price. The authorities turned for help to two experienced dispute gurus, Roger Knowles and Mike Wills of Knowles Management, and asked them to come up with a framework.
And, that鈥檚 what we have. In fact, it鈥檚 rather more than a framework. It is a real endeavour to produce a document that can be easily understood by builders, plasterers, and the odd surveyor or two. And do you know, when I read it, I sensed that you might like it. It comes over as friendly. The idea is to lay out, briefly, what is to be done by the parties. The extension of time rules take just one-third of a page. Honest. That is a tad shorter than most of the current contract forms that keep Mrs Bingham in summer frocks. The adjudication rules take four lines!
Perform21 is actually a set of skinny standard form contract documents. For example, the everyday contract 鈥淧lease build my new school鈥 covers 10 pages of contractual bumf. The everyday contract 鈥淧lease design and build my new school鈥 is 10 pages of contractual bumf. The everyday contract 鈥淧lease be my subcontractor under this main contract鈥 is 10 pages of 鈥 oh, you get the idea. The suite goes on; there is a skinny document for term contracts, another for target cost reimbursable contracts, another for professional services contract. There is even a four-pager called a 鈥減re-start agreement鈥.
That鈥檚 innovative: there are lots of disputes about work done in honeymoon happy time 鈥 as soon as the happy couple get to know each other a little better, of courese.
Naturally, the lawyers will fret about the want of a document 10 times bigger; they will fret about this or that clause being capable of differing interpretations. But I looked at the life-blood clauses in the forms: getting paid. The rules are ever so easy to understand. The contractor may issue a detailed request for payment. The contract administrator will gawp at it, make his own valuation of work done and materials on site, then issue a certificate. Then the authority will do what the certificate tells it to 鈥 unless he issues a withholding notice. Yes, there are some 鈥渨hat if鈥檚鈥 not dealt with. But the gaps are filled when vital, by commonsense implied terms. This is not difficult. Adjudicators will understand all this.
Ah, I nearly forgot, there is also a 鈥減artnering agreement鈥 to include a 鈥減artnering charter鈥. But that page was blank. It explains: 鈥淭he Partnering Charter is completed by the project team and the partners will select from their ranks the 鈥榗ore group鈥 who drive the project like a 鈥榲irtual government鈥 with shared aims and objectives.鈥
And with that my hosepipe sprung another leak. Another frock, darling?
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper 黑洞社区s, Temple, London EC4 7EY, or email him on info@tonybingham.co.uk.
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