Sorry, its not a runner

The shrill response to the launch of the British Property Federation’s consultancy agreement in 2005 predisposed those of us who were involved with it to indulge in a bit of tit-for-tat when the Construction Industry Council’s consultants’ contract was finally unveiled. But fairness and objectivity demand a more intelligent response. The draft Consultants’ Contract does do many things “rather well”, as John Hughes-D’Aeth says (30 June).

In some ways, the draft contract is more ambitious than the BPF agreement: it attempts to pick up Scots law requirements and to cover a broader range of payment options in addition to a lump sum.

In other ways, the detailed drafting of the consultants’ contract is less attractive:

The opportunity to produce a consultancy agreement through the JCT with broad support across the industry was lost

• John suggests that consultants are under robust obligations to comply with the brief and the programme. I do not believe an obligation to have “due regard” can be regarded as being robust.
• There seems to be no obligation to comply with statutory requirements.
• The client is required to warrant the accuracy of specialist reports and surveys provided by the consultant, but how can they know whether they really are accurate?
• While, as John says, the grounds for additional fees may have to be notified promptly, they are nevertheless wide – for instance, if the services are “materially delayed or disrupted by any cause beyond the consultant’s control”.
• There is no obligation to use named personnel on the project, other than the “consultant’s representative”, who is presumably the partner in charge.
• Hidden away in the definition is a requirement that any party to receive third-party rights must have a “substantial interest in the project”, whatever that is.
• And the third-party rights exclude any liability for costs other than the cost of repair which, as John knows, is not generally accepted by purchasers and tenants on large construction projects – which is what this contract is intended for.

But the main issue is the cap on liability. John says only “a few” clients may reject this out of hand and the reality is that the caps on liability are becoming increasingly common. But an aggregate cap on the consultant’s liability across the entire project, however many different negligent mistakes the consultant makes? Not in my experience … Most clients will want to cross this out, otherwise, they will pick up the difference between the cap and the actual losses.

It is notable that, before publishing its own form, the BPF tried hard to reach some sort of consensus: first within the JCT and then by separate consultation with the professional bodies. It conceded, as optional clauses, net contribution clauses (which the CIC contract does not include) and caps on liability, but even with these included, the consultant lobby was not able to accept a compromise. Because of this position, the opportunity to produce a consultancy agreement through the JCT with broad support across the industry was lost. Had the attitude which seems to have prevailed in discussions on this draft contract existed, then we would have an agreed JCT Consultants’ Contract, albeit with optional clauses on limitations of liability.

John asks will the contract “put lawyers out of business?”. The answer to that is “no”. There are four forms around, with two more on the way …