That’s better – but not by much

Several years ago on these pages a leading construction barrister, now a High Court judge, strongly criticised the RIBA’s standard form for the appointment of an architect (SFA/99). It was, he said, unfairly weighted against the client (Robert Akenhead).

Some of the criticisms were echoed by the High Court in a 2005 case, Munkenbeck and Marshall vs Harold, which described two of the terms as “unfair and onerous”. The RIBA has recently updated the contract as the RIBA Standard Agreement 2007 S-Con-07. Is this one any better?

The RIBA has acted on the two clauses that featured in Munkenbeck. The provision that required the client to pay any legal costs incurred by an architect on an “indemnity” basis (rather than the more usual “standard” basis) has disappeared. In addition, the interest rate of 8% over bank base rates that applies to late payments is now 5% over base. But clients will have to search hard to find further concessions in their favour.

A key clause says that the architect is to perform his services in accordance with the brief, and within any time or cost constraints agreed with the client. All well and good. However, this obligation applies only “so far as reasonably practicable”. Some clients may be in for a shock when the architect shakes his head regretfully and explains that he has overshot budget because it wasn’t reasonably practicable to stay within it.

There is a similar problem with varied work. Under the 1999 form the architect was paid additional fees where he was involved in extra expense “for reasons beyond [his] control” – and some examples of such reasons were then listed. The list of examples has now been reduced, which is good news for clients. However, an architect could still argue, for example, that delays or insolvency of his sub-consultants, or even unforeseeable problems in his own office (such as the sudden illness of a key person) are beyond his control. The risk then lands on the client’s desk.

One clause that has been expanded from the 1999 version says that the client is obliged to supply, free of charge, all information in his possession (or which is reasonably obtainable) that is necessary for the proper performance of the architect’s services. The clause goes on to say that the architect is entitled to rely on this information. Most clients will want to amend this, partly so as not to be in breach for failing to obtain relevant reports, surveys or data, for example. But also because they will not wish to warrant the accuracy of such documents in any event, unless they are able to arrange the appropriate warranties from the original provider of the report, or survey.

Although the new RIBA standard form of contract does contain some adjustments in the client’s favour, these are, in the main, minor or cosmetic

What about client responsibility for other consultants, or the contractor? Two clauses are relevant here. Firstly, the client must require these people to co-operate with the architect. The clause is a slight improvement on the 1999 version (which seemed to make the client responsible for getting others to check the architect’s work), but it still allows the architect to blame the client if it provides information to some other person for comment and that person fails to make any.

Secondly, the much-hated “net contribution” clause still rears its head. This is unacceptable to most clients since it reduces the architect’s liability merely because the client could also sue someone else for its losses. It now appears to be optional, but closer examination reveals that it applies unless specifically deleted.

Other problem clauses for clients include the provision for an overall cap on liability and the exclusion of common law set-off rights. Also, the client may not get his copyright licence to use design material if any fees are outstanding.

A similar provision appears in the JCT contracts, though it is often deleted. The problem is that, if there is a disagreement about sums due, the client doesn’t know whether he has a licence or not.

Although the new form of contract contains some adjustments in the client’s favour, these adjustments are, in the main, minor or cosmetic. Of course, developers and contractors who engage architects on a repeat basis are likely to have their own bespoke forms of appointment. For others, the message must be: use it if you must, but not without substantial amendment.