This month Building relaunches Legal aid, its free advice service with a brand new panel of top construction lawyers.

Left to right: Rudi Klein, Ann Minogue, Julian Holloway, Rachel Barnes, Andrew Helmsley
Left to right: Rudi Klein, Ann Minogue, Julian Holloway, Rachel Barnes, Andrew Helmsley

The client

I have obtained planning permission to build an extension on the basis of drawings that an architect did for free on the assumption he would be employed to build the extension, but I now want to use someone else. Since it is my permission, can I just implement it?

The architect who produced the initial drawings owns the copyright in them. If the architect has prepared the drawings and charged no fee in the expectation of future work, it is highly unlikely that the law will imply any copyright licence. Accordingly, although you may have a planning permission, you cannot implement it without securing a copyright licence from your architect, since you would otherwise need to copy his drawings to construct the building for which planning has been obtained and that would infringe his copyright in them. That means going back to him and asking for a copyright licence. He will presumably, in turn, ask for a fee for the work that he has done. You will have to negotiate the fee with him and reach agreement - in truth, he does seem to have you over a barrel.

It would have been much better to document a simple agreement up front: you paid him a fee, but in exchange you receive a copyright licence in respect of the work he had done. You can then proceed to implement the planning pemission with him or without him without any risk of an infringement claim against you.

The subcontractor

I completed my work more than two years ago and am still waiting for my retention.

The main contractor told me there has been a problem with the quality of work carried out by another subcontractor. There is no problem with my work. What can I do to get my retention back?

There are no complaints about the work and, presumably, the defects liability period in the subcontract has long expired. The problems in respect of the other unrelated work could go on forever, leaving you without your cash forever.

In all probability, your payer's justification for not allowing recovery of your retention is based on subcontract provisions that enable him to hang on to the cash. This could be, for example, that a final certificate under the main contract has not been issued or that he has not received the final part of his retention.

Such provisions could fall foul of the Construction Act (assuming your contract falls within the scope of the act). Section 110 requires that every contract should have an "adequate mechanism" for "determining [when] payments become due". If your retentions depend on the issue of some certificate under another contract, you are unlikely to have any idea when such a certificate will be issued. Therefore, your contract will not contain an adequate mechanism.

You can, then, import the relevant requirements of the Scheme for Construction Contracts into your contract. Paragraph 7 in Part II of the Schedule to the Scheme says payments (other than interim payments or payment of the contract price where the work is less than 45 days) become due on the expiry of seven days following completion or on the making of a claim by the payee, whichever is later.

You appeared to have requested the money and therefore it is now outstanding together with interest under the Commercial Debts (Interest) Act 1998. If recovery of retention is dependent on the payer receiving the relevant cash, this will fall foul of the act. You can agree alternative payment arrangements but you should rely on the abovementioned provisions of the Scheme.

You could take your dispute to adjudication. There is a booklet, Getting your Retentions Back Using the Construction Act, available from HVCA Publications. Alternatively, you can claim your money through the small claims procedure if the amount is less than £5000. You can issue court proceedings online at the court service website where you also can find out about its money claim online service.

The QS

The new JCT 2005 contracts look quite different. Should I use them, or stick with the 1998 ones?

The new suite of JCT contracts (known as JCT 05) was issued in July 2005 and is a tidy-up of the JCT 98 suite with some big changes but a similar allocation of risk. The existing documents have been rationalised and, where possible, standardised across the entire range of contracts.

The biggest apparent change is the re-allocation of the clauses into nine sections. This involves renumbering all the clauses and grouping them into common themes. The layout is more logical so old clauses should be easy to find.

Examples of the changes include:

  • The removal of the nominated subcontractor provisions in the with quantities contracts
  • The removal of the arbitration provisions
  • More clarity in the design-and-build version on design responsibilities as between the architect and the contractor
  • The closing of the payment trap in the design-and-build form (under which the contractor could adjudicate and get paid what it had claimed if the employer failed to say no to a payment application)
  • Changes to what constitutes a reason for extending the contract period.
On balance JCT 05 is JCT 98 but in a cleaner and leaner format. The changes have been made for practical reasons and the use of JCT 05 is encouraged. Users of the contracts will have to familiarise themselves with the changes and their implications, some of which are quite subtle.

Finally, because JCT 05 contains some fixes to problems in JCT 98, it could well be that not using JCT 05 could call into question whether professional judgment had been applied.

The consultant

We have prepared a structural design for the developer of a block of flats and been paid for that work. The developer is proposing to sell on his interest to another developer who will carry out the development. We knew about this arrangement when we prepared our structural design. The new developer is not looking for a collateral warranty from us, but we are concerned that we could become liable to the new developer even though we are not employed by him. The terms of our appointment were under the ACE conditions.

I would expect the second developer, on acquiring your client's interest, to want to take an assignment from your client of the benefit of your appointment. Under the ACE conditions, your consent to this cannot be unreasonably withheld. If your consent is sought, it may be worth considering whether you have reasonable grounds to withhold consent. My provisional view is that this would be unlikely.

If there is a valid assignment, in principle you would be in no worse position than you are at present. You could be sued by the new developer instead of by your client, but the new developer would have no better right of action against you than your client would have had. The claim would be subject to the terms of your contract, including any limitations of liability, and the period of limitation would be the same as if there had been no assignment.

If the developer does not seek an assignment now, it may be able do so at a later date. Alternatively, your client may be able to pursue a claim against you for any breach of contract that has already occurred (although not yet known about), which it could do for the benefit of the new developer. Both of these scenarios depend on your client being willing to co-operate with the new developer after it has sold its interest. If it does not, you may have done well. However, in circumstances where you knew of the proposed arrangement, the second developer may be able to bring a claim against you in tort.

The contractor

We have retained an architect to prepare plans to obtain planning permission and then to develop design for the building works. The architect gave us a timetable but he missed all the dates. We have no formal contract, just an exchange of letters. What can we do?

Contracts need not be in writing to exist and it is common practice for substantial work to be carried out in the absence of any signed formal agreement. This leaves the law to imply the necessary contractual terms where the exchange of correspondence fails to adequately set out the relevant obligations.

Preparing plans and developing the design inevitably requires the architect to supply drawings, information and instructions. The implied obligation here is that this must be done within a reasonable time, having regard to all the circumstances. The difficulty is clarifying what exactly constitutes "reasonable time" for this purpose, but the circumstances of the situation should be assessed with the following in mind:

  • actual progress made with the programme
  • the stipulated contract period or intermediate dates
  • any need for your reasonable advance knowledge of the work for pre-planning purposes
  • whether the information relates to a variation
  • any agreed/indicated programmes showing the intended order of working or dates of completion of parts of the work
  • any requests made to the architect indicating the need for the information requested.
If it can be proved that the architect has unreasonably delayed, you may be able to terminate the contract. However, recent case law suggests that, before you do so, the architect must be given reasonable notice that time has become of the essence. You may be able to prove that you have suffered loss as a direct result of the delay. If so, you can claim for any damages.

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