The RIBA’s latest conditions of appointment aren’t perfect, but they’ve swept away many of the onerous obligations in the 2007 edition
In 2007, the RIBA published new standard conditions of appointment. These caused considerable concern. In June this year, the RIBA produced a new set. With some reservations, they are a significant improvement.
Under the new standard conditions of appointment, the basic obligation on the architect is again a straightforward duty to exercise reasonable skill, care and diligence in accordance with the normal standards of the architect’s profession. Gone are the onerous further obligations. There is no longer a contractual obligation to comply with the client’s brief, to perform the services in accordance with project procedures, to provide “adequate” resources or to maintain “effective” review procedures.
This does not mean that the architect does not have to do any of these things. The question, though, will always be: has the architect exercised the proper degree of skill and care? Any consultant exercising reasonable skill and care will obviously endeavour to comply with the client’s brief, as they understand it. To make such a matter the subject of a special obligation is unnecessary. At most, it could impose a warranty for fitness for purpose that would not be covered by the consultant’s professional indemnity insurance.
Many of the other problems with the 2007 conditions have also been addressed and corrected. There are, for example, sensibly worded duties to inform and collaborate, although one could quibble about the definition of “collaborate”.
The cap on the architect’s liability is now the amount of professional indemnity cover that the architect agrees to maintain, whether on a per-claim or aggregate basis. This does not, however, have to be the same as the amount of cover that the architect actually has: the amount should reflect the particular risks for that project and, in any event, the architect would be well advised to agree to maintain a lower amount than this so as to have something left over in the event of other parties having claims arising out of the same incident. The limitation does not refer specifically to actions in negligence and, as a result, such claims may not be limited. There is still a net contribution clause but the list of people whose responsibility is to be considered with the architect’s has been reduced, which could mean the architect is not protected in the case of the insolvency of some members of the project team.
These conditions restore the general right to both parties (not just the client) to terminate by giving reasonable notice, stating the reasons for doing so. They also include a right to suspend and then terminate, on reasonable notice, if breaches of obligations are not put right. The problem under the 2007 conditions of how long the architect has to wait for matters to be put right before being able to terminate has not been resolved in these new conditions, however.
The possibility of the architect being required to give warranties or third-party rights or to agree to a novation is addressed, and the Construction Industry Council (CIC) collateral warranty and the CIC novation agreement are listed in the schedules, but other forms can apply. It appears to be anticipated that the architect will give collateral warranties or third-party rights to all funders, purchasers and first tenants as they are not defined. This could be dangerous as architects may want to limit the number of collateral warranties or third-party rights they give, not least because otherwise these could take them outside their professional indemnity insurance.
The most controversial aspect of the conditions could well be the exclusion of all rights of set-off, coupled with restrictions on what payments the client can withhold. The Construction Act in effect excludes rights of set-off where the payer has failed to serve a notice of withholding payment.
However, these conditions attempt to go further and state that the client cannot withhold any amount due to the architect unless the sum has been agreed with the architect, or a tribunal has decided the amount is not due.
What about amounts that may be “due” but that the client wishes to withhold on the ground that the architect has performed negligently? A court may well interpret this clause liberally, from the client’s point of view.
It is fitting to finish on a celebratory note. The RIBA has returned to the language of obligation and entitlement, abandoning the “normative” style (with everything in the present tense) that was one of the worst aspects of the 2007 conditions. This makes the conditions read more naturally.
Rachel Barnes is a partner in Beale & Co