Every contract tells you to issue a notice when something is going wrong. But that launches warships – and makes it virtually certain that something will go wrong
Igave a talk the other night at a Chartered Institute of Building meeting. Well, it was more of a chat. The topic was how to do me out of a job.
I spend all day every day deciding disputes. Sometimes I have a little whinge, (to myself, of course), about how daft these folks were to get themselves into this almighty row, to put themselves into the hands of consultant disputomaniacs, lawyers, experts, judges, arbitrators, adjudicators, mediators and me.
So my CIOB hosts and their architect, engineer and lawyer guests wanted to know how to “avoid disputes”. My throw-away first line was to “give early-warning notices”; I said folk simply don’t send such notices. “Dear me,” says the employer’s QS during the final account row, “you can’t make a claim for loss and expense, Mr Contractor because, er, well, you failed to send a notice as demanded in the contractual bumf.” It’s a sort of gotcha argument, and it is run even though everyone knew months before that the contractor was being messed about with. So, my suggestion was to avoid a dispute by sending in those notices.
All this aggro, these basic ingredients for conflict are all about doing what the contractual bumf tells you to
Then I spotted one or two faces wrinkle, a few noses turned up, a few bottom lips drooped. It was plain that these chaps didn’t like sending “contractual” notices. Subcontractors don’t like sending them to the main contractor. “It puts the shutters up,” said one of the CIOB folk. Another explained how it could, no would, spark a dispute; another said it destroyed the working relationship.
Think about it. You write a letter even in the most pleasant language, giving notice that you are suffering loss and expense because the architect is late issuing information, or that the drawings contain a cock-up. Think, too, about the subcontractor that writes to the main contractor’s head office complaining that his lads can’t make headway, can’t lay screeds, can’t erect steelwork, can’t install widgets because the managers put on site by the main contractor can’t organise a booze-up in a brewery. Go on, write that letter as the contract says you must and see what happens. It’s called “giving notice”.
“Well,” says the QS at the tail end of the job, when everyone is ready to punch each other, “you didn’t give notice.” “And that,” adds the lawyer, “is a condition precedent.” The warship is coming out of port.
The search is on to exploit a mistake so as to run a counter-claim. A game of tit-for-tat gets under way
What does the contract say? It says that if the contractor makes written application to the architect stating he has incurred, or is likely to incur, loss and expense and does so as soon as he twigs that the architect has proved himself to be as competent as a baboon then, after a helluva row, he might get a few bob compensation.
So I asked the room what warships coming out of port meant. Reprisals, that’s what. Spite descends – one’s colleagues start becoming “the other side”, the opponent. One chap reassured me: “I never sulk when I receive a whingeing notice about loss and expense … I just make sure they regret it in the long run.”
Ah, do you see that this aggro, these basic ingredients for conflict are all about obeying what the contractual bumf says you shall, must, will do – write a notice. The warship circles. The “other side” starts looking for a mess-up, even half a mess-up by the sender of the notices. The search is on to exploit a mistake so as to run a counter-claim. A game of tit-for-tat gets under way. Duff work is listed, scheduled, complained about, as is poor progress. Then the contractor complains about the employer’s team having one head, two arms, and two legs …
The contract means well. It says please tell the other party when you think an event happens that might eventually mean money is to be shelled out. It sounds like good sense, but in real life it begins what is known as the “peace-war game”. Building a building requires co-operation, but the relationship is commercial. One side, at least, is there to make a profit. The relationship is fragile, too. It works while each party is co-operative. But if A provokes B, B will retaliate. That’s the start of the game, and the oddity is that the building contract orders A to provoke B or lose money. And eventually he does provoke B and loses more money than he could have dreamed of.
Tony Bingham is a barrister and arbitrator at 3 Paper Buildings Temple