Some clever people have come up with easy-to-use framework contracts that just might cut disputes. So where will our household clothing budget come from?
How is your hosepipe doing? Mine springs leaks. No sooner do I repair it, the water squirts out somewhere else. Reminds me of all our efforts to stop disputes. Plug the gap here or there and the leak appears elsewhere. So, I have stopped trying to repair the hose. It let it leak over my garden. I feel better. Same with the disputes: they are normal, to be expected. True, you could do without them, but your grandchildren will be granddads before we fathom how to stop them.
There is a brand spanking new set of building contract documents, and they make me feel better, too. They start on a frank and truthful theme: “Whilst there is convincing evidence that best value and partnering severely reduces disputes it would be foolish to conclude that they will be eliminated entirely”. In other words: of course the hose will leak. It gets better. “Notwithstanding the application of best value and partnering, the authority and contractor should enter into a formal contract.” Gets better still. “It is not considered appropriate to employ a form of contract which is complex …” Love it. And then it says, in essence: “We have invented a suite of documents which sets out only the basic rights and obligations of the parties, making it clear which party carries the essential matters of risk.” So who is this grown-up outfit that is talking masses of good sense? Oh it’s that stuffy lot that we call “local authorities”. They call themselves “the public sector”. They spend billions with builders each year.
The new documents are called “Perform21”. What’s that? It stands for “Performance in the 21st century”. It’s all about procurement of construction by local government in the light of the refreshing idea buying for best value, rather than lowest price. The authorities turned for help to two experienced dispute gurus, Roger Knowles and Mike Wills of Knowles Management, and asked them to come up with a framework.
And, that’s what we have. In fact, it’s rather more than a framework. It is a real endeavour to produce a document that can be easily understood by builders, plasterers, and the odd surveyor or two. And do you know, when I read it, I sensed that you might like it. It comes over as friendly. The idea is to lay out, briefly, what is to be done by the parties. The extension of time rules take just one-third of a page. Honest. That is a tad shorter than most of the current contract forms that keep Mrs Bingham in summer frocks. The adjudication rules take four lines!
Perform21 is actually a set of skinny standard form contract documents. For example, the everyday contract “Please build my new school” covers 10 pages of contractual bumf. The everyday contract “Please design and build my new school” is 10 pages of contractual bumf. The everyday contract “Please be my subcontractor under this main contract” is 10 pages of … oh, you get the idea. The suite goes on; there is a skinny document for term contracts, another for target cost reimbursable contracts, another for professional services contract. There is even a four-pager called a “pre-start agreement”.
That’s innovative: there are lots of disputes about work done in honeymoon happy time … as soon as the happy couple get to know each other a little better, of courese.
Naturally, the lawyers will fret about the want of a document 10 times bigger; they will fret about this or that clause being capable of differing interpretations. But I looked at the life-blood clauses in the forms: getting paid. The rules are ever so easy to understand. The contractor may issue a detailed request for payment. The contract administrator will gawp at it, make his own valuation of work done and materials on site, then issue a certificate. Then the authority will do what the certificate tells it to – unless he issues a withholding notice. Yes, there are some “what if’s” not dealt with. But the gaps are filled when vital, by commonsense implied terms. This is not difficult. Adjudicators will understand all this.
Ah, I nearly forgot, there is also a “partnering agreement” to include a “partnering charter”. But that page was blank. It explains: “The Partnering Charter is completed by the project team and the partners will select from their ranks the ‘core group’ who drive the project like a ‘virtual government’ with shared aims and objectives.”
And with that my hosepipe sprung another leak. Another frock, darling?
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or email him on email@example.com.