I should confess to a certain bias: I was on the taskforce responsible for drafting the documents. Nevertheless, I think it fair to claim that they provide sound, practical standards for the industry.
Let me start with the warranties. They are unashamedly similar to the current British Property Federation's purchaser/tenant and financier forms of warranties (the CoWa/P&T and the CoWa/F), last published in 1993 and 1992 respectively. This is deliberate. It means that the warranties take a form that is familiar to the industry. The balance of risk between consultant and beneficiary is known.
However, these contracts are more clearly drafted than the BPF forms, and they take account of changes in law and practice since the BPF warranties were published. I am thinking, for example, of the decision in Co-operative Retail Services Limited and Others vs Taylor Young Partnership and Others 2002.
That significant case was well covered by articles in this section at the time of the decision. To briefly summarise, it found that, in defending an action, a consultant could not claim a contribution from a jointly culpable contractor in circumstances where the client and contractor were jointly insured. Through a revised net contribution clause, the CIC warranties protect the consultant from liability for any additional sums for which a court might otherwise find it liable, where it cannot share liability with the client's co-insured.
It is worth noting that the warranties have the backing of the CIC membership, which includes representatives of all professional bodies.
Back in March 2000, I aired my grievances in these pages over the quality of some novation agreements
The novation agreement, if published in its current draft form, as is expected, will be a breath of fresh air. Back in March 2000, I aired my grievances in these pages over the quality of some of the novation agreements that are presented to our insureds. The most common purpose of a novation agreement is to put a design-and-build contractor into the shoes of the original developer client, so that the contractor becomes the replacement client of the consultant. But so often the novation agreement literally substitutes the word "contractor" for the "client", apparently with no regard to whether it will then make sense. Hence, we are treated to clauses such as "examine any tenders submitted by contractors and advise the contractor on the relative merits of the same", or "assist in settling any dispute that may arise between the contractor and the contractor".
Mercifully, the CIC novation agreement guides the parties to address the issue of the novated services at novation stage and to append as schedules to the agreement any variations to the consultant's and to the contractor's obligations.
The contract deals even-handedly with the parties. It expressly releases the employer client and the consultant from their original obligations and liabilities to one another, rather than effecting a unilateral release of the client alone, an unfair arrangement so frequently encountered (even, strangely enough, in the sample novation agreement in the Guide to RIBA Forms of Appointment 1999).
The CIC novation agreement also prevents a consultant escaping liability to the contractor simply because the employer client has suffered no similar loss (something that has become an issue since the case of Blyth & Blyth vs Carillion in 2001).
All the documents will be published with guidance to assist with their completion and to explain the reasoning behind certain clauses where that may not be immediately obvious to those newer to the game.
Postscript
Melinda Parisotti is an in-house barrister at Wren Managers, which manages a professional indemnity mutual for architects.
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