Do clients really want another measure to regulate payment? Judging by the slow take-up so far, possibly not …
The premise of the guide is that its principles can create savings for the public sector. So you would think that clients would have been quick to adopt it in the six months since it was published in July 2007. However, anecdotal evidence suggests that the rate of take-up is slow.
To some extent, this can be put down to a lack of awareness of its existence, but it still raises the question of the extent to which clients are enthused by the prospect of another measure to regulate payment.
Moreover, there is the fact that the charter is not intended to be legally binding. As a client once put it, “there’s not much point in something that can’t be backed up by a lawsuit or a shotgun”. Certainly, there is not a good track record of such voluntary arrangements being adopted in our industry.
There will be certain schemes where the use of a project bank account merits consideration. If that is the case, the construction contract will need to address the use of such an account and give it binding effect. Already, the publishers of the NEC and PPC2000 contracts have announced revisions that will deal with this and the JCT is reviewing its position.
In all cases, the publishers indicate that the project bank account will be a bolt-on facility rather than an integral part of the contract, which suggests that they may be left gathering dust on the shelf, rather than being used as a matter of course.
Clients may find it difficult to accept that, once money is paid by them into a project bank account, they cease to have any further rights to it (as is proposed by the sample trust deed that accompanies the guide).
Michael Conroy-Harris is a partner at Eversheds