The British Property Federation has produced one short, simple and fair consultancy agreement for every profession. What do you think its reception will be?
At last, someone has produced a consultancy agreement that applies the same terms to each member of the team. So, a round of applause for the British Property Federation which commissioned the work in conjunction with the Construction Confederation. Here is a list of the main benefits it will provide:
- Instead of a form for the architect produced by the RIBA, a form for the structural engineer produced by the Association of Consulting Engineers and a form for the quantity surveyor from the RICS, there is a single consultancy agreement which applies the same terms to each consultant, albeit with optional clauses to deal with their different roles.
- The agreement has a co-ordinated list of services. So, instead of gaps and inconsistencies in the explanation of services that each team member will provide, there are lists of services (drafted by Owen Fox at Brewer Consulting) showing how each member relates to the others.
- The agreement provides for different procurement routes. So, instead of lists of services that contemplate only traditional contracting, the new agreement can be used for novated design-and-build.
- The agreement is produced by clients of the industry. So instead of agreements with standard terms designed to transfer the risk of consultants’ default to the client, the new agreement has no net contribution clauses, caps or limits on liability, or exclusions of responsibility for particular services.
- Instead of agreements that ignore the interests of funders, purchasers and tenants and require extensive amendment to accommodate them, the form provides for funders’ requirements in respect of the assignment for rights in favour of third parties and fully reflects the needs of a developer client without the additional amendment.
- The agreement provides for a lump-sum fee with a clear list of circumstances in which it adjusts. So, instead of the consultant having an entitlement to adjustment of the fee for any reasons “beyond the consultant’s control”, the consultant is entitled to extra fees for defined “additional services” only, for example, where there are client changes, an insured event occurs, or the the building contractor is liquidated.
- We also have a consultancy agreement that innovates. Instead of collateral warranties, it provides for the first time in the UK for third-party rights to be used in their place. In my experience, third-party rights are now accepted on most big projects, with only the diehards clinging to the comfort blanket of collateral warranties.
The BPF has also updated its forms of collateral warranty to reflect prevailing market practice.
The consultancy agreement adopts the same style and approach as JCT’s Major Project Form 2003 – it is simple, short and easy to read. The agreement also contains the form of novation agreement missing from JCT MPF because of the JCT’s failure to agree the terms.
It is to be hoped the BPF form introduces some consistency to the present chaos in which every firm of solicitors has its own standard form of consultancy agreement – some of incredible length and complexity – with which consultants are daily bombarded.
It is to be hoped the professional institutions are prepared to look pragmatically at this attempt at standardisation
Although the response of the professional institutions to the BPF’s initiative is utterly predictable, it is to be hoped that their members are prepared to look more pragmatically at this attempt to introduce some sort of standardisation to the industry.
Likewise for clients’ lawyers. Although the odd amendment might be necessary for a particular project, the BPF and the Construction Confederation will not have achieved their aims if the 11-page consultancy agreement is accompanied by 20 pages of amendments …
Ann Minogue is a partner in Linklaters and helped draft the terms and conditions in the BPF consultancy agreement