Architects are important within the construction business. Often, they do a fine and important job. However, the new architects’ standard contract, called SFA/99, does no credit to the profession.
The standard form is divided between articles of agreement, schedules and conditions of engagement. The list of services that are not to be provided apparently exceeds the list of those that are within the agreed fee. The length of the list of obligations for the client exceeds the list of obligations of the architect by more than 50%. The largest clause (clause 5) is that concerned with the architect’s payment.
The architect’s potential liabilities are grossly and unnecessarily limited. Clause 7.3 seeks to impose a financial limit on the architect’s liability if sued by the client. A further serious limitation is that even if the architect is liable to the client for 100% of the client’s losses, the client’s entitlement to damages is to be reduced to reflect other parties’ contributory responsibility.
Given that a client is likely to have to sue the architect in arbitration and that there is no provision for joining any other responsible parties into arbitration proceedings, this apportionment provision is an unreasonable limitation on clients’ rights. Thus, an architect whose negligent design causes a £1m loss may have its liability reduced to reflect the fact that the contractor failed to warn the client of the negligent design, although the only real responsibility is that of the architect.
An extraordinary obligation imposed on the client is to “ensure” that other people engaged in connection with the project “when requested by the architect, consider and comment on the work of the architect in relation to their own work so that the architect may consider making any necessary change to his work”. This means the client guarantees that the architect’s work, say, of design may have to be checked by, say, the structural engineer. If the “checker” fails to pick up an obvious deficiency in the architect’s work, clause 3.11 makes that the fault of the client.
A penal rate of interest is applied (8% over base rate) for late payments and even if the client legitimately terminates the contract, the architect is paid expenses and costs
It is in the field of payment entitlements to the architect that this form of contract excels itself. Rather like the begging builder, everything seems to be an “extra”. The architect is entitled to additional fees if he is involved in any extra work or incurs any extra expense “for reasons beyond his control”. This would apply even if those “reasons” were wholly foreseeable or foreseen at the time the architect entered into the contract.
A non-exhaustive list of “reasons” is given; one of these is an entitlement to additional payment where “the nature of the project requires that substantial parts of the design cannot be completed or must be specified provisionally or approximately before construction commences”. One would have thought this should be allowed for within the agreed fee, except where the “nature of the project” has changed.
The clients may not withhold payment even if the architect has substantially failed to carry out its job properly; the only exceptions are where a judgment or award is eventually made against the architect, or in the unlikely event that the architect agrees there can be a set-off.
A wholly penal rate of interest is to be applied (8% over the Bank of England base rate) for any late payments. Finally, even if the client legitimately terminates the architect’s contract, the architect is to be paid expenses and costs incurred in consequence.
Robert Akenhead QC is a barrister specialising in construction law at Atkin Chambers and joint editor of Building Law Reports.