Take your partners

Partnering is when organisations come together through strategic and informed cooperation. They may use contractual relationships, workshops or facilitating sessions to achieve common goals.

Partnering has been around for centuries in one guise or another, and is seen as a way to cut costs, improve quality and reduce adversarial relationships. Construction is in the vanguard for many of these changes.

Partnering relies on forming a cooperative management team including key players from all organisations involved in a project. It does not replace or change the underlying contracts, but provides a cooperative environment for executing contractual responsibilities. It therefore requires a commitment from all those involved to cooperate creatively and avoid confrontation.

Partnering encourages team building and develops a sense of "us" rather than "us versus them". It helps to create "win-win" situations by identifying and solving problems early on in a project. This is especially true if a partnering agreement is in place.

Such an agreement requires any disputes to be dealt with by senior management before resorting to a dispute resolution procedure. A partnering facilitator might be introduced to assist with disputes and resolve problems.

Partnering agreements may be binding, non-binding or binding only in part, for example in respect of confidentiality and dispute resolution provisions.

The drawbacks with partnering

Under a traditional construction contract the roles of the parties may be unclear, leading to wars of the borders. The designer, contractor, and ultimately the owner, end up working against each other. This leads to conflict, higher costs, delays, remedial works and (eventually) litigation/arbitration. Partnering agreements can help to reduce these risks and support long-term, successful commercial relationships.

As the oil industry has shown, partnering can fail. As partnering is carried out in a "no blame" culture, though, recrimination is pointless. There is no point in seeking to recover costs, which are wasted unless they can be recovered through the underlying project contract.

Partnering does not alter the rights, obligations and duties of the parties encapsulated in the underlying project contracts. These are determined in the usual way. This means that none of the parties' rights are prejudiced if a partnering arrangement breaks down.

However, the courts may be influenced by the behaviour of the parties if one of them caused the breakdown. If, for example, it failed to act in a spirit of mutual trust as required by the partnering agreement (see Birse versus St David, below). They may seek to find a remedy for the innocent party.

In the main, however, partnering seems to have been successful in the UK. It is also reported that 90% of all single project partnering in the USA has been successful.

How do the courts approach partnering?

A handful of key principles have emerged from the small number of court decisions to date. Where a partnering charter exists without a formal contract in place, the courts do not allow one party to capitalise on the lack of a formal written contract in order to escape liability. This was the case in Birse Construction versus St David (1999).

Conversely, where there is a formal, written partnering agreement, it is not given undue weight. The courts do not assume from the contract that the parties owe a fundamental obligation of trust and confidence to each other – as demonstrated in Bedfordshire County Council versus Fitzpatrick Contracts (1998).

The potential benefits of partnering outweigh the disadvantages and it promotes a happier approach to work.

Furthermore, if problems can be identified and resolved early on, without the need to resort to frayed tempers and high legal costs, projects will be conducted with greater efficiency. This inevitably boosts profit margins – which can only be good news.