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Contracting Consultancy

In 1993 Sir Michael Latham recognised that ‘Teamwork reduces adversarial attitudes.[1] and he later recommended that ‘Firm duties of teamwork, with shared financial motivation[2]…’ should be incorporated into effective modern contract forms.  Contractual frameworks and mechanisms that facilitate greater teamwork and client interactions correlate with enhanced risk management and a reduction in disputes, as has been demonstrated by the  UK Government trial projects[3].  In taking up Latham’s vision the majority of UK standard form contracts include a‘…specific duty for all parties to deal fairly with each other,…in an atmosphere of mutual co-operation.[4]’ although the extent to which these provisions create binding obligations is uncertain[5].

True collaboration requires trust, which is a rare commodity in construction project delivery because of the competing commercial interests of each party, particularly when these interests may become strained as a result of unplanned events that are not adequately dealt with by the respective contract arrangements.  NCGB Consulting promote Collaborative working practices under all forms of contract arrangement to promote clarity, openness, quality assurance and effective risk management.  Open communication between contracting parties that focusses on the attainment of the best possible outcome for the client helps to establish and promote credibility and trust between the parties.

Standard form multi-party contracts are a relatively new development in construction such that in the UK there are only a few standard form multi-party contracts[6].  Traditional bi-lateral standard form contracts contain optional provisions that seek to create some multi-party functionality but these provisions complement existing bi-lateral arrangements and do not replace them.[7] Standard form multi-party contracts in other common law jurisdictions, notably the USA[8] and Australia[9] operate integrated project delivery (IPD) contracts which are comparable with collaborative multi-party contracts in the UK.

[1] M Latham ‘Trust and Money’ (HMSO, 1993) page 22
[2] M Latham ‘Constructing the Team’ (HMSO, 1994) at 5.18.2
[3] Government case studies (https://www.gov.uk/government/collections/government-construction#procurement-trial-case-studies) provide evidence of reduced time, cost and disputes
[4] (n2) at 5.18.1
[5] TSG Building Services v South Anglia Housing [2013] ECHC 1151(TCC), [2013]1 BLR 484, and more recently Costain Ltd v Tarmac Holdindgs Ltd [2017] EWHC 319 (TCC)
[6] e.g. PPC2000 Standard Form of Contract for Project Partnering (Association of Consultant Architects, London, 2013); and FAC-1 Framework Alliance Contract (Association of Consultant Architects, London, 2016);
[7] e.g. NEC3 Engineering and Construction Contract Option X12; JCT CE2011 Project Team Agreement
[8] ConsensusDocs300 Standard Multi-party Integrated Project Delivery (IPD) Agreement (ConsensusDocs, Arlington, USA, 2016)
[9] Integrated Project Team Agreement (IPTA) forming part of the Australian Department of Defence Integrated Project Delivery (IPD) model 2016