The NEC3, ACA2000, the Strategic Forum for Contruction’s Integrated Project Team (IPT) agreement and JCT Constructing Excellence (CE) forms of contract were steps towards a more positive world. The IPT agreement states:
The Partners and Cluster Partners undertake not to make any claim against each other for any loss or damage whatsoever arising out of or in connection with this Agreement,
including claims arising out of prior discussions, claims alleging negligence and claims for injunctive relief.
and the JCT CE contract states:
The Overriding Principle guiding the Purchaser and the Supplier in the operation of this Contract is that of collaboration. It is their intention to work together with each other and with all other Project Participants in a co-operative and collaborative manner in good faith and in the spirit of mutual trust and respect. To this end the Purchaser and the Supplier agree they shall each give to, and welcome from, the other, and the other Project Participants, feedback on performance and shall draw each other’s attention to any difficulties and shall share information openly, at the earliest practicable time. They shall support collaborative behaviour and address behaviour that does not comply with the Overriding Principle.
These are radically different and very powerful statements made early on in the text of the contracts. They present a valuable variation on the long tradition of adversarialism that has been extant in forms of contract hitherto. The ‘Overriding Principle’ is not a sentimental aspiration but something that has the backing of the courts in the form of Rule 1.1 of the Civil Procedure Rules supplied by the Ministry of Justice.
Guidance to the rule indicates that the ‘Overriding Principle’ takes precedence over any other clause in the contract, thereby affording it an incontrovertible superiority. If interpretation or dispute resolution is required then it will be done in the best interests of the Overriding Principle. In other words those who can demonstrate the closest adherence to the Overriding Principle win the day.
The Rules ensure:
• Cases are dealt with in a just manner.
• The parties are equal under the Overriding Principle.
• The parties should have least cost.
• Proportionality of value, importance and complexity.
Parties signing this type of agreement are making a serious commitment to working together. Both forms ask the participants to sign up to a declaration of mutual trust and support; they must co-operate as much as possible and blame as little as possible. This is something of an anathema to many project teams and design and build contractors.
However, in a legal framework such as this, BIM can blossom and the real advantages of managing information electronically can be realised. Following on from the Overriding Principle both forms include several key notions. The agreements assume the project team
will act as one. In the extreme a single company might be formed where all members are in effect stakeholders in the project. The client of course is one of the main players in this scenario and it is crucial that they are a signatory to the collaborative cause. Perhaps the client has to accept more of a position as ‘one of the team’ and less one of the piper calling the tune. After all it is the team who convert the client’s money into long term value, a symbiotic relationship.
The idea of a single entity would be reinforced by having one lawyer as part of the team.
The lawyer’s role would be to ensure fair play and interpret situations to the benefit of the team using the Overriding Principle as their scales of justice. Both forms of contract provide for a Board, part of whose role is to act as an ‘internal court’ with the intention of resolving issues before traditional litigation routes are followed. The lawyer could perhaps chair this board on appropriate occasions. The single entity idea then begs the question of single project insurance. This tends to go hand in hand with another concept common to be agreements and that is a notion of a joint responsibility for pain and gain. The idea behind the pain/gain share is to accept that things do go wrong, the unexpected happens on projects. People do make mistakes; information can be incorrect on occasions. When this occurs the predominant consequence is almost certainly financial.
A full explanation of the pain/gain share is not the focus of this book. However, a working concept might be helpful. Identifying the pain/gain share relies heavily on more open forms of project accounting as well as creating and effectively managing a risk register. Each party declares the basic labour and material cost of doing the job as a target, they also show their overhead and profit component. In addition the entire group as it evolves assesses
components of risk both for themselves and for any groupings (co-ordination by structural engineer or HVAC engineer suspended ceiling supplier, for example) that might occur. The cash consequence of the aggregate of all these risk items is the amount insured against, in other words project insurance. Ideally this leads to a situation where profit and overhead are ring-fenced as are the consequences of things going wrong. If actual costs exceed or come below the target for constituent parts of the overall cost, then the pain or gain is shared in a proportion agreed by the parties to that particular aspect of the job at the outset. Given the profound influence of the Overriding Principle, eliminating risk by insurance, almost
guaranteeing profit and overhead, and an incentive to preserve ‘gain’ should, in theory at any rate, give the project team a more comfortable environment in which to work. The insurer would be part of the team and could perhaps work alongside the lawyer to ensure fair play.
Technology can only make BIM work to a limited extent. The commercial arrangements which form the background and create the mood of the team are, at the very least, equally important. These new forms of agreement, and that is a better word than contract, are not
perfect and they are in their infancy. It is something of a contradiction in terms to say there is little, if anything, in terms of case law to show whether they have major flaws or can be exploited in a way that was not intended.
fSUMMARY
BIM in a collaborative legal context
The legal landscape in which BIM operates must change.
Traditional legal arrangements tend to create barriers and isolationism.
New forms of collaborative contract offer a different legal backdrop.
The ‘Overriding Principle’ points the way to a new set of values for the project team.
Is the pain/gain share a new way forward?
Can there be just one lawyer and one insurer in a project team?