A lot of time goes into the procurement process and the negotiation of the contract for the construction of individual projects. Just as important is the selection of the correct professional appointments under appropriate terms and conditions.
Many professionals are content to be appointed under the documentation issued by their relevant trading body, such as the RIBA and RICS forms of appointment for consultants.
It is just as important to take care when appointing consultants as it is when appointing contractors.
Normally a consultant will provide his or her own standard terms and conditions which are appended to a standard form.
These professional appointments are genuinely fair to both parties but there are certain clauses that need to be considered. First, the professional indemnity insurers for consultants are very keen to introduce net contribution clauses whereby the consultant will only be liable for damages arising out of negligence which are proportionate to the contribution of that consultant to the project.
This flies in the face of the standard rule that more than one party can be liable but if a party is liable it will be liable for the full party of damage it will then need to seek a contribution from other professionals.
This simple amendment reduces a client’s capacity to claim in full against any one consultant but requires the client to commence multi-party proceedings against a number of consultants and even the contractor.
Another area which must be considered carefully is the level and nature of the professional indemnity insurance offered by consultants. Consultants’ insurers do not like the level of indemnity to be uncapped and it is normally the case that contracts will state that a professional must have a minimum insurance cover. Furthermore, it is prudent to check that the insurance in question is not an “aggregate” policy but a policy which will pay out to the full level of the indemnity for each and every claim made.
Whilst the terms and conditions of an appointment are very important, the scope of services must also be reviewed. This is especially the case where there is more than one consultant working on a project and it is key that their respective services are clearly delineated.
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