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Another boost for lawyers' waistlines

Those of you who read my recent article on warranty agreements for professional 'sub-consultancies' will be interested in the way the now much-vaunted (and sometimes ridiculed) Housing Grants, Construction and Regeneration Act impinges on professional appointments.

Part II starts by giving a rather unexpected description of a construction contract. Included in the definition is 'an agreement with a person for . . . arranging for the carrying out of construction operations by others, whether under sub-contract to him or otherwise'. So architects, whether appointed directly by clients (that would include traditional appointments and design-and-build arrangements) or indirectly as sub-consultants to another lead consultant, are appointed - like it or not - subject to the terms of the new act. In the event of any conflicts the act will, of course, take precedence over all riba standard forms.

Perversely, construction contracts include an agreement 'to do architectural design or surveying work' or 'to provide advice on building', where these relate to construction contracts. But is feasibility design work, a planning application or a design competition submission to be included? How remote from the 'construction operation' does an activity have to be to escape? At present it is anybody's guess as there has been no test case. Watch those lawyers' waistlines!

The act makes clear that construction operations include 'alteration, repair, maintenance, extension . . . whether permanent or not'. Indeed, it appears that the legislators intended all normal construction operations to be included, but I can see more rich pickings in determining the effect of s.105(1), which attempts a comprehensive list of construction operations, and s.105(2), which lists those that are not. It seems ludicrous that minor internal decorations are listed as construction operations while erecting the steel structure for a nuclear reprocessing plant is not.

All contracts with residential occupiers are excluded, including designing that one-off house, however large. But there may be uncertainties here as well - my practice is refurbishing an ambassador's residence with the most magnificent state function rooms - does the act apply here?

But without being too pernickety, what bearing does the act have on everyday architectural practice? Well, s.108 provides a right to both parties to refer disputes to immediate adjudication. So, if you fall out with your client or the project manager over payment, you can take the issue straight to the third party to decide. Whether or not you will get a just decision - or indeed any decision - is a matter of intense speculation that I shall return to; but if you do by chance succeed, the decision is binding unless or until the dispute is finally resolved by arbitration or through legal proceedings.

Secondly, in ss.109-113 the act has provisions for payment, including entitlement to payment in instalments which, on the face of it, look helpful. If not paid when due, then there is now a right to suspend performance (but is this professional?), and there is a general prohibition on pay- when-paid provisions.

Believe me, though, the big employers will continue to bully small consultants, for parties 'are free to agree the amounts of the payments and the intervals at which, or the circumstances in which, they become due'. As we all know, being free to agree usually means resigned acceptance of imposed terms. C'est la vie.

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