AT WHAT COST?
Although most litigation involving architects concerns allegations of negligent design or contract administration there is usually, nestling away in the background, a claim by the architects for their outstanding fees, writes Kim Franklin.
Because the sums at stake in the negligence action usually dwarf any fees claimed, they are more or less overlooked until the final reckoning. If anything is said about them, they tend to be agreed, subject to the crossclaim. The upshot is that there are very few cases concerning the principles upon which fees should be calculated.
There may be another reason why disputes about fees do not feature prominently in the law reports. The basis upon which a consultant charges fees is agreed with the client. The clearer the contract, the less scope there is for argument.
But construction contracts are inherently complex.
The quintessentially English tradition of permitting the employer to vary the scope of the works after the contract is let means that, almost by definition, there is no certainty as to what works will be done, how much they will cost, or when they will be finished.
Where consultants link the calculation of their fees to contracts of this nature, the client is signing up to uncertainty. In one case an employer sought to argue that although an architect's fee was charged as a percentage, it was fixed on the original contract value and ought not to be increased to reect substantial changes in the works.
Alternatively, the rigidity of charging on a fixed-fee basis does not sit comfortably with the exible nature of the underlying contract. Fixed-fee agreements usually therefore include provisions permitting the consultant to charge extra fees for additional services.
What is, or is not, an 'additional service' can of course present fertile ground for debate.
As any non-contentious lawyer will tell you, the way to avoid ever having to meet a contentious lawyer is to ensure that your contract of engagement clearly explains your entitlement in all eventualities. But it is human nature to enter into new projects with a spirit of enthusiasm rather than looking over your shoulder trying to predict what might go wrong.
And seemingly straightforward provisions such as '10 per cent of all sums certified' may not look so clear cut when part of the works are let on a contract that does not provide for certification.
The picture is further complicated if the retainer is determined before the conclusion of the contract.
Many contracts provide for the suspension of services or determination. Some provide for the consultant to recover 'losses caused' or 'costs incurred' as a consequence. Few spell out what those losses or costs are. Is the consultant entitled to claim the whole fee that would have been earned had the retainer not been determined? If so, is it calculated on the projected final account value at the time, or the actual final construction costs, even where those costs have increased considerably, post-determination? The answer is that it depends upon what you agreed in the first place.