Informing the client of additional costs early will save you a lot of toil and trouble
Legalese: Too often clients will ignore notifications or respond in a confrontational or evasive manner, says Mark Klimt
‘I am in blood stepp’d in so far that should I wade no more, returning were as tedious as go o’er.’ Architects who find that they have unwittingly provided substantial additional services without first securing client approval, and facing the prospect of being unable to recover their additional fees will know exactly how Macbeth felt. Arguments over whether something is part of the contracted basic services or additional, and whether it has been properly authorised are legion. Too often a conscientious architect will continue to provide the services for the good of the project without waiting for a recalcitrant client to provide confirmation.
Add to that considerations over whether an architect should be entitled to recover prolongation costs if its percentage fee has already risen with the construction cost and, even before any discussions about why these events have occurred, the stage is set for battles far bloodier than anything Dunsinane might offer.
As usual, the starting point is a clear appointment contract, with the basis of the fee proposal and what it embraces carefully defined, so that a client is properly informed. The RIBA SFA sets out the services to be provided at each work stage and has a section for other services. It is as important to make clear what the basic service does not include, as to explain what will be provided.
Clients will not necessarily accept the RIBA standard, nor will it be conducive to a successful relationship if the client is given the impression that its architect will effectively ‘work to rule’, and not go beyond the listed services. Some flexibility therefore needs to be built in, to allow for, say, reasonably incidental services to be part of the basic service.
Clients will also want to know that the risk of unforeseen events will not fall on their shoulders, so provision could be made for an increase in a particular service of up to a pre-arranged percentage, also falling within the basic service. Time spent in realistic discussions at the outset may save a lot of trouble later.
Once the basic services have been established, a sensible process for notifying and approving additional services and expenditure needs to be applied. By their nature, additional services will not be capable of precise quantification in advance. It would be unfortunate for an architect to be under a strict contractual duty to give a quote for additional costs; otherwise, when that is inevitably exceeded, the client will argue its consent has been undermined.
But, if the architect has agreed to give timely notice of additional services, notification must be given. The client must also be contractually obliged to respond to this notification quickly. Far too often - even with the threat of adjudication in the background - clients will either ignore such notifications or respond in a confrontational or evasive manner, effectively relying on the architect’s good nature and professionalism to do what is necessary, without the written confirmation in place.
Finally, as the landscape grows ever more unpleasant, architects must learn to be ruthless in enforcing the terms of their hard-fought contracts. If a client has insisted on stringent safeguards before additional services can be authorised and extra fees incurred, then there is nothing wrong in turning these requirements back upon the client and insisting on compliance on pain of downing tools, rather than taking sole responsibility for maintaining the programme.
Nor does there have to be a stand-off with a client who is genuinely of the view that the additional service is not justified; the parties could agree to pay the disputed fee into an interest-bearing joint account and commit to a streamlined impartial process of determining where the entitlement lies. But with profit margins being squeezed ever more tightly, what architects can no longer countenance is continuing to work frenziedly to rescue projects that have taken unexpected turns, and then find that they are also financing the project. Who needs that type of toil and trouble?
Mark Klimt is partner at Fishburns. He is legal adviser to the RIBA and operates the RIBA Helpline