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It pays to be open from the onset

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Legalese: Architects need to be able to demonstrate they have no conflicts of interest whatever the procurement route, writes Mark Klimt

A key tenet within the Architect’s Code of Conduct is that conflicts of interest must be avoided. However, whether engaged under a traditional procurement route or in a more novel manner, architects need to be able to demonstrate that this is being observed.

Clients expect their architect to operate solely in accordance with their wishes and not, say, to certify additional expenditure the client disagrees with. Clients understandably expect the architect to act in their best interests, often failing to recognise that part of so doing involves impartial and even-handed administration of the building contract. Failure to do so could lead to the undermining of the client’s credibility, with serious and expensive consequences, particularly in a streamlined adjudication process.

Equivalent considerations apply when an architect is considering a contractor’s application for additional time and money in respect of late information from the architect. Any such award risks criticism from the client and could be regarded as an acknowledgement of wrongdoing. In that instance the simplest course is the best: an architect must objectively assess the contractor’s entitlement. To do anything else exposes the client to greater risk if the administration is challenged, and breaches another term of the architect’s insurance policy relating to deliberate breach of duty.

Where an architect is engaged by a Design and Build contractor, it may find that it has to report poor workmanship carried out by the contractor-client to the same contractor-client – making pejorative comments to the paying party. An architect’s ‘usual’ site role under a Design and Build contract is to provide design clarification to the contractor, rather than inspection and certification, but where such obligations do rest with the architect, once again it must steer a straightforward path in any assessment of quality of work.

The Design and Build appointment will frequently arise by way of novation. A variation on the wholesale replacement of one client party for another is for the outgoing employer-client still to require certain ‘retained’ services of the architect, despite the novation. Such an arrangement is not popular with insurers because of the evident potential for conflict of interest where the architect has a foot in both camps. In such instances, the insurers tend to advise the architect to establish two distinct and separate project teams: one for the contractor and one for the employer. In practical terms, however, this disposes of the very benefit of retaining the architect – namely its familiarity with the project, so in reality this wholesale separation is probably largely cosmetic.

The key to any such arrangement is transparency. A novation agreement that contemplates retained services performed for the employer-client following its replacement by the contractor-client should contain a clause that refers in terms to this arrangement, annexes the two sets of services and states that employer, contractor and architect are all satisfied with this arrangement and that no prejudicial conflict exists.

Even under a traditional procurement route there is scope to allege conflict of interest for an architect when acting as contract-administrator, whether that conflict arises out of having to adjudge the timeliness of its own design production, or in evaluating the relative entitlements of employer and contractor. The success of the arrangement will depend on the parties accepting that the architect must be impartial and having faith in that impartiality. The same is true of any of these variations on procurement – openness at the outset, making the arrangements clear, can forestall any number of would-be allegations about conduct abuse when projects (as they invariably do) become problematic further down the line.

Mark Klimt is a partner at law firm DWF



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