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35 Hever Road Mr Murray Armes Dear Mr Armes, Chartered Institute of Arbitrators: News and
Views South East Branch I was most interested to read the article titled 'Independent and Fair Decision Making' by Jonathan Bowcott of MBM Consulting in 'News and Views' Issue No 67, September 2008. Mr Bowcott made a persuasive case for the role of independent certifier being taken away from the Architect, due essentially to the conflict with discharging his role as Employer's Agent, where he has to act in the best interests of the Employer. This article was discussed at length in the Editorial, it being forcefully argued that the role of independent certifier need not conflict with the other duty of acting as Employer's Agent. As a Chartered Civil Engineer and having been involved in assessing the incumbent obligations and liabilities in professional appointments for many years, I think it is worth drawing attention to the increased risks which professionals are now subjected to as compared to say, 20 years ago. In the late 1980's consulting engineers were often employed under industry standard forms such as the ACE Agreement, to public sector clients. These terms were normally benign and the client generally not litigious. In such circumstances the Engineer would feel that he could largely act without the threat of criticism by the client, or legal recourse in discharging his duty as a Certifier. He would therefore not be scared to rectify a design by issuing variations, notwithstanding that the project outturn cost would increase. By contrast in today's climate, many appointments are bespoke and impose considerable additional contractual risk onto the consulting engineer. The client is likely to be from the private sector and hence by definition more likely to be critical of a consultant in the event of the design needing rectification and resulting in additional cost to the Client. Such clients are likely to seek reimbursement of these additional costs from their Consulting Engineer. In addition litigation is much more common in today's climate, as witnessed by copious adverts in the media for solicitors specialising in personal injury claims. Hence, in my view the role of the Consulting Engineer (or other professional certifier) has been made considerably more difficult by the changed forms of contract, different type of client and generally more litigious culture in the United Kingdom. Presumably this situation can only be exacerbated by the impact of the 'credit crunch'. From my experience I would suggest that there are certain situations where it is almost impossible for an Engineer to be impartial as required under standard forms such as ICE, and will in any event be implied by common law1. In the early part of my career I was the Deputy Resident Engineer on a civil engineering project for a local authority. The Resident Engineer, like me, was a direct employee of the local authority. He had worked on the scheme design for many years, prepared the contract documents and assessed the tenders. The contract was awarded to the lowest tenderer, such tender being value at approximately 10% below the cost estimate undertaken by the Employer, this estimate being consistent with the median value of the returned tenders. The Contractor's Agent had also been responsible for the tender. A situation therefore existed whereby the Resident Engineer had a vested interest in minimising change since variations would imply he had been remiss during the document preparation stage and the Agent's main incentive was to maximise change in order to recoup the loss which he had created by under pricing the tender. In retrospect it is clear from these circumstances that the Resident Engineer found it virtually impossible to be impartial and it was no surprise that frequent arguments occurred between the Resident Engineer and Agent. With the benefit of hindsight it would have been far better if staff without such vested interests had been employed in the key roles of Resident Engineer and Agent. Perhaps a possible solution to the ongoing issue and of criticised impartiality is for one professional firm to undertake the design/document preparation and for another to supervise/administer the contract. This would eliminate the possibility of partiality but be detrimental in that the supervising entity would have minimal understanding of the design philosophy behind the scheme and the reasons why certain design decisions had been made. Yours sincerely, Ian Jones 1Costain v Bechtel (2005) |
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