Sir Vivian Ramsey, former judge of the Technology and Construction Court, considers the new editions of the Professional Services Agreement suite published by the Association for Consultancy and Engineering (ACE), and why the changes were implemented. The revised agreements include a new Professional Services Agreement and Sub Consultancy Agreement as well as new Schedules of Services for both Civil & Structural and Mechanical & Electrical Engineering.
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What changes have been made to the new editions of the ACE Professional Services Agreement suite and why?
Experience in the courts and arbitration indicates that many agreements between consultants and their clients are made by an exchange of letters and with little formality. This may, of course, be the very reason why a dispute has arisen. Sometimes the speed of appointment means that consideration of the detailed terms of the consultancy agreement takes second place to performing the work, particularly for small and medium sized firms.
For many years, the ACE has provided the main standard forms of agreement which consultants have used. They have provided useful guidance and, when properly used, have successfully regulated the relationship between clients and consultants. The existing suite was last revised in 2009 and it has become necessary to take account of several developments since that date.
The recent release by ACE of its first major update of the Professional Services Agreement suite in January 2017 is therefore to be welcomed. The revised agreements include a new Professional Services Agreement and Sub Consultancy Agreement as well as new Schedules of Services for both Civil & Structural and Mechanical and Electrical Engineering. The aim of the new editions is to improve the efficiency and certainty in the way in which professional services are procured. This is assisted by detailed guidance notes which accompany the agreements.
The focus has been on the creation of a logical, user friendly format containing a clear and fair allocation of risk between the client and the consultant. At the same time the new agreements have addressed issues which now arise from industry practice and Government initiatives such as good payment practice, collaboration, risk management, BIM, dispute resolution and soft landings initiatives. The changes have taken account of industry consultation and the views of users.
Issues arise in respect of the rights and liabilities of consultants. The new agreement contains comprehensive provisions including liability relating to deleterious materials, a reasonable endeavours obligation in respect of any programme for the Services, Consultant’s responsibility for sub-consultants, timing of requests for information from the Client, the authority of the Consultant’s Representative, the ability of the Consultant to act as agent and the duty for the Consultant to exercise any discretion in a fair, impartial and professional manner.
Joint obligations are dealt with and include a duty of collaboration supported by a mutual early warning obligation in relation to matters that are likely to affect the provision of the Services leading to discussions, actions and measures. There is also a duty to work together to analyse and manage any risks.
Variations to the Brief or the Services are the subject of express provisions and there is also provision for payment for disruption to the Consultant’s work. There are clauses dealing with limitation of liability, proportionate joint liability and time limits for claims, which together with insurance deal comprehensively with these necessary topics. There are also particular rights of suspension, in addition to the familiar termination provisions.
As with all standard forms the Schedules allow for detailed provisions, including BIM protocols, to be chosen for the project and any bespoke arrangements. As always, the Schedules require care in completion. A standard collateral warranty is included with an optional provision of beneficiary’s step-in rights.
It can therefore be seen that the approach taken in the new Professional Services Agreement, which is also reflected in the other documents, makes this new suite of agreements an essential part of regulating obligations and avoiding disputes. It will be welcomed by consultants and clients alike.
Copies of the entire Professional Services Agreement suite are available to view and purchase from the ACE website.