RIBA has recently published their new standard terms of appointment. These new terms will undoubtedly have been welcomed by architects and other consultants but RIBA has not addressed the requirements and concerns of their clients and project funders. In the current market, where development funding is hard to secure, clients may find that they are placed in an ever more difficult position as their consultant teams and the funding institutions continue to pull in different directions. No longer is there a specific obligation on the consultant to:
- comply with the client's brief;
- to perform the services in accordance with the project procedures;
- to provide adequate resources; or
- to maintain effective review procedures.
That is not to say that the consultant does not have to perform his role in accordance with these requirements but such obligations will now be subject to the exercise of reasonable skill and care. Further, the cap on liability which used to be subject to agreement by the parties is now automatically set at the level of professional indemnity insurance, effectively removing any prospect of clients being able to agree that no cap will apply.
RIBA has also revised the position on termination, giving the consultant equal rights to terminate at any time on reasonable notice. A revision which will not be welcomed by clients and their funders, who need to be confident that the project will be delivered on time and to cost.
On a positive note the possibility of the consultant being required to give warranties or third party rights or to agree a novation is now addressed. Not surprisingly the backstop position is that the Construction Industry Council standard forms will apply but there is an option for an alternative form to be used. This option will undoubtedly be required where development relies on a finance provider.