A lawyer has just won a prize for a paper that challenges the NEC evangelists. You don鈥檛 have to like it, just read it. Then you too can be the judge
The highly commended prize entry in this year鈥檚 Society of Construction Law competition is tricky. Solicitor Mike Barlow of MacRoberts, Edinburgh, won the award with his - controversial - paper, in which he says: 鈥淭he NEC3 places a greater administrative burden on the parties compared with other standard forms of contract鈥. If instead, he had yelled 鈥淣EC3 is worse than JCT鈥, well he would now be languishing in the cells four floors down in the ICE. NEC folk are evangelists, disciples following a holy scripture. Pity Mike Barlow
鈥 he is doomed, doomed.
He tried to be tactful and sensitive: 鈥淒espite the apparent benefits of NEC3, for some observers at least, it remains a controversial choice - particularly in legal circles.鈥 Well, he is wrong. When I was in Edinburgh giving a paper to real constructor people, there were howls of derision when I said: 鈥淚 know, like me, you all love NEC.鈥
The NEC3 has a substantial impact on the fortunes of the parties who enter into it. And to be fair, as an NEC adjudicator and arbitrator myself, I vouchsafe that few users understand this animal
Mike Barlow goes on: 鈥淭he sheer brevity of NEC3 gives rise to lack of detail, especially when NEC3 is compared with鈥 - oh dear - 鈥淛CT 2009, which contains detailed provisions about the parties鈥 rights and obligations in different scenarios. As for the language on each page, being in the present tense is awkward, especially since everything to do with putting buildings up is in the past, late tense.鈥
The aim of his paper is to stimulate debate. This contract has a likely substantial impact on the fortunes of the parties who enter into that contract. And to be fair, as an NEC adjudicator and arbitrator myself, I vouchsafe that few, very few, users, lawyers, judges, adjudicators, ICE folk, or sweeper-upperers understand this animal. So Mike Barlow鈥檚 paper is worth reading (www.scl.org.uk).
He also says the absence of various market standard provisions, and certain specific differences in NEC3鈥檚 risk profile, compared with conventional construction contracts, needs to be highlighted and dealt with. He recommends use of the hitherto despised Z clauses. In short, this very learned lawyer detects gaps - 鈥渢raps for the unwary鈥 - which ought to be filled sensibly, and the remedy is new, well-drafted and sensible Z clause clarifications. Hurrah! The Z clause device in NEC is intended precisely for all that. The Zs have, however, gained a reputation for 鈥済otcha鈥 small print.
Now it is plainly right that it was an awful mistake to write NEC in the language it now stands in. Lawyers are the folk who point construction customers towards which contract document to use. It hasn鈥檛 dawned on NEC that if lawyers can鈥檛 take comfortably to NEC, they will use JCT instead. Simple. Mike Barlow picks out clauses that are, he says, a masterpiece of obfuscation. Take the rigmarole of what is called the 鈥減ain/gain鈥 mechanism. These rules need redrafting using more conventional language, and it鈥檚 no good that the evangelists are toffee-nosed about doing that.
It hasn鈥檛 dawned on NEC that if lawyers can鈥檛 take comfortably to NEC, they will use JCT instead
Come on NEC, play the lawyers to win them over. Stop kicking out. And what the blazes is meant by the expression 鈥渢otal of the prices?鈥 It actually means 鈥渢he price鈥. Why not say so? Elsewhere, there is a complete tangle where it says the only rights to a 鈥渃ompensation event鈥 are changes to prices, completion date, and key dates. Barlow sees a quirk in the drafting, where the contractor has no entitlement to a compensation event - when it is plainly intended - behind the words on the face that compensation is payable.
The emperor鈥檚 new clothes come right off when Mike Barlow bravely ventures to suggest that the great sales pitch of NEC, and the one that attracted Sir Michael Latham to NEC, is not fathomable. It鈥檚 the one about the employer, the contractor and the project manager coming to the party and behaving via the contract, 鈥渋n a spirit of mutual trust and co-operation鈥. Well, says Mr Barlow: 鈥淚t is not clear how - IF at all - this requirement might effect the meaning of a particular provision.鈥 Oh, what a spoilsport you are, Mr Barlow. This magic dust clause is put in front of me as adjudicator as an answer to everything. And I say yes, yes of course.
Where were we? Ah yes, the Z clauses and what鈥檚 to be done. Easy, read his prize paper. Like it or lump it, but read it at least.
Tony Bingham is a barrister and arbitrator at 3 Paper 好色先生TVs Temple.
This article was published under the headline: 鈥淩eligious education鈥.
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