Which brings us to PPC2000. The document is certainly worthy of praise as the most comprehensive attempt to date to capture the partnering genie in a contract-shaped bottle.
But can the genie ever fit inside? And if so, will it retain its powers when released? If PPC2000 is to perform a contractual role, it should at least do so effectively, so that legal disputes (if unavoidable) can be quickly and cleanly resolved without undue damage to the intangible aspects of the partnership.
This is not the case. For instance, the extension of time clause operates only if something adversely affects the "Date for Completion" (the contractual target date). This includes the contractor's "float" (extra time built into the programme to take account of contingencies).
If there were delays that did not affect the completion date, this would amount to the client appropriating this float, even in cases of client default. Such a provision would encourage contractors to "hide" float in the programme, which is hardly true to the spirit of partnering. Furthermore, if the contractor is already in culpable delay, there is no mechanism for extending the completion date.
The inclusion of all parties in a single contract is suspect. The traditional multiplicity of documents is replaced by a maze of joining agreements, consultants' schedules and payment terms. And each consultant and specialist will still have to execute collateral warranties in the usual way.
It also seems at least possible that each consultant and specialist will seek amendments to its rights and obligations by incorporating amendments to its joining agreement. Thus, even if the number of documents is reduced, the potential for complexity and subsequent errors must have increased. The spectre of having to consider comments by members of the partnering team on each others' terms of engagement could make settling the documentation a lengthy and expensive process.
An area ripe for amendment is the wording used for the first net contribution provision option. If the contractor accepts full responsibility for the design and build of the project, as would be the case under first option provided in the partnering agreement, what happens if it becomes insolvent? In the case of something going wrong, the client may find that it cannot claim against other members of the project team.
The second net contribution option, which allocates responsibility between members of the partnering team, also causes concern. Such obligations are potentially in excess of actual responsibility and may well be considered by insurers as uninsurable, and therefore objectionable to consultants. It is also interesting to note that the client is excluded from the second net contribution, but not the first. There appears to be no logical basis for this distinction.
Finally, there are a multitude of ways in which the document's "legal" and "partnering" personalities sit uncomfortably together. In addition to the legally ambiguous requirement to work "together and individually in the spirit of trust, fairness and mutual co-operation", there is clause 3.6, which requires that decisions of the core group should be carried by "consensus": does this mean majority or unanimity? Also, the contractor can object to the client's instructions on the basis that they are "demonstrably not in the best interests of the project". The best interests of the project vary according to each party's perspective.
Each of these areas may be corrected by adding yet another document, a list of amendments. But bespoke restructuring somewhat defeats the purpose of using PPC2000.
Postscript
Tim Steadman is head of the construction group at solicitor Clifford Chance. This article was prepared with help from Alastair Innes.
