The Lifeline Project was a well-regarded charity. Failure to carry out the targets within the contracts led the charity into insolvency and resulted in a personal, 7-year disqualification order.
The contract in question is the NHF (National Housing Federation) Schedule of Rates Form of Contract 2011, which we, at Anthony Collins Solicitors, comprehensively revised and updated for Rand/M3 in 2011, and still keep up-to-date for them.
The court case was a decision of the Court of Appeal in Sutton Housing Partnership Limited v Rydon Maintenance Limited  EWCA 359.
I was pleased to see that the contract passed scrutiny with flying colours, even though Sutton had substituted their own KPI (Key Performance Indicator) Framework for the KPI Framework document provided with the template contract. Had Sutton used the version from the template contract, both the MAP (Minimum Acceptable Performance) levels and worked examples would have been clearly set out in the KPI Framework document. Instead, in the KPI framework drafted by Sutton, the MAP levels were expressed as “examples”, leading to a concern whether those MAP levels were contractual requirements.
In the case, the court decided that unless the “example” figures were treated as being the contractual MAP levels, the contractual provisions dealing with termination for failure to achieve those MAP levels would have been redundant. As the court had established that the MAP levels were contractual requirements, they upheld Sutton’s right to terminate the contract (following a notice period to give Rydon an opportunity to improve performance) as a result of Rydon’s failure to achieve those MAP levels.
Although this was a victory for Sutton, they won’t be able to recover the full costs of the court proceedings from Rydon, and will be out of pocket as a result. Sutton initially lost in the High Court and, therefore, had to appeal to the Court of Appeal. Had the MAP levels been clearly expressed, as set out in the template KPI Framework provided with the NHF Schedule of Rates Form of Contract 2011, it is very unlikely that Rydon would have even gone to court, let alone have won in the High Court.
This case demonstrates that when you are amending template contracts and replacing documents within them, those bespoke documents and amendments need to cover everything clearly in the template documents they are being drafted to replace.
Rather than substituting whole documents, it is usually better and safer to keep the documents provided as part of the template contract, and add into them any bespoke amendments (such as to add financial incentivisation, as Sutton wished to do) rather than replacing them altogether.
On 23 July, trainees from Anthony Collins Solicitors will host an ‘experience day’, which will involve various activities and presentations, with lawyers and non-lawyers from across the firm.
The Office of the Immigration Services Commissioner (OISC) has launched a new scheme specifically for charities and not-for-profit organisations who want to advise EU citizens on UK settlement.
In the second part of our series on contract management pitfalls, we look at the risks and opportunities presented by payment mechanisms in construction contracts.
Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
The UK Government has been consulting on how it should promote social value in its procurements. Here is our response that we submitted to the consultation...
The Tenant Fees Act 2019 came into force on 1 June 2019.
A recent case in the Court of Appeal will no doubt bring a sigh of relief for employers, but a corresponding sigh of disappointment may be uttered for equality and gender balance in the workplace.
This briefing assists response to the consultation paper by outlining the consultation questions, providing some background information and prompting some thoughts and potential answers.
A report published on 29 May by the Institute for Fiscal Studies (IFS) has found that since 2009-10, local government spending on services has fallen on average by 21% in real terms.
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