
The Law Commission published its report on Technical Issues in Charity Law in September 2017 following a public consultation.
Timely, then, that the NEC used its 25th anniversary conference to launch the new (and its first) NEC4 Alliancing Contract. In a packed workshop held on the new contract, it was feted by members of the NEC’s drafting panel, Ross Hayes and Robert Gerrard, as “a new breed of NEC contract”, whilst the general consensus in the room of users was that it is “not for the faint hearted”.
“A new breed of contract”?
Alliancing contracts are the “new kid on the block” of major construction and infrastructure contracts. They have been around in bespoke forms for some time, having been particularly popular in Australia, for example, and the NEC’s publication follows on from the publication of the ACA’s Framework Alliance Contract last year.
It is a multi-party contract with major stakeholders to works forming an “alliance”. These are likely to include the client, contractor, key subcontractors and consultants. NEC considers this a shift away from its other contracts because it takes principles of partnering beyond the traditional two-party contract by binding all key players on a construction project together, thus sharing risks equally.
Parties to the contract form an Alliancing Board, who make the decisions around the delivery of the contract. This is very different from a two-party contract which is driven by the client. The Alliancing Board then appoints an Alliancing Manager who is responsible for the day-to-day running of the contract.
For regular users of NEC contracts, the contract will be recognised as a further extension of the NEC’s partnering approach in which all parties share the “pain and gain” in the hope that there will be a shift away from site-based blame culture, so that works can progress without conflict where unforeseen problems arise. Most notably the parties come together to form their own objectives and the collective objectives of the project before working together to deliver these.
“Not for the faint hearted”?
As with all NEC contracts, they should only be adopted by clients who have the appropriate resources and experience to manage them. Problems arise where they are run (or amended) with the assumption that a JCT-style approach will work. It won’t. Further it should only be used by parties who truly want to partner with Contractors and who are comfortable enough to relinquish control over direction of the works to the Alliancing Board.
The Alliancing Manager will be central to ensuring the success of the contract, bearing the responsibility for the delivery of multi-party objectives. It will therefore be crucial to ensure that an appropriate Alliancing Manager is appointed with the right expertise. Furthermore, the NEC is clear that the Alliancing Contract will not be suitable for all works projects as the level of contract administration and collegiate objective making will only be appropriate where proportionate to the value/risk of the works.
If you have any questions relating to the topics raised in this article, please contact Alistair Smith.
The Law Commission published its report on Technical Issues in Charity Law in September 2017 following a public consultation.
Changing charitable purposes and amending governing documents.
One of the stated aims of the Green Paper is “to deliver the best commercial outcomes with the least burden on the public sector".
The proposals concerning dynamic purchasing systems (DPS) and framework agreements are the most disappointing aspect of the Green Paper.
Family team partner, Elizabeth Wyatt, is delighted to congratulate Kadie Bennett for attaining Resolution Specialist Accreditation in both children law - private and complex financial remedy matters.
On 11 February 2021, the Pension Schemes Act 2021 was given royal assent, setting out a framework for several major changes that will certainly be of interest to employers and pension funds alike.
Matthew Wort, partner, speaks on today’s Supreme Court judgment for sleep-in shifts.
The Supreme Court has today (19 March 2021) handed down judgment in the cases of Royal Mencap Society v Tomlinson-Blake and Shannon v Rampersad (t/a Clifton House Residential Home).
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.