In the last few weeks FIS has seen an increase in requests from members related to contractual matters, some that are reaching a critical point.
The range of requests for support have included delayed payments, price fluctuations and misalignment in pricing of variation as well as concerns over design liability and transfer through contracts. As inflation and delays continue to erode margin, such issues are seem set to become more commonplace – whilst the industry talks about transformation, there is a danger we are becoming more contractual.
To support members in a challenging time, FIS is delighted to announce a new consultancy arrangement with Bunton Consulting Partnership. This partnership will enable FIS to extend support for members experiencing commercial and contractual issues, by referring them to a highly experienced Industry Consultant, Len Bunton FRICS FCIArb Hon FRIAS (further details below). Len will provide an initial free consultation of 1 hour to discuss and review the specific issues faced and to help develop a strategy to address. Should further advice and support be necessary, thereafter then Len will agree the necessary fee levels with each FIS member.
Commenting on the introduction of this new service, FIS CEO Iain McIlwee stated:
“This partnership further strengthens the support FIS provides to its members in managing contractual concerns. Sadly we still operate a contractual structure that often encourages adversarial behaviours – we even call ourselves contractors rather than constructors and the result is we spend as a sector 1.9% of turnover, almost double that of any other industry, on legal disputes. The cost to the bottom line is crazy, the cost to lives and wellbeing morally reprehensible. At FIS we are focussing on procurement as a key lever for change, but we are very conscious we are where we are and it has never been more important for members to review their contractual positions and make sure they understand and can quantify risks. We have seen an uptick in administrations in recent months and there is a fear that the industry is entering survival mode. This is when we are tempted to resort to the worst possible behaviours. We are grateful to Len for stepping up to provide additional help in these challenging times – his work on the Conflict Avoidance Pledge and advocating this approach makes him a perfect partner for FIS.”
As part of the new relationship Len Bunton made the following comment:
“I have dedicated my career to conflict avoidance and this for me starts before the contract is even signed – it is all about getting off on the right foot. You need to enter contracts with your eyes open to the risks and reinforce to everyone involved in the project that paperwork is everything and that any instruction must be documented and confirmed in writing at the time.
The clearer the information, the less ambiguity which means less scope for misunderstanding and reduced opportunity to debate and delay. It is also critical to make sure all are aware of contractual deadlines and any how any deviation from programme or variation in price needs to be reported. Doing all of this won’t guarantee the avoidance of all disputes, but they will see many off before they start and allow for speedier resolution and ensure that you are in the best possible position should you need to rely on third party intervention. I am looking forward to working with FIS Members to resolve existing issues, but also offer the advice and support that will help them avoid the next one too.”
With Len, FIS is actively encouraging members and the wider construction community to look at Conflict Avoidance Pledge (CAP), based on the simple concept – the cheapest way to manage any dispute is not to have it at all. The CAP is a contractual mechanism, which helps parties to avoid getting embroiled in pro-longed and damaging disputes. Where disagreements begin to develop, CAP enables parties to address and resolve matters early, collaboratively and inexpensively. The process recommends standard clauses that you can include in your contract.
- Sample CAP Clause – January 2021
- Find out more about the RICS Conflict Avoidance Process (supported by FIS and the Construction Leadership Council) here
Further information about Bunton Consulting Partnership is available below:
Len Bunton FRICS FCIArb Hon FRIAS – has over 40 years’ experience as a cost consultant and, adjudicator, arbitrator, mediator, expert witness and conflict avoidance consultant. He has extensive experience on major projects. Len is Vice Chair of the Conflict Avoidance Process Coalition and is absolutely committed to the Conflict Avoidance Process.
Bunton Consulting Partnership, 2 Ardoch Way, BRACO, Perthshire, FK15 9RH | Also at Princes Exchange, Princes Square, LEEDS, LS1 4HY | E: firstname.lastname@example.org
This service compliments the existing FIS Legal and Helpline and Contractual Support and can be accessed by calling the FIS office on 0121 707 0077.
For the full range of supporting advice and information available to members you can visit the FIS Contractual Commercial and Legal Toolkit here.