The hardest thing to see is always the one thing that is missing.

A college wanting to achieve early commencement of work engaged a contractor using a short form letter of intent, instead of a building contract. When delays occurred, the college found that it could not deduct liquidated damages, because the letter of intent did not include any provision for these. Liquidated damages, being purely a creature of contract, are not recoverable at common law in the absence of a specific contract provision.

The college successfully sued its project manager for failing to advise on the risks of the letter of intent. (The Trustees of Ampleforth Abbey Trust v Turner & Townsend Project Management Ltd [2012] EWHC 2137.)

One take-away is the importance of advising clients to consult their solicitors before pursuing unorthodox forms of contracting.

But the big lesson is to use checklists and templates to help identify when a key task or piece of information is missing. Checklists can help you track whether changes to the brief have been communicated to all stakeholders; or sound alarm bells when a contract is missing a vital clause, or when you engage a sub-consultant without a contract or without insurance. Use them as a double-check to alert your staff to risks because, no matter how much time you invest in training, even the most diligent employee can never absorb 100% of the experience you have gained.

Checklists and templates help capture your hard-won knowledge from previous projects, combine it with the learnings of all your senior team, and share it with your staff.

Our informed subscriber documents include checklists that consolidate our risk management knowledge, as well as examples of special purpose contracts and letters. We make these documents customisable so you can add your own knowledge and tailor them to reflect your priorities.

These are just some of the key risks checked off in our most recent Example Document, the Sub-consultant Engagement Checklist:

• Have you checked the company name of the sub-consultant, not just the trading name?
• Are the sub-consultant’s obligations “back to back” with your obligations to your client under the Head Agreement?
• Has the sub-consultant’s scope of services and fee been clearly agreed in writing?
• Are there any important exclusions from the sub-consultant’s scope?
• Have you carefully checked and considered any clauses limiting the sub-consultant’s liability?
• Have you obtained a certificate of currency confirming the sub-consultant has the required level of insurance?

Our Example Documents also include a pro forma contract for engaging sub-consultants on a “back-to-back” basis with the Head Agreement.

Discounted prices on subscriptions are available for professional indemnity insurance clients of our sister business Planned Cover. Please contact us at info@informedprofessionals.com.au with any questions about our subscriptions.

 

Wendy Poulton

Risk Manager