Legal blog: The proposals that got away

The work of the late Sir Michael Latham has provided lasting benefits to the industry and its clients. His 1994 government-sponsored review, Constructing the Team, reflected meticulous research and a commitment to fair business practices and remains relevant and influential today.

His work led directly to statutory adjudication and payment rights, enacted and implied in construction contracts within two years of the report’s publication. However, he made other notable recommendations, including those relating to procurement, design management and contract drafting. While we might assume that these recommendations have become business as usual, in fact the progress made over the last 27 years has been variable.

To improve the quality of bid submissions, Latham recommended “a two stage tender process for more complex and substantial projects”, arguably paving the way for the strong endorsement of early contractor involvement in the 2011 and 2016 UK government construction strategies. He also sought to save money for bidders through, for example, pooling the costs of ground investigations undertaken where one consultant is retained by all bidders, and through reimbursement of certain tender costs on large and expensive schemes. Efforts to avoid wasted money on bid costs remain rare, such as the bidder costs paid by Transport for London on the Bank station capacity upgrade.

Latham foresaw BIM in the form of “advanced computer aided design or ‘virtual reality’” by which “all aspects of the design, manufacture, assembly and use of the product can […] be presented in one entity”. The reference to “use” emphasises a whole-life approach, yet it remains doubtful whether BIM in practice has advanced much beyond the use of digital data in the capital phase of a project. We still need to integrate maintenance and operation in our procurement models in a way that harvests the full potential of BIM. 

In order to improve design, Latham recommended that “effective management of the design process […]  should involve a lead manager, the co-ordination of the consultants […] particular care over the integration of building service design, and the avoidance of ‘fuzzy edges’ between consultants and specialist engineering contractors”. Yet design management practices still vary widely. Even with the advent of BIM, the points at which project management and design management intersect remain unclear, for example in debates as to whether a BIM information manager should have “no design related duties” (as stated in the Construction Industry Council’s BIM Pro Guidance Note 4).

Latham suggested “a detailed check list of the design process is required so that responsibilities can be clearly allocated to designers”. Even this modest recommendation has not been adopted in a way that creates a common starting point. The Construction Industry Council published fully integrated consultant scope of services in 2007 but take-up over the last 10 years has been limited. Instead, bespoke and unpredictable approaches remain the norm, and in 2017 the parties are still contesting the responsibility of designers for adhering to a budget (Riva Properties & Ors vs Foster + Partners ([2017] EWHC 2574).

Without early engagement of specialist contractors during the preconstruction phase, there is no way of achieving Latham’s demand that “there must be integration of the work of designers and specialists” and no effective way to eliminate the “fuzzy edges” that Latham perceived give rise to many claims and disputes. Interestingly, Latham also recommended “subcontractors should undertake that, in the spirit of teamwork, they will co-ordinate their activities effectively with each other”, apparently proposing a multi-party supply chain alliance of the type recently trialled by Surrey council and Kier. 

Latham supported partnering, which he viewed through a commercial lens. He saw the benefits of a “formal partnering agreement” founded on “a relationship of trust, to achieve specific primary objectives by maximising the effectiveness of each participant’s resources and expertise” and “not limited to a particular project”. However, he emphasised that partners must be sought “through a competitive tendering process” and that partnering arrangements “should include mutually agreed and measurable targets for productivity improvements”. These recommendations were picked up in the government construction strategies and saw the light of day last year in the Association of Consultant Architects’ FAC-1 framework alliance contract. 

Latham made clear the importance of an interlocking set of consultant appointments, main contracts and subcontracts in easily comprehensible language. He underlined the power of shared financial motivation, the benefits of commitment to teamwork and fair dealing with all parties (including subcontractors, specialists and suppliers), and the need to spell out work stages through milestones and activity schedules. He saw all these features in the NEC suite of contracts and invited JCT to take a similar approach. Yet many years on and notwithstanding its other strengths, JCT2016 still offers no interlocking consultant appointment (except for public sector projects), does not provide for a contractual programme and treats a commitment to teamwork only as an option.

Latham offered a clear vision of how clients could seek better results and how the industry could deliver them. We are still only part of the way there.