Consultancy contracts webinar highlights engineer’s crucial role

16 Apr 2020

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The fourth in FIDIC’s Covid-19 webinar series took place on Thursday 16 April with an event focusing on consultancy contracts, writes FIDIC communications advisor Andy Walker. The webinar was attended by 900+ attendees and looked at the various issues which consulting engineers may face while executing consultancy agreements with their clients and performing the role of the engineer during the current COVID-19 pandemic.

Chaired by FIDIC CEO Nelson Ogunshakin, webinar speakers included Vincent Leloup, chair of the FIDIC contracts committee, FIDIC board member Liu Luobing from China, Systra chief executive Pierre Verzat from France, James Mwangi, president of FIDIC’s Africa region GAMA, Andrew Read, a partner at Pederson Read in New Zealand and Clyde & Co partner David Brown from France.

Vincent Leloup, chair of the FIDIC contracts committee, (pictured above) spoke about the role of the engineer in the FIDIC forms of contract, highlighting the wide range of powers that they have including for health and safety issues, which were particularly relevant given the current stipulations on the extra protective measures to be taken to guard against the spread of Covid-19. Leloup also outlined some of the exceptions and variations to terms included in FIDIC contracts that could be relevant during the current crisis. Notwithstanding the need for consultants to be fully familiar with their contract terms, a literal interpretation of the contract was not the best route to take in the current climate, especially if this led to more disputes and potential bankruptcies. Dialogue was key at the present time, said Leloup.

Clyde & Co partner David Brown said that there would be some interesting arguments over the clauses in consultancy agreements going forward in the context of Covid-19. He praised the new FIDIC forms of contract for their more flexible and collaborative approach and giving the engineer the power to proactively bring the contract parties together. This would offer much more scope to get parties around the table to work together, collaborate and minimise future problems, Brown said. These were significant comments from a disputes lawyer of many years’ experience, highlighting the overriding need for dialogue and effective communication to resolve any difficulties arising from the coronavirus crisis.

Systra chief executive Pierre Verzat said that his firm’s current focus was on collaboration with its clients in order to deliver contracts in what were difficult circumstances. He highlighted the new ways in which his staff were working, with digital meetings and technology to the fore. For those working on site, health and safety was more important than ever. Going forward, Verzat thought that measures could be put in place to facilitate a quick return to site work which would enable the industry to get back on its feet more quickly after the crisis subsides. He praised the government measures that were being brought in to support the industry which were having a positive effect and were necessary to avoid firms suffering more challenges.

James Mwangi, president of FIDIC’s Africa region GAMA highlighted the fact that many firms in Africa were small and not as well equipped to cope with the effects of the pandemic. Engineers were playing a very important role in explaining to all contract parties how events were unfolding and what their options were to resolve difficulties that were arising. Mwangi also made an interesting point about construction project budgets being reallocated to the effort to combat Covid-19. This is interesting because there is evidence that such reallocations are happening in other areas of the world.

Pederson Read partner Andrew Read spoke about the uncertainty in the industry currently. This was normal given the ongoing crisis, he said. “We need to communicate more with contract parties than we otherwise would,” he said. Leadership was critical in the current climate. Many engineers were experienced in analysing data and these skills would be crucial going forward as the industry comes out of the current crisis and emerges into a post-Covid-19 world that will be a lot different from where we have previously been and is likely to remain so for a number of years, Read said.

FIDIC board member Liu Luobing talked about the collaborative approach being adopted on contracts in China, which he said was a much more efficient approach whether working on private or public sector projects. Handling crisis events was always going to be made easier with increased collaboration between project parties, he said. Liu also highlighted the important role of FIDIC’s advocacy during the current crisis. It was important that all stakeholders received consistent and regular communications to inform and update on the latest measures being taken by FIDIC to assist the industry during a challenging period, he said.

Pierre Verzat made the point that everyone was “in the same mess” as a result of Covid-19 and therefore parties will be forced to work together because it is the only way to come out of the crisis in a sustainable position, both for the planet and for the industry itself. Leadership was crucial currently and giving good direction to find a solution, Verzat said. The engineer is seen as a “third party of confidence” who more than ever before will be playing a vital role, he said.

A wide range of issues and questions were sent in by participants to inform the discussion, which in truth could have gone on well beyond the 90 minutes allocated for the webinar. These included the availability of engineers as a result of illness or health and safety issues, the different clauses that were relevant in FIDIC contracts in the context of the Covid-19 challenges, the key role of the engineer in the current crisis, leadership, insurance challenges, avoiding claims and cash flow issues.

All the speakers were clear that a collaborative approach was the way forward and that an over-reliance on contract provisions was not necessarily to the benefit of parties during the current crisis. More discussion and dialogue and a holistic view was the clear message of speakers to the 900+ participants in the webinar.

Summing up the webinar, FIDIC president Bill Howard also underlined the need for more collaboration and effective dialogue during the current crisis. He spoke up for the key role of the professional engineer and the honest and independent role that they play, a role which is more important in the current climate than it has perhaps ever been.

The next FIDIC webinar, entitled Covid-19: Insurance coverage, what security it provides for liability, business interruption and other issues, takes place on Tuesday 21 April at 12 noon CET. We expect a high number of registrations for this topical event so please sign up as soon as possible.

Click here to book your place on the event on insurance coverage.

Please click below to view a recording of the webinar.

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