NEC3 Professional Services Contract - Provision of Resource

NEC3 and NEC4 Contracts Risk and Insurance
1

Hi,

I am currently in the process of placing several NEC3 Professional Service contracts on various design sub-consultants, which are for the provision of their resource only (no scope is specified within the contracts). I have the following queries, if anyone could please help out:-

Contract Execution- what would be the determining factor on executing the contract ‘underhand’ or as a ‘deed’. The way I see it, is that as the contract would be for the provision of resource only, there would be no design liability on the sub-consultants, as the design would all be checked and approved by us.

Defects Liability Period- would there still be need for a 52 weeks defects liability period (the main contract is 104 weeks), or should this be back-to-back with the main contract.

Insurances- should the subcontractors Professional Indemnity, Public Liability and Employers Liability Insurance be as per the main contract, or just whatever the sub-consultant carried.

Liabilities (X18)- would this usually be limited to the total price of the sub-contract, or again, would this be null and void, given that the consultant will not be taking on any liability.

Any help would be greatly appreciated.

Thanks.

2

Gaz.

To answer your points.

  1. Execution of the Contract. This can be done under hand or as a deed. If executed as a deed then the limitation period for bringing an action is 12 years from the date of breach of the appointment. If it is just a normal contract the period is 6 years.

  2. Defects liability should be back to back with the main contract.

  3. Insurance should be all 3 that you mention. You need to make sure that the levels of insurance are adequate.

  4. Liabilities should probably be linked to the insurances that are held.

Best

Mike

3

Mike,

Thank you for your prompt response on my queries. I am happy with points 1 & 2 however, with regards to liabilities, please could you advise on the following:-

  1. If say the total liability of the consultant is £5m, does this mean that they should have PI insurance in place to this amount as a minimum?

  2. Assuming that we, as the main consultant, are signing off all of the sub-consultants design work and therefore not passing any design liability onto the sub-consultant, should they still have a certain level of insurance cover.

Thanks.

4

  1. Yes

  2. I am not sure what you mean signing of the design work. If you are engaging the designers and they get the design wrong you would want to be able to claim against them for their breaches of their appointment ; so I would advise against waiving any claim you could make against them.

Happy to look at specifics if you need me to.

Regards

5

Thanks Mike.

With regards to design liability, we are essentially hiring in design resources and instructing them what to do, so there is no specific scope of work for them to complete, and everything will be reviewed and approved by ourselves.

I guess they will need a certain level of PI, but maybe not the amount that we carry.

Thanks.