HOW CAN THE USE OF " MUTUAL TRUST AND COOPERATION" IN THE NEC 3 SUITE OF CONTRACTS HELP COLLABORATION?
David S Christie
Senior Lecturer in Law, Robert Gordon University, Aberdeen
Abstract: The NEC 3 standard form of construction contract aims to promote collaboration. It hinges on the use of a particular phrase “mutual trust and understanding” which is largely undefined. Linking that to notions of good faith in contract, this paper explores how that meaning might be ascertained.
“Collaboration” has been a hot topic in the construction industry since, at least, the publication of the Latham Report in 1994. 1 It is of growing importance in other fields ranging from the way in which law teachers teach 2 to the maximisation of recovery of oil and gas from the North Sea. 3
From a lawyer’s point of view, one of the key issues around collaboration remains unresolved: what does “collaboration” actually mean 4 and can that meaning be captured in a contract’s terms? Much of the discussion on collaboration focuses on techniques and practices which align parties’ commercial approaches such as partnering and pain/gain share arrangements. Despite this, in the construction industry, parties’ underlying interests will still often push their fundamental objectives in opposite directions: the person paying for the work will want to spend as little as possible and the person being paid for the work will want to make as much money as they can. In UK construction, as indicated by the Latham report, this traditionally led to adversarial and inefficient contract practices.
This paper examines one mechanism in which “collaboration” might be contracted for in circumstances where there is no change to the traditional commercial structure and incentives of the parties but where, despite this, there is an attempt to work in a more collaborative way.
1 Sir Michael Latham, “Constructing the Team: Joint Review of Procurement and Contractual Arrangements in the UK Construction Industry”, HMSO 1994.
2 Association of Law Teachers: 2016 Annual Conference Promoting Collaboration https://www.northumbria.ac.uk/about-us/academic-departments/northumbria-law-school/law-research/promoting-collaboration-2016/ (last accessed 22 March 2017).
3 UKCS Maximising Recovery Review: Final Report (February 2014).
4 It is noteworthy that, in conducting a survey of how collaboration was developing in the offshore oil and gas industry, Deloittes left the meaning of “collaboration” as something for those taking part in the survey to decide – Geoff Gibbons Collaboration, “What do we think it means?”, Energy Voice , 8 March 2016 https://www.energyvoice.com/opinion/103246/103246/ (last accessed 22 March 2017).
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