Role of the Employers Agent
02 October 2017
Posted by: Ernest Roper
In all building and civil engineering contracts there is a provision for the appointment of a person to assume overall responsibility for the management of the project for the client. In each of the recognised contractual agreements a different designation is given to this position of responsibility.
In the JBCC suite of contractual agreements this person of responsibility appointed by the client is called the Principal Agent. The role of the Principal Agent is defined by clauses within the agreement.
Clause 5.1 (Edition 5 July 2007) / Clause 6.1(Edition 6.1 March 2014)
The employer warrants that the principal agent has full authority and obligation to act and bind the employer in terms of this agreement. The principal agent has no authority to amend this agreement
Clause 5.6 (Edition 5 July 2007) / Clause 6.6 (Edition 6.1 March 2014)
The employer shall not interfere with or prevent the principal agent or an agent from exercising fair and reasonable judgement when performing their obligations in terms of this agreement
In the FIDIC suite of contractual agreements this person of responsibility appointed by the client is called the Consultant. The role of the Consultant is defined by clauses within the agreement.
Clause 3.3.2 (b) (Model Services Agreement Client/Consultant Fourth Edition 2006)
If authorised to certify, determine or exercise discretion to do so fairly between the Client and third party not as an arbitrator but as an independent professional exercising his judgement with reasonable skill, care and diligence
The GCC for Construction Works
In the GCC contractual document this person of responsibility appointed by the client is called the Engineer. The role of the Engineer is defined by clause 3 of the agreement.
Clause 3.1.2 (GCC for Construction Works 2nd Edition 2010)
Whenever the Engineer intends, in terms of the Contract, to exercise any discretion or make or issue any ruling, contract interpretation or price determination, he shall first consult with the Contractor and the Employer in an attempt to reach agreement. Failing agreement, the Engineer shall act impartially and make a decision in accordance with the Contract, taking into account all relevant facts and circumstances
In all recognised construction contracts the roll of the client's representative is clearly defined within the contract agreement. In order that the contact is acceptable to all parties the representative should be a professional within the industry, have high morals and not favour one party over another.
The client must remember that he has appointed an agent because he has faith in that person's ability to act within the parameters of the contract agreement. In the MBA Business Bulletin of the 21 May 2004 this relationship is discussed.
The subject of impartiality an article by the British Barrister, Tony Bingham, explores the reasons on why this is essential and backs up his argument with the relevant case law.
Should either party dispute the client's representatives impartiality, the entire contract could be compromised. The judgement in the case of Kane Construction vs Sopov is as follows:
The principal agent fell below the necessary standard of impartiality. The approach was one of avoiding making decisions while endeavouring to keep the contractor in the hope that they would reach agreement. In addition the relationship between client and agent was undesirably close. The performance of the agent was neither competent nor independent and failed to understand the need both to be independent and to be seen to be independent.
As all disputes could end up in adjudication, arbitration or in litigation, it must be remembered that an arbitrator or judge will take a very dim view on any impartiality.
Ross Stembridge | Building Services Manager