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Journal

Assistance with your legal issues

Fiona Mckay

Any uncertainty when it comes to the law can be a cause for concern.

AIA’s legal Partner Beale & Company can assist in respect of issues arising in connection with your practice by offering you a free legal helpline. Whether it’s a second opinion, an ad hoc piece of advice or clarification on an issue, Beale & Company can provide you with the guidance you need.

They can provide support in relation to:

Appointments and collateral warranties;

  • Assignment and novation
  • Non-payment
  • Disputes
  • Intellectual property rights
  • IT
  • Employment
  • Corporate and commercial matters

The helpline is available not just to individual members of the AIA but to the whole firm where they have individual members.

Beale & Company has a long history of acting for consultants and architects and their lawyers have a deep understanding of the needs and challenges your practices may face with many of them having gained in-house experience in leading construction companies.

To get in touch, call +44 (0) 20 7469 0400 (and quote AIA UK Helpline) or alternatively email: aiauk@beale-law.com

Download our Legal Helpline Flyer to keep to hand should an issue arise and you need a second opinion.

 

The 2016 AIA National Convention

Fiona Mckay

The 2016 AIA National Convention was held in Philadelphia from 18-21 May, convening over 20,000 people from around the world in one of the largest and most exciting annual gatherings of architects and industry leaders. This year's keynote lecturers included Julia Louis-Dreyfus (interviewed by radio host Terry Gross), Neri Oxman (performing revolutionary digital morphogenesis research at MIT) and Rem Koolhaus. The star studded line-up also included Denise Scott Brown receiving the AIA Gold Medal for the duo, as Robert Venturi couldn't make it to Convention.

The AIA UK was well represented at Convention; a few members were even inducted into the Fellowship this year. Lester Korzilius and John McAlsan received the honour of joining the FAIA. UK chapter president Frederick Grier presented a lecture about architects working abroad which drew interest from the many American's considering such a career move in their future. 

After attending three days of lectures, workshops and presentation, the highlight for Fred was a special behind the scenes tour of the Barnes Foundation. This project, completed by Tod Williams and Billie Tsien (AIA UK keynote lecturers last year) is an outstanding example of how architects solve problems and make the world a better place for all. Sustainability, Education, Cultural Enrichment and Access made this a highly difficult and controversial endeavor which was met with grace and beauty from every angle. If you are visiting Philadelphia in the future, please make an effort to see this exceptional museum.  

AIA UK Accreditation to 2019

Fiona Mckay

In 2015, AIA National instituted a new strategy to achieve a consistent level of service for its members across the hundreds of chapters around the world. This 'Core Member Service' plan addresses the strengths and opportunities for each chapter by implementing standard levels of service in various areas including Education, Member Communications, Public Awareness, Governance, and Finance.

In order to assess all AIA chapters and provide them with continued support (through member dues) each chapter submitted records, policies, letters and general evidence of compliance to the high standard set by AIA National. Each chapter was accredited for either a 1-Year or 3-Year term, after which further evidence will need to be compiled and presented to AIA National as continued proof of providing members with a high level of service.

The AIA UK Chapter is pleased to report that it has been approved for 3-Year accreditation, along with roughly half of all other chapters in the world. We are proud to serve our members with a high level of service, and provide valuable opportunities for them to grow just as our own chapter grows. This process has helped initiate new educational and mentoring sessions, which will continue to keep us sharp and looking smart!

Late Payment – Improving an Industry Wide Issue

Fiona Mckay

By Andrew Croft, Associate, Beale & Company Solicitors LLP

It is widely acknowledged that late payment is a key issue across the construction industry. For example, a study by the Asset Based Finance Association (ABFA) found that construction and real estate firms had to wait an average of 107 days to receive payment – a longer wait than in any other industry. In this article the writer looks at the merits of recent steps taken to date to tackle late payment, including existing legislation and proposed legislation, and other steps which have been taken to seek to alleviate late payment. The writer also considers ways this issue may be improved going forward.

Legislation

The Housing Grants, Construction and Regeneration Act 1996, as amended in 2011 by the Local Democracy Economic Development and Construction Act 2009 (“the Act”), has significantly improved the payment landscape in the construction industry. The introduction of adjudication and the requirement for a clear payment process has provided some very useful tools for contractor, consultants and other suppliers (and also for “sophisticated” employers who use adjudication and the payment notices to their advantage). However, there are some “downsides” to the Act, including that:

  • to make use of the Act you need to understand how the complex payment processes work, which is not always the case and the Act can be difficult to apply practically;
  • the Act may assist the payment process in the short term, but short term gains from any “tactical adjudication” could later be overturned if the matter came before a court, so their effectiveness may be limited;
  • whilst some clients respect those who act swiftly following a failure to comply with the Act, a number of suppliers will refuse to take action due to concerns at jeopardising long term relationships; and
  • the Act is being exploited, for example by the inclusion of extremely prescriptive contractual payment provisions which seek to circumvent the Act, for example by requiring significant additional requirements and condition precedents to be complied with before payment will be due.

A review of the Act has been commissioned by Parliament and the industry should hope that some of the above concerns are taken into account.

Further legislation is also in the pipeline in relation to late payment, including a requirement for companies to publish a report on their payment practices and procedures, under the Small Business, Enterprise and Employment Act 2015. Is this really going to assist with later payment? It is already easy to pinpoint the “bad payers” from information available but nevertheless having public reporting enshrined into statute must help. Making this information more freely available may result in a “league table” being produced clearly identifying to the industry those with poor payment records which we would hope will encourage improved payment practices. It was suggested last year that secondary legislation would be introduced in April 2016 to introduce this requirement, but at the time of writing we are unsure if this will be the case.

Another legislative step aimed at bad payment practices is the introduction of a right for industry bodies to challenge unfair payment terms as part of efforts to enact the Late Payment Directive in the UK. This is a good idea in principle but will industry bodies take the risk of incurring initial time and cost in relation to proceedings which their member may decide not to take forward (for example because the member has reached a commercial agreement with their client)? In the writer’s view it is unlikely.

Legislation can certainly help alleviate late payment, as the Act has shown to some extent and it is hoped that further legislative steps will bolster the position. However, the industry should not rely on legislation alone. To take advantage of any legislation, good credit management is essential. In addition, the industry can itself take steps to improve this issue (and is already doing so).

Other steps taken to address late payment

One such step is the use of project bank accounts (“PBAs”). The public sector, in particular, Highways England (which recently announced that it has awarded £10.4bn of work using PBAs) and the Environment Agency, has made good use of PBAs and very positive results have been published on projects in which they are used. This is perhaps a result of the additional certainty and transparency the use of PBAs can provide. PBAs are rarely being used in the private sector and the increased upfront administration could be one explanation for this. Nevertheless, the Government Construction Strategy 2016-2020 proposes the increased the use of PBAs in the public sector and hopefully this will encourage their uptake on appropriate private sector projects.

Another useful tool to help tackle late payment is the use of payment charters. The Prompt Payment Code and the Construction Supply Chain Payment Charter are clearly well intended and set a good benchmark, but have not been used to their full potential to date. For example, there has not been sufficient incentive to become a signatory (there are only 10 signatories of the Construction Supply Chain Payment Charter at the time of writing this article) and few consequences of failing to comply. This has meant their effect has been limited. However, if used properly payment charters can be another helpful tool in tackling late payment. Hopefully the government and the industry as a whole will reconsider the use of charters going forward.

One of the key drivers for the difficulties in recovering payment has to be a lack of transparency. The digitisation of the construction industry provides the industry with an opportunity to address this. The use of digital technology and processes is already changing how services are provided and work carried out, as shown by the significant strides taken in relation to the use of BIM. Whilst the industry is still adapting to the digital change, applying it to the payment process could help reduce late payment. Issuing payment applications or invoices and pay less notices through a digital system could provide additional certainty, with such a system becoming the “one source of truth” as to parties’ payment entitlement. Helping improve this industry wide issue could provide greater incentive to the industry to make use of these new digital tools.

How do we therefore alleviate late payment?

There is no silver bullet to tackle late payment. Nevertheless there have been a lot of positive recent developments.  Legislation, wider use of PBAs and stronger payment charters may assist and perhaps the “digital revolution” provides the industry with a real opportunity. This would be a sensible time to reconsider the payment process and take advantage of these developments to provide additional transparency.

Tackling this industry wide issue will be key to incentivising innovation and helping keep the UK construction industry in a leading position globally - hopefully this opportunity will not be missed.

By Andrew Croft, Associate, Beale & Company Solicitors LLP

First published in Construction Law

Member News: Past Member Awarded OBE for Services to Interior Design

Fiona Mckay

This article has been written as part of the AIA Newsletter’s commitment to up-to- date member news. If you are aware of UK Chapter members’ involvement in other newsworthy projects or events, please bring them to our attention via a “comment” follow up note at the end of this article and we will endeavour to publish further feature articles.

The AIA UK Board of Directors is pleased to report that past AIA UK Chapter member, Diana Yakeley was awarded an OBE – Officer of the Most Excellent Order of the British Empire – in the 2016 Queen’s Birthday Honours List for services to the interior design profession. Although Diana was an actual member of the Chapter only briefly in the past, she has always been a part of our architectural design community and - as wife of Chapter founder member and long serving Board Director, Stephen Yakeley, AIA RIBA - a frequent attendee of our events and gatherings.

Diana served as President of the British Institute of Interior Design (BIID) for two terms, first in 2005 and again in 2011, and is a fellow of the Chartered Society of Designers (FCSD). As well as being a multi-award winning designer, she has also served her profession by a commitment to training and development and by raising practice standards in the industry.

Following the lead of the AIA, Diana was instrumental in introducing the BIID to the concept of student charrettes as a way of promoting team building in design. From 2011 to 2014, she brought several interior teams from UK universities to join architectural teams at the UK Chapter’s Student Charrettes held at the Roca Galleries. Having achieved their own momentum, the interior teams have now gone their separate way, but the overall value of collaborating with interior designers should be a lasting legacy for all the participating student architects.

We warmly congratulate Diana for her many achievements and her richly deserved recognition.

EU Referendum: A letter to our members

Fiona Mckay

Dear Members,

Following the news of the historic referendum, and forthcoming withdrawal of the United Kingdom from the European Union, we must remain patient and hopeful. Brexit will require time before we understand the full effect of the country's decision on our industry. My former boss in Chicago once told me that architects need to be eternal optimists otherwise we feel constant defeat. This may not feel a time for optimism, but at least we can hope.

Undoubtedly our membership is concerned about the impact of the UK's Referendum on EU membership to their practices and personal lives. Many of our members are expats living within the UK, with projects that have teams and supply chains spanning multiple borders. As we have witnessed with previous political changes, the uncertainty itself can cause both clients and practices to adjust their strategies. We must engage this change, and follow the developments as we begin to understand what it will mean for us. The AIA UK will do its best to keep you informed as we ourselves learn how it will unfold.

We look to the political engagement and advice currently offered by our friends at the RIBA. We will do our best to support the political discourse, and encourage you to voice your concerns and express your thoughts. If there is interest, we’ll be happy to host an evening of discussion specifically for this purpose. Brexit will certainly continue to be an important topic of discussion, as it is historic and will have a lasting impact on our future.

Kind Regards,

Frederick Grier, AIA UK President

On behalf of the AIA UK Board of Directors