Building a Better Way to Do Deals; JOHN McEACHRAN Reports on an Attempt by a Construction Group to Streamline Costly Contracts

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Byline: JOHN McEACHRAN

A NEW bid to simplify building contracts and cut hefty legal costs of resolving disputes has been launched by Scottish Building.

Chief executive Sid Patten called for an end to the old Scots practice of deals having their own contract - or being done on a handshake - with new standard contracts being brought in for the industry.

The head of Scottish Building, the principal employers' federation for the construction industry in Scotland, added: 'The time has undoubtedly come for this industry, in conjunction with its clients, to take a grip of the spiralling costs associated with legal intervention.

'If the existing standard contracts are not to be acknowledged by the legal profession, then we must find a way to provide conditions of contract which provide comfort to the client, an acceptable and understandable level of risk to the contractor and fairness throughout the contractual chain.'

The benefits of this, he says, will include contractors being able to improve the pitiful margins which still exist in the industry and reduce costs to the client.

He also pointed out that 40 years of trying to set up a set of standard contracts for the building industry had so far failed to stop the spiralling legal costs of disputes.

Mr Patten added: 'Despite there being a multitude of standard contracts out there to fit almost every eventuality, firms throughout Scotland report that the majority of these documents hit their desk seriously amended and subject to considerable interpretation.

'From a survey which we carried out two years ago, it was established that 93 per cent of all contracts received by its member companies were either the subject of significant alteration or were received in bespoke format, totally ignoring the existing documentation. …