What if a client has a unified agreement for both service provision methods?

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daniel
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Joined: Wed May 28, 2025 6:57 pm

What if a client has a unified agreement for both service provision methods?

Post by daniel »

If a client insists on using their own bespoke agreement that they claim unifies the provision of both consultancy and manual labour, you are operating outside of the standard, tested NEC4 framework.

In this scenario, the client's agreement becomes the governing document, and the recruitment agency must approach it with caution and a thorough understanding of the risks.

Here is how to approach that situation:

1. Legal and Commercial Review is Essential
Do not sign the client's bespoke agreement without a full review by your own legal and commercial teams. A unified contract can obscure critical differences in liability.

2. Key Areas to Scrutinize in Their Agreement

Your review needs to focus on how the client's agreement addresses the inherent differences between the two types of services:
Standard of Care/Liability:

Professional Services: Liability is usually based on a "duty of skill and care" (acting reasonably competent).

Manual Labour/Works: Liability is typically "fitness for purpose" or ensuring the finished work meets specified results (a much stricter standard). The bespoke contract must clearly define which standard applies to which part of the service provision.

Payment Mechanisms:
Does the contract allow for specific like the TICI "Pink Book" or "Blue Book" rates to be used transparently for the labour component?
Does the contract clearly define what costs are recoverable for the consultancy element?

Supervision and Control:
Does the agreement clearly delineate when your personnel are acting as autonomous consultants versus when they are under the direct supervision and control of the client's site managers? This has significant implications for health and safety liability and employment law status.

Insurance Requirements:
The agreement must mandate appropriate Professional Indemnity (PI) insurance for the consultancy work and Public Liability (PL) insurance/Employers' Liability (EL) insurance for the manual work. The limits and excesses must be adequate for both high-risk activities.

Dispute Resolution:
Does the agreement reference standard UK construction dispute resolution methods like adjudication?

3. Negotiate Amendments
If the review finds the client's agreement is ambiguous or places disproportionate risk on the agency, you must negotiate amendments (similar to NEC4's Z clauses) to clarify the roles, responsibilities, and liabilities for each type of service provided.

Ultimately, while the client has the right to use their own paperwork, the burden is on the recruitment agency to ensure this non-standard document is legally sound and commercially viable before committing.
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