21 Feb 2017

The Institution of Chemical Engineers (IChemE) launched its “Silver Book” at Keating Chambers on Thursday 9th February 2017. This is the first completely new edition to the IChemE suite since 2003. The Silver Book is a “Professional Services” for contract engineering, project management, contract management and other professional services. It fills a key gap in the IChemE’s current range. The availability of a standard form consultants’ appointment contract to sit alongside the Red, Green and Burgundy books is very welcome.

The Silver Book has both a “Long Form” and “Short Form”. The Long Form is intended for use on more complex or higher value projects, whereas the Short Form is for use on less complex and lower value mprojects. In the Short Form the Consultant’s liabilities are more limited and capped at a lower level. The pricing structures in the Short Form are either reimbursable or fixed price, whereas the Long Form is compatible with a range of payment mechanisms.

The Silver Book is written for use in the UK and overseas. It does this by including optional special conditions dealing with the statutory right to adjudicate disputes in relation to construction contracts in the UK. The payment provisions are drafted in a way that complies with UK law in relation to payment under construction contracts. This may make these provisions seem complicated to international users. Users of the Silver Book will need to bear in mind that some UK law that is usually addressed in a consultant’s appointment, notably the CDM Regulations, is not and will need to be dealt with in the Schedules.

Other IChemE contracts are published in parallel international and UK domestic editions. The IChemE have said they intend to use the Silver Book format for later editions of these contracts.

The long form contract is administered by a ‘Purchaser’s Representative’ who has a similar role to the Project Manager under the Red, Green and Burgundy books. Importantly, the Purchaser’s Representative is required to exercise any discretion that he or she may have in relation to the contract impartially.

Intellectual property provisions have been expanded to distinguish between the purchaser’s intellectual property, the consultant’s intellectual property and new intellectual property developed during the course of providing the services.

The contract vests any new intellectual property with the purchaser, unless otherwise agreed in writing between the parties. The clauses provide a much better basis for allocating the intellectual property involved in a complicated process engineering project than many standard forms, but still requires careful consideration from both purchaser and consultant on each project.

The long and short form contracts contain different dispute resolution provisions. Under the short form disputes are determined by litigation through the courts of the relevant jurisdiction. Under the long form, marbitration is the ultimate means of dispute resolution, although alternative dispute resolution procedures may be used depending on jurisdiction.

The Silver Book is a valuable addition to the host of standard form contracts available in the market. It is much better suited to the appointment of consultants in the process engineering sector and provides a basis for appointing consultants to a project that is consistent with the IChemE construction contracts.