Implications for designers (Part 1 of 2).
This is part 1 of a 2-part series about the developing issues in access to design data concerning digital collaborative working environments, particularly BIM. Part 1 discusses the background and BIM development in the UK and the first reported formal dispute involving BIM in the UK, Trant Engineering Limited v Mott MacDonald Ltd [2017] EHWC 2061 (TCC). Part 2 will deal with the lessons learned about Trant v Mott MacDonald [2017] and the implications and applications for Designers.
Introduction
In recent years, the UK Government has pushed for Building Information Modelling (BIM):
“BIM is a process for creating and managing information on a construction project across the project lifecycle” (National Building Specification).
BIM creates a data model that contains information assembled and updated collaboratively to enable end-users to optimize their actions and get greater whole-life value for their asset. The product of the BIM process is a departure from that generated by earlier Computer-Aided Design (CAD) software that uses standalone two-dimensional drawings produced independently by each building professional and/or designer. BIM is used in place of traditional 2D CAD drawings at the design stage and throughout the building lifecycle.
Rapid and frequent changes in standards applied to BIM took place, making it fertile ground for legal disputes. In July 2017, the UK reported its first formal dispute involving BIM. In Trant Engineering Limited v Mott MacDonald Ltd [2017] EHWC 2061 (TCC), the claimant applied for an interim injunction until trial (or further order), requiring the defendant to provide access to design data the claimant had prepared. The case raised issues about the obligations of the party who has control over the access to design data prepared by the rest of the team and the realities (and complexities) of the inter-party nature of the use of BIM.
BIM Development (UK)
In support of the design profession and the construction industry’s increasing use (and limited formal adoption) of BIM, the Construction Industry Council (“CIC”) published the first edition of its CIC-BIM Protocol (“CIC/BIM Pro”) in 2013. This protocol was issued with the intention to be utilized on all UK construction contracts using BIM (CIC 2013 iv). The development of the protocol was a response to the publication of the UK Government Construction Strategy in 2011, which aimed to reduce the costs of construction projects by up to 20% (United Kingdom, Cabinet Office 3). In 2013, the UK Government also mandated using BIM for all centrally procured Government contracts from 2016. This forms part of the UK’s Construction 2025 Strategy (CIC 2013). One of the goals stated in that strategy was a reduction of the initial construction costs and the whole life cost of built assets by 33%.
Also, in 2013, PAS 1192-2:2013 came into effect, which is the “specification for information management for the capital/delivery phase of construction projects using building information modelling” (British Standard Institution).
The Second Edition of the CIC/BIM Pro was published in 2018 to reflect the ongoing technical and practical development in BIM adoption and use. This updated edition was intended to align closely with PAS 1192-2:2013, the updated UK standard (CIC 2018 4). That same year, ISO 19650 was published, creating an international standard for managing information over the whole life cycle of a built asset using BIM. The UK implemented this standard in 2019 through its BS EN 19650 series, the “Organization, and digitization of information about buildings and civil engineering works, including building information modelling — Information management using building information modelling.”
BS EN ISO 19650-1:2018 sets out the concepts and principles for information management, defining a common modelling environment or a “Common Data Environment” (CDE), which allows information to be shared between all project team members. A CDE is an “agreed source of information for any given project or asset, for collecting, managing and disseminating each information container through a managed process” (BS EN ISO 19650-1:2018). Besides defining CDE, the standard also addresses the topic of workflow, thereby providing guidance that may help mitigate disputes related to a CDE.
In May 2020, to bridge the gap of an Information Protocol to support contracts that use ISO 19650, the UK BIM Framework (in association with the CIC) published the “Information protocol to support BS EN ISO 19650-2 the delivery phase of assets” (UK BIM Framework 2020).
The Issue in the TEL/MML Case
Facts
Trant Engineering Limited (TEL) was employed by the Ministry of Defence (MoD) to design and construct a £55 million Mid-Atlantic Power Station Project at the Royal Air Force Mount Pleasant Complex in the Falkland Islands. TEL then engaged Mott MacDonald Ltd (MML) “to provide design consultancy services” (TEL v MML, 2018 par. 4), which included “preliminary design, detailed design, design co-ordination, preparation and implementation of BIM and procurement support, principal designer responsibilities and development of the DREAM assessment (an environment assessment throughout the design stage)….” (TEL v MML, 2018 par. 4).
In implementing BIM, MML intended to use a project collaboration software called ProjectWise, which created a CDE to enable “the design teams to manage, share and distribute design data on a single platform” (TEL v MML, 2018 par. 5). A draft consultancy agreement (DCA) was sent by MML to TEL and incorporated MML’s standard terms and conditions. The DCA included a clause on the limitation of liability and provisions for payment, following provisions in the Construction Act, also known as the Housing Grants, Construction and Regeneration Act 1996, for interim payments and “contained a provision that the contractor … could suspend works in the event of any failure on the part of the client” (TEL v MML, 2018 par. 9).
The DCA provision addressing the intellectual property stated:
“Upon full payment of the fees due under the consultancy agreement, the consultant shall grant to the client an irrevocable royalty-free non-exclusive licence to use all rights, titles, and interest in any such intellectual property in connection with the construction, completion, maintenance, re-instatement, repair, promotion and/or advertisement whether by the client or by a third party authorised by the client of the project.” (TEL v MML, 2018 par. 9)
TEL received the DCA contract documents but failed to respond. Subsequently, MML claimed no contract had been entered into since TEL’s outstanding invoices remained unpaid. MML subsequently suspended all design efforts and blocked TEL’s access to the design data in the CDE that MML had provided up to that point. TEL applied for an interim injunction for MML to release the design data.
Judgment
The court applied the three-stage test in American Cyanamid Co (No 1) v Ethicon Ltd & Ethicon [1975] UKHL AC 396 and found that the claim satisfied the tests:
(1) Was there a serious question to be tried?
Both parties were clearly in dispute regarding the services to be provided by MML, its value, and entitlement for payment, whether a contract existed if either TEL and MML was in breach of any such contract, and, if so, what were “the implications…on any entitlement to retain access to and/or use of any design data” (TEL v MML, 2018 par. 24).
(2) Adequacy of the damages
MML argued that damages would be an adequate remedy for TEL since monetary damages could compensate for a delay to the project because of the inability to use the design data that was held on its platform ProjectWise. MML invoked its copyright and intellectual property rights in respect of the design data (TEL v MML, 2018 par. 13). TEL responded by arguing that the award of monetary damages would likely be wholly insufficient if the injunction was not granted, as the losses resulting from a year’s delay would very probably exceed the DCA’s provision setting the limitation of liability at £1 million. TEL cited AB v CD [2014] EWCA Civ 229 and Bath v Mowlem [2004] EWCA Civ 115, stating:
“The primary obligation of a party is to perform a contract. The requirement to pay damages in the event of a breach is a secondary obligation, and an agreement to restrict the recoverability of damages in the event of a breach cannot be treated as an agreement to excuse performance of that primary obligation …
The rule, if rule is the right word, that an injunction should not be granted when damages would be an adequate remedy should be applied in a way which reflects the substantial justice of the situation: that is, after all, the basis of the jurisdiction under section 37.” (TEL v MML, 2018 par. 29) [emphasis added]
The court found that damages would not be an adequate remedy for TEL nor MML since the likely losses on the project would exceed the limit on damages recoverable from MML. Conversely, MML would suffer a loss of bargaining position. If there was a finding that no contract existed, MML might be entitled to more by way of restitution than if the design services that led to the creation of the BIM model were provided under the DCA. In sum, the court found that the financial damages the parties may experience in the face of such a delay would be less difficult to identify and value.
(3) Balance of convenience
TEL argued that without restoring access to the design data, the project could not move forward, the project would require a virtual restart, and a year’s progress would be lost. TEL also argued that the court should allow TEL access to the design data since MML had already performed the design services that led to the creation of the data and would allow TEL to advance the project. TEL further contended that there would be “very little” harm to MML if the court required MML to provide access to design data that it had already produced, particularly when TEL had undertaken to pay for the outstanding fees or damages. The court found that the balance of convenience was with TEL and granted the injunction.
A subsequent case was heard in March 2021 involving the same parties, TEL and MML (and RAF Mount Pleasant), arising from a Settlement and Services Agreement (SSA) the parties entered into on 20 November 2017 (MML v TEL, 2021). MML and TEL entered into the SSA to resolve the existing primary dispute and govern the parties’ future actions. The 2021 case focused on the exclusion and limitation clauses in the SSA that MML had against TEL in the event of a breach of the SSA. The judge concluded that when properly construed, the exclusion and limitation clauses in question applied to any breach by the Claimant of the SSA. That meant that MML’s liability was limited to the terms of the liability cap despite TEL’s claims that the losses resulting from MML’s breach were considerably more (MML v TEL, 2021, par. 87).■
References
A related article was published in RICS Construction Journal (September 2022) under the title When Data Sharing Arrangements Break Down.
American Cyanamid Co (No 1) v Ethicon Ltd & Ethicon [1975] UKHL AC 396
Bath v Mowlem [2004] EWCA Civ 115
British Standard Institution (BSI), PAS 1192-2:2013 Specification for information management for the capital/delivery phase of construction projects using building information modelling (BSI, 2013).
Construction Industry Council (CIC), Building Information Model (BIM) Protocol – Standard Protocol for use in projects using Building Information Models 1st edition 2013 accessed 19 January 2018.
Construction Industry Council (CIC), Building Information Model (BIM) Protocol – Standard Protocol for use in projects using Building Information Models 2nd edition 2018 (CIC 2018).
Construction 2025 (2013) accessed 18 January 2018.
Government Construction Strategy (2011) accessed 19 January 2018.
Housing Grants, Construction and Regeneration Act 1996
Mott Macdonald Ltd v Trant Engineering Ltd [2021] EWHC 754 (TCC)
National Building Specification (NBS), What is Building Information Modelling (BIM)? accessed 19 January 2018.
Trant Engineering Limited v Mott MacDonald Ltd [2017] EHWC 2061 (TCC)