MDA Construction Attorneys director Euan Massey believes that it has become standard practice for consulting engineers to deliver the requirements outlined in mining contract tenders. However, this is more likely to result in disputes later.
“Consulting engineers bring valuable technical understanding to the process of drawing up the contract, but without specialised legal expertise, often their well-intentioned amendments to standard form contracts don’t align with the original aim,” explained Massey.
There is a reluctance to engage specialist attorneys before the enquiry is issued on account of cost and time concerns. But disputes and delays are more likely to arise when a contract is not correctly drafted, and this can be avoided if lawyers are engaged early enough in the process to identify the risks and introduce appropriate wording.
There have been many examples of contracts which have not adequately addressed the risks presented to mining houses, contract miners and contractors during the Covid-19 lockdown last year. The clauses which have attracted particular attention are those dealing with Force Majeure and termination for convenience – previously these clauses were considered as “boiler plate” however there is now a necessity to ensure that specific risks are adequately dealt with.
Specialist attorneys have experience spanning all the stages of a mining project. “Attorneys who have been involved on-site, understand the technical aspects of mining projects and assisted clients to ensure they comply with the contract can very quickly identify potential problem areas. Unlike generalists, specialist attorneys can quickly and fully grasp the risks and the nature of disputes, which are usually highly technical in mining and construction,” he said.
Amendments to standard form contracts can give rise to different interpretations. Levels of dispute range from simple cost claims to full disputes that go to arbitration or litigation.
“Engineers usually have incredibly good input and ideas, but it is crucial to carefully consider the terms and conditions of contracts before decisions are taken that could possibly result in financial loss. Specialised attorneys fill gaps which engineers simply cannot,” Massey concluded.