Consulting engineers have valuable technical understanding but often lack the legal expertise to ensure that their intentions are well articulated and that the contract is balanced. The resulting gap requires legal experts to ensure that the contract is correctly drafted to protect the parties from disputes.
Construction and technology law specialists MDA Attorneys provide legal services for various industries, including mining.
“Traditionally, consulting engineers are engaged by the mining house to provide the design and feasibility work needed before the engineering, procurement and construction management contract is awarded. “They generally oversee the drawing up of the contract, as well as the bills of quantities, among others,” says MDA Attorneys director Euan Massey.
He notes that it has become practice for consulting engineers to draw up the terms and conditions as part of the services they provide as a professional team.
However, extensive legal knowledge is needed to ensure the contract is well drafted.
“Although they are experienced, and often have very good ideas and invaluable knowledge, the way it is articulated in the contract does not always reflect the intention that they want to create,” explains MDA Attorneys director Odette Potgieter.
She cites the recent example of mining houses terminating their contracts with contract miners during the Covid-19 lockdown last year. The mining houses did not properly consider the terms and conditions of the contracts, which resulted in payouts, with the contracting parties not recovering enough money to cover their costs.
MDA frequently assists with similar issues and disputes that arise from parties not properly considering the terms and conditions of contracts before they make decisions that result in financial loss.
Massey explains that companies or contractors often fear that consulting a lawyer will be costly, but additional costs can be avoided if lawyers are engaged at the appropriate time.
“If we engage early on in the process, then the consulting engineers can continue to do what they do best, and we would be able to identify the risks that need to be addressed in the contract,” says Massey.
Potgieter advises that attorneys be involved from the inception of the project, before it goes out to tender.
Consulting engineers can present the clauses they need, and qualified lawyers can draft such clauses, as well as moderate and amend the entirety of the contract to ensure it is well drafted. This process can reduce costs.
In addition to producing well drafted contracts that tie up with the requirements identified by consulting engineers, Massey emphasises that it is important to have attorneys who specialise in the fields for which they are drafting the contract.
“When people use attorneys who are not specialists, the attorneys cannot grasp the nature of the contract or dispute. “The disputes in mining and construction are all highly technical and require an understanding of the contractual and technical aspects,” explains Massey.
Attorneys who are trained in and have experience regarding the technical aspects of the industry can assist with mining contracts and disputes through their understanding of the processes involved, without having to learn concepts that are fairly basic to consulting engineers. This also assists to lower legal costs and reduce delays.
“You’ll never be able to avoid claims or disputes in construction contracts, but if a contract is drafted properly, the chances of resolving them are much better than using a contract with certain terms that are not suitable or unenforceable,” Potgieter concludes.