LINKED CONTRACTS AND THE BUILDING INDUSTRY (and the Evolution of the profession of architect in Belgium) Prof. Dr. Benoît Kohl Professor (University of Liège) Invited Professor (University of Paris II) Attorney (Stibbe Brussels)

Introduction

 Evolution of the organisation of the building project (generally imported from abroad) Classical triangle Contract for the « promotion » of works (private/public works) Design and Build (and/or DBFM). Widely used in PPP projects Alliancing / Bouwteam

Introduction The profession of architect is highly regulated in Belgium, with a.o. a wide monopoly. Question : Do these regulations have an influence on the validity of the (kind of) contractual organisation of the building project ?

Summary  The regulation of the profession of architect in Belgium : Bird’s eye view Focus : influence of the rule of incompatibility/independance on the validity of the linked contracts  Is the regulation still accurate ?

I. Regulation of the profession of architect in Belgium

I. Regulation of the profession A. Bird’s Eye View

Regulation : Bird’s eye view  History The guilds : architects carried out all the activities from conception to finish 19th century : creation of various professional societies of architects Architect Act of 20 February 1939 : first legal recognition of the architect’s profession:  Architectural education re-installed  Set up of the diploma of architect  Protection of the title of architect  Combination architect-contractor prohibited  Monopoly

Regulation : Bird’s eye view  History 1963: Set up of the (at this time) national Architect Order 2006 : Law permitting the practice of the profession through a company with limited liability

Regulation : Bird’s eye view  The Architect regulation : deontological rules Forms and modalities of practising the profession Incompatibilities Insurance Relations with the principal, with technical advisors, with colleagues, with the Order Intellectual rights etc

Regulation : Bird’s eye view  Evolution of the architect profession Architect’s role :  Simplicity of the buildings disappeared completely New (engineering) techniques and materials Computerisation (ex : domotica …)  More specialised knowledge requested  Often, the contractor is more specialised than the architect  Case law acknowledges this situation Principle of the Mutual supervision Authorization for architects to delegate the design activities (Supreme Court 03/03/1978) Authorization for architects to delegate the control activities (Supreme Court 13/03/2008)  Legal rules in relation with construction projects also more complex

I. Regulation of the profession B. Influence of the rule of independance/incompatibi lity on the validity of linked contracts

Regulation and linked contracts  Incompatibility v. Independance : the current situation Incompatibility : art. 6 of the 1939 Act : « the exercice of the profession of architect is incompatible with the profession of building contractor for private or public works » Strict construction (interpretation) of article 6 (limit to the freedom of industry) ; see Supreme Court 18/12/1967 and 17/02/1969. Ex :  Participation of the architect to the construction of building materials/building systems  Participation of the architect to a « société de services immobiliers » (with limitations to the architect’s activities in that case).

Regulation and linked contracts  Incompatibility v. Independance Independance : art. 4 of the Code of Deontology Ratio legis, even if not mentioned as such in the 1939 Act Violation of the duty of independance does not necessary mean a violation of the duty of incompatibility. Violation of the duty of independance : a matter of fact. Ex :  Signature of the building contract before the contract with the architect, without contact between client and architect  (Almost) no minutes of meetings during the construction  Architect asks the building contractor to provide for the design of the entire construction works  …

Regulation and linked contracts  Incompatibility/Independance and linked contracts  Architect contract is voidable when violation of the rule of incompatibility See for instance Gent, 20/10/2006 (the client gave a mandate to the architect to choose and to contract with the building contractors. All payments to be made to the architect).  Architect contract is voidable when violation of the rule of independance See examples supra

Regulation and linked contracts  Incompatibility/Independance and linked contracts  Does the incompatibility/Independance rule have an influence on the validity of the linked contract, ie the building contract ?  … Yes / See: Charleroi, 08/04/1982 : Architect chosen by the builder + no control of the works : « l’infraction commise entraîne la nullité du contrat tout entier parce que la clause relative au paiement des honoraires de l’architecte et par voie de conséquence son choix par l’entrepreneur est indivisiblement liée aux autres dispositions conventionnelles » Brussels 11/12/1984 : « La nullité de la clause (ayant pour effet de porter atteinte à l’indépendance) entraîne celle du contrat d’entreprise lui-même lorsque la violation de l’article 4 a eu une incidence préjudiciable sur l’exécution du contrat »

Regulation and linked contracts  Incompatibility/Independance and linked contracts  … Yes / See: Nivelles, 09/11/1990 Mons 25/06/1991 Neufchateau, 02/12/1992 : « La nullité peut s’étendre aux conventions passées entre parties destinées à parfaire l’opération et qui, partant, n’étaient que la suite logique et nécessaire de la première ». Nivelles, 18/07/1994 : « La convention par laquelle l’entrepreneur se chargeait de choisir un architecte ayant pour seule mission de tracer les plans est contraire à l’ordre public et doit être annulée d’office ». Nivelles 08/05/2001 : « La nullité du contrat d’architecture pour défaut d’indépendance de l’architecte doit emporter le prononcé de la nullité des conventions intervenues entre le maître de l’ouvrage et l’entrepreneur »

Regulation and linked contracts  Incompatibility/Independance and linked contracts  Legal ground for nullity of the linked contract between client and building contractor: the public order nature of the independance/incompatibility rule.  Problem : stricto sensu, the « independance » rule is not mentioned in the 1939 Act. Question : Can a rule contained in the Code of deontology be used by the client to obtain the nullity of the contract to which the architect is not a party ?  Note however that the Code of deontology has been endorsed by a Royal Decree.  In any case, the independance of the architect could be considered as part of the « virtual public order » (v. « textual public order ») (see. P. Wery Obligations, 2010, p. 280)

Regulation and linked contracts  Incompatibility/Independance and linked contracts  Question : Would the answer be the same in situations when the deontological rules are not endorsed by a Decree  Exemple : The deontological code of the engineers (ORI) : article 3 « Le membre jouit d’une totale indépendance dans l’exercice de sa profession. Il évite tout ce qui peut nuire à l’indépendance de ses avis.Le membre informera le donneur d’ordre dès l’apparition d’une éventuelle confusion d’intérêts qui autoriserait son donneur d’ordre à douter de son impartialité professionnelle ».  Liability of the engineer ?  Does not have per se an influence on the validity of the contract with the building contractor.

II. Is the regulation still accurate ?

Is the regulation still accurate ?  Evolution of the architect profession Modification of the Architect’s role :  Development of the building promotion He designs, draws the program and the budget and acts as the principal. Afterward, he sells (or lets) the building to 1/3 parties who were left outside his relation with the architect and building contractors) Independance/Incompatibility ? 1. No problem in the case of a « promotion-vente » (even if the promoter undertakes some of the building works). 2. Situation when promotor is also a builder (turnkey contractors) ? Is there really a problem if the promotor- builder signs the architect contract ?  Case law : yes, problem  Perhaps necessary to reconsider this question (What’s the difference, on the facts, between 1 & 2 ?)

Is the regulation still accurate ?  Evolution of the architect profession Modification of the Architect’s role :  Development of the links with other professionals : the architect is only a member of a larger group. Some others (contractors, …) have no deontological code. Hence, does the regulation of the only architect profession offer full protection to the client ?  Relation with the consulting engineer. Engineer does not have any monopoly. Many plans are prepared by engineers and « endorsed » by architect, without enough technical knowledge Architect’s monopoly has been abolished in Flanders for civil engineering works  Internationally recognised contractual forms (Bouwteam,…): The building contractor becomes member of the design team Accuracy of the monopoly and the incompatibility rule

Is the regulation still accurate ?  Evolution of the architect profession Way forward : some ideas  Tendency towards a deregulation (EU influence) and a limitation of the monopolies  Questioning the architect’s monopoly Role and tasks of the architect have been strongly changed since 1939 : architect do not dominate the full conception or control Other professionals are required for the design Development of a system of (public?) control of the construction works (linked with an insurance/guarantee ?) better than a monopoly Aim : enables the free development of new forms of organisation in the building industry

Prof. Dr. Benoît Kohl University of Liège and Paris II Stibbe Brussels