FIDIC has made a number of changes to Clause 8 (start and end). The subcontractor is now obliged to carry out the subcontracting work with “Due Expedition” and not with “Due Diligence” – a change that means nothing else in English law. The most significant change, however, is the removal (from subsection 8.1) of the additional requirement in the test edition to proceed “immediately in accordance with the current outsourcing program.” This is a welcome change for subcontractors and not entirely surprising. Contractors generally resist any explicit obligation to comply with the program – on the grounds that it is a living, iterative document and that they already have a strict obligation to meet certain deadlines (“completion deadlines”). In total, there are changes to about 17 articles. As you might expect, some are just simple typos and punctuation fixes, but others affect the overall risk profile of the new subcontract. The general philosophy of the Test Edition was “the transmission of risk”. While this is still largely true for the first edition, there has been a slight relaxation of the strict “back-to-back” approach in some areas. For example, a change in sub-clause 12.3 (evaluation of subcontracting) means that the application of new tariffs under the subcontract is no longer subject to their application under the main contract.
The Test Edition had held the subcontractor liable for “any cause that was the responsibility of the subcontractor”. FIDIC removed this additional qualification in the first edition, acknowledging that it would be difficult for a contractor to prove in practice that the damage to the factories was caused by something “for which the subcontractor is responsible”. Now that the subcontractor has overall responsibility for the maintenance of the work, the standard position is that he is responsible. The subcontractor would have to prove that the cause of the damage is something for which it is expressly not liable. In any event, the end of clause 17.1 contains a number of sub-clauses setting out the circumstances in which the subcontractor is actually liable for the costs of rectification. FIDIC added two members to do this: So, in the end, FIDIC clearly made significant changes from the Test Edition to the First Edition – some in favor of the contractor, others in favor of the subcontractor – but overall, there is a slight weakening of the strict transmission approach that characterized the Test Edition. There are also a few signs indicating possible changes to the Yellow Book – an overview in December. Look at this room. However, the question remains how this second change will be interpreted in practice.
Does this mean that the subcontractor will be able to use objections that would otherwise be available to the contractor under the main contract (whether or not the prime contractor wishes to pursue them)? Here, FIDIC has taken a reasonable pragmatic approach and realized that it is easier (in practice) to get the subcontractor to actually repair the loss or damage (since he is responsible for the work at this stage) and then treat separately the reimbursement of the costs of this repair. This appears to have limited the scope of the grounds for extension to which the subcontractor is entitled under the main contract, since they are now limited to the grounds for extension expressly set out in clause 8.4 of the main contract and not to a right to an extension of time that may result from a clause in such a contract. However, the subcontractor is still entitled to rely on paragraph 2.4, according to which it is entitled to “similar benefits, etc.”, which the contractor has under the main contract, so it is not entirely clear what this amendment is intended to achieve. While we cannot give legal advice on these pages, I understand that the subcontract can be used in this situation, although (as always) each party must ensure that the standard form they propose to use matches all the circumstances (legal and factual) of the project. .