CCDC 31 (2020): A new consultant contract
The Canadian Construction Documents Committee has published a new standard form document – the CCDC 31 (2020) (CCDC 31). This new document governs the relationship between Owner and Consultant. It was adapted from the ACEC 31 (an engineering agreement published by the Association of Consulting Engineering Companies).
The CCDC 31 has a typical CCDC format and includes the following:
- Agreement between Owner and Consultant;
- General Conditions; and
- Schedules – Scope of Professional Services, Reimbursable Expenses and Rates.
It is in line with the existing CCDC principles and terminology and consistent with the new CCDC 2 (2020) (a stipulated price contract between an Owner and a Contractor). For instance, the CCDC 31 includes the Ready-for-Takeover concept introduced by the CCDC 2 (2020), as discussed in our previous post.
In this article, we highlight four key provisions in the CCDC 31 and use terms from this document.
1. Intellectual Property Rights
The Instruments of Service (e.g., drawings, specifications and other deliverables under the Contract) are the property of the Consultant. The Consultant reserves the copyright to such Instruments of Service, however, the Owner will have a non-exclusive license to use any proprietary Instruments of Service that relate to or result from the Professional Services solely for the purpose of constructing, using, maintaining, altering and adding to the Project, provided the Consultant’s fees and Reimbursable Expenses have been paid. If the Owner wishes to use the Instruments of Service other than in connection with the Project, it must notify and seek prior written consent of the Consultant. The Owner indemnifies the Consultant for any improper use or alteration of the Instruments of Service.
The Consultant is required to carry professional liability insurance of at least two million dollars per claim. It must be maintained from the commencement of the Professional Services until two years after completion. The Consultant must also require all of its Subconsultants to carry similar professional liability insurance. In addition, the Consultant must carry Commercial General Liability Insurance, Automobile Liability Insurance and, as applicable, Aircraft and Watercraft Liability Insurance.
3. Limitation of Liability
The Consultant’s liability for claims is limited:
- to claims made in writing within a period of six years after the completion of Professional Services or such shorter period prescribed by law;
- for losses covered by insurance, to the insurance proceeds recovered from insurance policies required by the Contract or that would have been recovered but for the Consultant’s failure to maintain such insurance, but, in no event, exceeding the minimum insurance limits in the Contract; and
- for losses of the type for which insurance is not required, to the greater of $250,000 or the total amount of the Consultant’s fee and reimbursable expenses.
The limitation of liability also applies to the Consultant’s employees and Subconsultants and applies whether the claims arise in contract, negligence or other theory of liability. However, the limitation of liability provision does not apply to third party claims for bodily injury, sickness, disease (including death) or destruction of tangible property.
4. Scope of Professional Services
Schedule A sets out Professional Services for each of the following categories: Advisory Services, Project Initiation Services, Conceptual Design and Review Services, Preliminary Design and Review Services, Detailed Design and Review Services, Construction Administration Professional Services, On-Site Professional Services and Post Construction Professional Services. The tasks for each category are set out in a table. If a task forms part of the Professional Services under the Contract, then a check mark will be added beside that task. Owners using the CCDC 31 should give careful consideration to the adequacy of the coverage of the professional liability insurance (discussed above) in the context of the type of Consultant and the Professional Services being rendered. The parties must also add a check mark to confirm the fee payable to the Consultant for the performance of that task (e.g., fixed fee, percentage fee, time-based rates or other). It is important to note that within the CCDC 31 itself, it is expressly stated that the CCDC 31 is not intended to be used as a contract for Architectural Services.
It is common practice for stakeholders to use “supplementary conditions” to modify CCDC documents to address the circumstances of the Project and expectations of the parties. Modifications to the CCDC 31 could include, for example, aligning the intellectual property rights with the needs of the Owner and confirming the insurance package and limitations of liability are in keeping with the risk profile for the Project and the Professional Services under the Contract. Osler’s breadth and depth of experience and expertise with standard form documents published by industry and professional organizations, such as the CCDC, ACEC, Professional Engineers Ontario and the Ontario Association of Architects, will be of great value for those seeking to understand the risk allocation in the CCDC 31.