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Use of project extranets: What are the risks and how can they be mitigated?

March 2021

Documents are the foundation of any construction project with typical large-scale projects involving many gigabytes of documents and drawings.

The increased use of web-based project extranets has unsurprisingly worked wonders in increasing the efficiency of the design phases of construction projects. The digitalisation of document management has enabled drawings, calculations and other design submissions to be reviewed, checked and/or approved by other members of the design team instantaneously.

However, where a document or documents accessible by various members of a design team through the project extranet then become the subject of a dispute, this may present problems for the design team. We are seeing project extranets becoming a theme in the claims we handle.

What are the risks?

The design phase of any construction project is a collaborative process. It will often be necessary for a consultant to review drawings, calculations and other design submissions prepared by other consultants and specialist sub-contractors involved in the project in order for them to carry out their services. Furthermore, modern procurement methods, and increasingly complex construction, has meant that express contractual obligations to review, check or approve the designs of other consultants and specialist sub-contractors to allow coordination of design have become commonplace in appropriate circumstances.

Claims can sometimes be brought against members of the design team regarding defective designs that have been prepared by others. Such claims may be predicated on an alleged failure to review designs, identify errors or omissions in designs and/or warn of defective designs prepared by others.

In circumstances where contractual obligations to review, check or approve designs are not clearly defined from the outset and/or where the systems for reviewing, checking or approving designs are not well-managed, consultants may be exposed.

How can the risks be mitigated?

So what can be done? The best approach is to ensure that there is a clear understanding of the scope of any obligations to review, check or approve designs prepared by others from the outset and that there is a neat system in place to enable you to carry out those obligations properly and trace back any problems that arise.

Clarifying your scope

It is important to ensure that the scope of any contractual obligations to review, check or approve documents prepared by others is agreed at the outset of your appointment. For example:

1. Where you are required to review drawings and calculations prepared by others, it may help to specify in your appointment whether the review will be a detailed line-by-line assessment, or alternatively, an overall review of methodology and approach only; or
2. Where you are required to check drawings and calculations prepared by others, it may help to specify in your appointment what such checks will entail (i.e. will it involve checking the accuracy of these documents or just that they accord with the overall design philosophy).

It may also be important to discuss and agree the categories of documents it is envisaged that you will be required to review, check or approve and the categories of documents that will be excluded from any review, check or approval, and specify this clearly in your appointment where possible.  The drafting is key – take time to get it right.

The process

It may be prudent to discuss and agree at the outset of your appointment how it is envisaged that the process for reviewing, checking or approving of documentation during the design phase will be carried out, including any electronic document management systems or portals that might be used by the project team to aid this process.

Where a project extranet is likely to be used, it may be prudent to make your client and the project team aware that you will only be looking at documents that you are expressly requested to review, check or approve (as applicable) and that you will not look at all documents that can be accessed through the relevant portal. This should be set out clearly in your appointment, where possible.

It may also be a good idea to agree who will be responsible for making sure all relevant documents that you will be required to review, check or approve are uploaded onto the system and that are you are appropriately notified. This should be set out clearly in your appointment, where possible.

Best practice

Where it has been agreed that an extranet will be used during the design process, it is a good idea to agree best practice for any review, checking or approval procedures to ensure that documents are accessible by the appropriate members of the design team and to avoid disputes regarding this process further down the line. Examples of best practice may include:

Ensuring that all documents appearing on an extranet are easily identifiable by a unique document number and a revision / version number;

Specifying clearly the purpose of issue of each document uploaded onto the extranet such as for review by X, for checking by Y or for approval by Z;

• Ensuring that the role of each party, starting from the creation of the document, through review, approval, and end use, is clearly set out and recorded for each document;
• Ensuring that there is a system in place to notify the relevant parties required to review, check or approve documents once a document has been uploaded;
• Controlling access to particular documents so that only those members of the design team who are required to review, check or approve a document can access the document;
• Keeping a clear record of who is able to access any documents uploaded onto an extranet and who is not;
• Ensuring that any comments added to documents during the review, checking or approval process are clearly authored;
• Keeping all previous revisions and versions of documents archived together with a list of all the comments made on the documents (in a trackable format);
• Specifying clearly which of the parties have given an approval status to a document; and
• Ensuring that all incoming and outgoing correspondence, such as review or approval requests are stored within the system with their complete thread of communication.

It is recommended that these issues are discussed between the project team and the relevant system provider at the outset of any construction project and documented in an agreed protocol.

Removal or denial of access to project extranets once a project has completed has also been a feature of some of the claims we are handling. This makes evidence collation difficult. Make sure you have a copy of all necessary records on your own systems or ensure your appointment permits access in the event of a dispute.

Take away points

Where possible, consultants should avoid incorporating contractual obligations to review, check or approve designs prepared by others in their appointments or taking on responsibility for the work of other members of the design team. However, where it is necessary to review design submissions prepared by others in order to carry out your services or allow the coordination of design in such circumstances, it is important to accurately define the scope of your review, ensure you have a net contribution clause in your appointment, and make sure that the process put in place enables you to carry out the review properly and mitigate your risks. It is prudent to discuss any potential issues arising from extranets with the design team at the outset of your appointment and ensure that good practice is upheld by all members of the design team when using these systems.

Should you have any queries or are seeking advice on the matters raised in this article, please do not hesitate to contact Sheena Sood (S.Sood@beale-law.com) or Sophie-Rose Bowen (S.Bowen@beale-law.com).

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