Novating a consultant appointment to the contractor

Novating a consultant appointment transfers your contract with that consultant to the contractor, so the contractor becomes the client and you lose any direct right to instruct the person who wrote your ecology report, your transport assessment or your energy statement. On a design and build scheme that is the point of the exercise. The problem arises with planning conditions, because most of them still have to be discharged by the applicant, and the applicant is usually still you.

Sort out who does what on conditions before the novation agreements are signed, because afterwards you are negotiating from a weaker position.

What novation does to your relationship with the author

A novation is a three-party agreement. The original appointment between you and the consultant is extinguished and replaced by an identical appointment between the contractor and the consultant, normally drafted so the contractor is treated as if it had been the client from the start.

The consultant's duty of care then runs to the contractor. You have no contractual right to instruct them, no right to their time, and no direct claim if their work turns out to be wrong. What you have instead is whatever collateral warranty or third party rights schedule the novation package gives you, and those are usually limited to a duty of reasonable skill and care with a capped liability.

Read what you are getting back before you agree to what you are giving away. A warranty that excludes economic loss or caps liability below the cost of the report is worth less than it looks.

Timing novation against outstanding conditions

Most permissions carry conditions that bite before work starts on site, and a longer tail falling due before occupation.

Map them before the contractor is appointed. For each condition, record which consultant's work it depends on, when it has to be discharged, who submits the application, and who pays the council's fee. Then decide whether that consultant is novated at all, and if so, whether the novation carries an express obligation to provide condition discharge services.

The common failure is a condition requiring a construction management plan or a detailed drainage design, where the consultant has been novated, the contractor has not yet been instructed to produce it, and the employer assumes it is in hand. Six weeks go by and the start on site slips.

Where a condition's timing is unworkable, a section 73 application to vary it, or a request to the council to agree a different trigger, is better done early. Our note on reading a consultant fee proposal covers how to spot whether condition discharge is inside the scope in the first place.

Reports the employer should keep rights over

Some documents are part of the planning evidence base rather than part of the construction design, and the employer should keep direct rights over them.

Ecology surveys, contaminated land investigations, heritage assessments, archaeological work, flood risk assessments and transport assessments were all commissioned to obtain permission. You may need them again for a funder, a purchaser, a discharge application, a section 73 variation, or an appeal on a later phase. If they sit only with the contractor, you are asking a third party for permission to use your own evidence.

Two mechanisms work. Exclude those appointments from the novation entirely and keep them with the employer, which is usually right for the planning consultant, the ecologist and the heritage adviser. Or novate but retain an express, irrevocable, transferable licence to use and reproduce the documents for any purpose connected with the site, together with a right to a reliance letter for future purchasers and funders.

Get the copyright licence wording right. A licence limited to "the project" can be read narrowly when the project is later redefined.

Reliance letters as the lighter alternative

Where the contractor only needs to rely on a report rather than to instruct its author, a letter of reliance does the job without a novation.

The consultant addresses a letter to the contractor confirming that it may rely on the named report as if it had commissioned it, usually subject to the same liability cap, the same exclusions and the same professional indemnity position as the original appointment. No contract moves, the employer keeps the relationship, and the consultant's fee for the letter is modest.

Reliance letters suit survey and investigation reports particularly well. They suit ongoing design services badly, because a letter gives the contractor nothing to instruct against.

Who answers the council after handover

Case officers and enforcement officers deal with the applicant and the agent on record. That does not change because you novated an appointment.

Tell the council in writing when the agent for condition discharge changes, and give a single named contact. Where the contractor's team submits discharge applications, decide whether they do so in the employer's name or their own, because the person with the benefit of the permission is usually the employer and confusion here delays decisions.

Keep a live condition tracker with the discharge reference, the submission date, the decision date and the document approved. Conditions discharged against a superseded drawing revision are a standard cause of breach, and a tracker catches it.

Insurance continuity through novation

Professional indemnity insurance is written on a claims made basis, so the policy that matters is the one in force when a claim is notified rather than when the work was done.

Check that the novated appointment requires the consultant to maintain cover at the stated level for the stated period after completion, that the limit is each and every claim rather than in the aggregate where the risk justifies it, and that any net contribution clause is understood. On long programmes, confirm the position again at practical completion rather than assuming the original certificate still applies.

Where a consultant is a small practice, run-off cover after the practice closes is a real risk. A warranty from a firm that has stopped trading and let its policy lapse is paper.

Drafting points that leave gaps

Five recur often enough to check every time.

The scope says nothing about planning condition discharge, so nobody is obliged to do it. Fees for post-planning services were drawn down in the pre-construction stage, leaving no budget on the contractor's side. The copyright licence is neither irrevocable nor transferable, so a funder cannot rely on the report. The collateral warranty to the employer is promised but never executed, and nobody notices until a defect appears. And the novation is signed after the contractor has already started work, leaving a gap where no appointment governs the services.

Fix them in the appointment at the outset rather than in the novation at the end. A well drafted original appointment that anticipates novation costs nothing extra and removes most of the argument later. Where a report needs a named professional to sign it off, the professional review route should be settled before the appointment moves as well.

But the practical point is simpler than the drafting. Write down every outstanding condition, put a name against each one, and circulate it to the contractor and the design team on the day the building contract is signed.

This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it.

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