REUTERS | Paulo Whitaker

The ICE contract: still a contract of choice?

It’s a cloudy, warm and humid Saturday afternoon here in Panama City and I’ve been sitting on the balcony of my apartment gazing out into the Pacific Ocean and drinking a cup of milky coffee. There are about thirty ships in Panama Bay waiting to transit the canal, the Pacific entrance to which is about five miles from here and clearly visible. A dark red container ship is at the front of the queue and is slowly moving up the approach channel. On the far side of the canal entrance there is a huge build-up of clouds and I can see the occasional lightning flash, but the storm is too far away for me to be able to hear any thunder.

The inky depths

As my mind wandered, I started thinking back to how I first got involved with construction projects. Twenty five years ago I was based in London and working in Masons’ offices in Fleet Street. One of the abiding memories of that time is coming out of the office in the evening and walking to the Aldwych to get the number 13 bus home. If you worked late, the first thing you would be aware of when coming out of the office was the strong smell of ink from the nearby newspaper offices. Sometimes you could even hear the low rumble of the printing presses used for the massive print runs that would go on into the night.

The office had a memorable smell too – the smell of paper. Those were the days of journals, books, lever arch files and endless piles of loose documents. For some reason the standard form contract that always sticks in my mind from back then is the ICE contract, in particular the fifth edition. Perhaps it was the traditional typeface, or the brown cover, or the formal language of ICE that makes me associate it with those days, rather than any other standard form. For all sorts of reasons, perhaps mainly to do with the kind of projects for which it was used, the ICE was always my favourite contract (and still is).

ICE evolution: FIDIC and NEC

ICE was also used as the basis for the FIDIC suite, which has been used extensively throughout the world. The FIDIC contracts are regarded as tried and tested and people are comfortable with them. As an industry we are lucky that so many international projects use a contract that is so familiar to us, even though ICE and FIDIC are not as close as they used to be.

But times change. The ICE has, of course, updated the fifth edition and published more forms, including the design and construct contract, which I have also used. They also developed the NEC suite in the early 1990s. The NEC suite is now widely used in the UK, including for many high profile projects such as the London Olympics 2012 and Crossrail. It is also being exported and has been used in over 20 countries worldwide, and although people have mixed views about NEC (or ECC if you like), it is increasingly seen as the “weapon of choice” for many projects.

To me there is a place for ICE/FIDIC type contracts as well as for the NEC. Yes, for some projects, the modern approach is better. But for others the traditional approach remains more effective and, over the years, I have used both forms equally.

The future of an old favourite

So it was with more than a little sadness that I read that the ICE has announced that it will no longer co-sponsor the ICE Conditions of Contract. The other sponsors, ACE and CECA, have said that they will “examine other opportunities for jointly ensuring that the industry’s requirements continue to be met”, although what this means remains to be seen. I hope that people don’t interpret this as meaning that you should not really be using the ICE forms any more.

Bear in mind that the FIDIC suite, although in theory for “international” contracts, is being used in the UK for domestic projects. It doesn’t take much editing to make FIDIC contracts suitable and, where necessary, Construction Act compliant. For example, adjudication is an established part of the FIDIC dispute resolution process.

The choice for practitioners in future: what’s your weapon of choice?

I am not aware that FIDIC have any plans to move to NEC-type wording, so what we may see is FIDIC replacing ICE as one of the popular choices for UK contracts. Possibly an unintended consequence of the ICE’s decision, but not necessarily unsatisfactory, as many FIDIC contracts are still close enough to ICE to do the job.

Of course, there are other contracts as well, but for major civils projects I think we may be looking at a choice between NEC and ICE/FIDIC.

So, as we learned from Fatboy Slim:

You can go with this
Or you can go with that
Or you can go with this
Or you can go with that

Good luck.

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