The organisation Clarity is brimming with lovely lawyers and legal consultants fascinated by how we can simplify legal documents and overcome the barriers to changing traditional drafting.
After a recent meeting, Cathy Wilcox introduced me to the Pathclearer project, and its developer – Steve Weatherley then Head of Legal at Scottish & Newcastle plc, now Group General Counsel at Stock Spirits Group PLC.
Born of frustration
The project helped to ‘clear a path through the jungle of commercial contracts‘ based on these frustrations, which will feel very familiar to those of us involved with construction contracts:
- long and detailed contracts (JCT=50k words)
- drowning in paperwork
- reacting to terms not assessing legal risks
- long negotiation periods with some tortuous debates over relatively unimportant clauses
- transactions starting before contracts signed (leaving a confused legal position, like good old letters of intent?)
Contracts which, in short, were not designed to be read, understood and used to help the business flourish and grow.
Many lawyers argue that we need contracts to create certainty, avoid disputes or provide compensation. But
- certainty is often illusory – the more detail, the more scope there is for ambiguity or inconsistency; and judges can interpret contracts in surprising ways!
- disputes are encouraged and prolonged by detail – resulting in a paralysis of indecision on how to resolve issues and souring relationships as each side retreats to their lawyers;
- contracts may not be fair, and can be one-sided – as opposed to the general law which provides a middle-ground;
- relying on courts to award and assess compensation is extremely expensive and time-consuming;
- longer-term contracts cannot reflect changes and risk events which fundamentally alter the initial deal.
The Pathclearer strategy adopts plain language principles to create trust and workable documents.
What should you do?
You can create a winning strategy to create contracts which help construction to flourish and businesses to grow. Follow the 3 core principles of the Pathclearer strategy:
- Focus on key legal risks and value (ignore the rest)
- Align aims by focusing on trust, incentives and allowing the relationship to end (outputs not detailed inputs)
- Adopt legal fairness from statute or case law for everything else.
This resonates with my approach to construction contracts.
Related resources: watch this Prezi.