How do we improve the outcome of complex construction projects?
How do we improve the outcome of complex construction projects?
Complex construction projects often exceed budget and time to such an extent that they are deemed failures. What goes wrong and what can be done to secure better coordination and cooperation? Does the answer lie in adopting a more relational mind-set by for instance activating common social norms? Or do the problems and the solutions lie elsewhere? Oliver Hart, David Frydlinger, and others have recently argued for a new way of contracting that indeed involves, among other factors, the activation of social norms. Their perspective will be complemented or perhaps contradicted by the other presenters, who based on their practical experiences will give their accounts of what often goes wrong and what can be done to improve on contract collaboration and conflict resolution. All attendants are encouraged to take part in the discussions following the presentations.
Date: May 14. 2024 Time: 12.20 pm – 5.00 pm Place: Porcelænshaven 22, Råvarebygningen PHR.s20, 2000 Frederiksberg
Program:
Topic: Relational contracting in construction projects A contract for a complex construction project is a prime example of an incomplete contract. The impossibility of accurate planning of the project often leads to budget overruns and delays, where the parties involved frequently end up in blame games, hold-up behaviour and court fights. Can contractual incompleteness be overcome? Can construction contracts be designed that lead to better planning, joint problem solving and aligned interests and expectations instead of frictions and failure? In this presentation professor Oliver Hart and David Frydlinger argue that this is possible, building on their and others’ work on formal relational contracts and guiding principles.
Topic: An owner’s perspective on relational contracts and their limitations
Erik will speak about poorly planned or ill-designed initial contracts both from the contractor and from the Employer. About inadequate cooperation during the execution of the contract between the Contractor and the Employer but also inadequate cooperation internally within the respective project organisations (Employer, Consultancies, Contractor, Sub-contractors).
Topic: Reflections on how to make it to the finish line successfully – the entrepreneur’s perspective
Sanne will speak about her experience with contracts and relations between the Employer and the Contractor before startup, at the construction site, and during the construction period. In particular the importance of the quality of the project material, timely documentation, and agile decision-making powers.
Topic: On the possibilities and pitfalls of collaborative contracting such as partnering and alliancing
Christian will provide insights into the opportunities and challenges of collaborative agreements that focus on early contractor involvement in construction projects. He will discuss the potential obstacles and suggest measures that can support early contractor involvement and ensure that the goals of the collaborative agreements are achieved.
Topic: Conflict resolution and the duty of loyalty in construction contracts
Ole Hansen will provide an introduction to the rules on alternative dispute resolution in the Danish General Conditions for Building and Construction works and supplies (AB 18) and evaluate the content and the actual use of the ‘Dispute Resolution Ladder’ in light of the standard of good faith and loyal cooperation under Danish and Nordic law.
Presentation of the speakers:
David Frydlinger: David Frydlinger is a business attorney at Cirio lawfirm in Stockholm, Sweden. He is specialised in complex commercial contracts, with a focus on partnerships and relational contracts, including contracts in the construction sector. He has authored and co-authored several books on the subject, including “Contracting in the New Economy: Using Relational Contracts to Boost Trust and Collaboration in Strategic Business Relationships” and “Getting to We – Negotiating Agreements for Highly Collaborative Relationships” He has also published articles in the Harvard Business Review and other journals, including “A New Approach to Contracts”, published in the Harvard Business review in September 2019 and co-authored with professor Oliver Hart and Kate Vitasek at the University of Tennessee.
Ole Hansen: Ole Hansen is a professor of law at the University of Copenhagen, Faculty of Law. He is a co-founder of the research center CEPRI (CEPRI - Centre for Private Governance – University of Copenhagen (ku.dk). He is conducting research within private law with special focus on contract law, long term contracts and construction contract law. Ole Hansen has been leading collaborative research projects on e.g. new contract models in the construction sector and on digital construction law.
Oliver Hart: Sir Oliver Hart is currently Professor at Harvard University, where he has taught since 1993. He is the 2016 co-recipient of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Hart’s research centers on the roles that ownership structure and contractual arrangements play in the governance and boundaries of corporations. His recent work focuses on how parties can write better contracts, and on the social responsibility of business. He has published a book (Firms, Contracts, and Financial Structure, Oxford University Press, 1995) and numerous journal articles. He has used his theoretical work on firms and contracts in several legal cases. He is an honorary Professor at Copenhagen Business School, among other honorary appointments. He was made a Knight Bachelor in the King’s Birthday Honours List, 2023.
Erik Stoklund Larsen: Erik holds a M.Sc degree in engineering from the Danish Technical University (1982-88) and a Ph.D in building Materials also from DTU. He worked for five years (1992-97) as a bridge engineer at the Road Directorate, Danish Ministry of Transport, for fourteen years (1998-2011) as a project director at Cowi, a leading Danish consultancy firm, and returned to the Road Directorate, since 2013 as Director, Head of Construction. Has managed major infrastructure projects in Denmark and abroad.
Sanne Godthåb Olesen: Sanne holds a law degree from Copenhagen University (2005), worked for eleven years at the Danish Press Council, Ministry of Justice (2006-2017), then for well over two years at Klar Advokater, first as legal assistant and then attorney. Since 2020, she has worked at a Danish contractor, the Aarsleff Group. Since 2022 as general counsel. Aarsleff organisational chart: Group, major companies.pdf
Christian Molt Wengel: Christian Molt Wengel is an attorney-at-law and partner with 25 years of experience in construction law, including a notable emphasis on collaborative agreements with early contractor involvement. He has the Right of Audience before the Danish High Court and is a trained arbitrator. Christian is the author of “Defects in Construction” and co-author of "The Legal Commentary on AB 18 - General Conditions for Building and Construction Works and Supplies", published by Karnov.
Registration: Register here to attend in person: cbs.nemtilmeld.dk Registration deadline: May 10. 2024 Link to attend online on Zoom:cbs-dk.zoom.us Please be informed: Online participants cannot actively engage in discussions If you wish to participate online, there is no need to sign up. The conference is hosted by CBS LAW (BHL) and organized by Professor Henrik Lando, CBS LAW/BHL in cooperation with DI Byggeri. DI Byggeri and Danish Contract Management Association have generously sponsored the event. |