Real Estate and Construction
From AB 92 to AB 18 – the main changes
The current Danish General Conditions for the provision of works and supplies within building and engineering, AB 92, have been revised. The new rules, AB 18, are mostly a codification of court and arbitration practice and some necessary clarifications with few significant changes.
For instance, AB 18 now lists the requirements for claiming liquidated damages on interim deadlines that have been established in case law. The most significant changes are set out below.
A more detailed process
Several clauses have been added to AB 18 entailing requirements for the project processing. Thus, AB 18 contains provisions concerning detailed timetables, mandatory project reviews, project optimization, and updates of time schedules, notifications and claims. All with the aim of revealing and solving problems at an early stage of the process.
However, lack of notification still does not entail time barring of related claims.
Under Danish court and arbitration practice, it is possible for an employer to direct claims against subcontractors or (sub)advisors based on breach of duty. Such claims are not subject to any limitation of liability. Under AB 18, the employer waives the right to unlimited direct claims.
Digital design (BIM), but no software provisions
Unlike AB 92, AB 18 contains provisions concerning the use of digital design. The distribution of risks and liabilities is not altered, but it is specified how this is adapted to a digital design process.
The provisions are not as detailed as the CIC BIM protocol, but are in accordance with Danish drafting traditions.
However, AB 18 still lacks detailed provisions concerning rights to software and methodology for securing software and data. Such terms are often required in modern projects.
Dispute resolution ladder
One of the tasks of the AB 18 committee has been to reduce the number of disputes. The re-sult has been the introduction of a long dispute resolution ladder, which goes from negotia-tions between project managers and the upper management to mediation and finally arbitra-tion.
The Danish tradition of employing independent experts to take evidence and provide assess-ments concerning the technical matters of the dispute is maintained. International contractors should keep this in mind when a dispute arises.
The AB 18 will become effective on 1 January 2019.