Building Information Modeling (BIM) has been subject to intense discussions in recent days. Several software companies have released new intelligent solutions for planning and designing complex construction projects. The market for architects and engineers seems to be changing in near future. Is this simply the next step in technological progress or the first step in disruption of markets? Here are a couple of thoughts.  

In 2015, Alexander Dobrindt, the German Minister for Transport, announced milestones for the introduction of BIM for German road and rail projects from the end of 2020. Several other governments in the EU have called for BIM to be adopted on construction projects. BIM has simultaneously become the source of interest for the private sector. Software development companies are working high speed on not only replacing the CAD standard from the 80s but also on improving software-based project management for complex construction projects. In our daily consultancy practice, however, BIM has not taken up relevant space. This leaves enough time for a few thoughts on future aspects of BIM:

First of all, if in future BIM will allow for the principal to set up and change his/her own planning documents without the requirement of deeper architectural skills, simply because the software solution is good enough for calculating the feasibility of building projects, including complex aspects such a statics and if this software will be able to issue detailed service descriptions, then yes, a certain notion of disruption to the market of architects and engineers is undeniable.

Surely, someone will have to lay the software foundation at first hand and this will require in depth knowledge of all planning disciplines, but this will probably keep busy only a handful of participants. The majority of architects and engineers will, when push comes to shove, have to think through their business model. If, and as far as I can see this will still require a long time to come, BIM software replaces planning consultants and related actors on construction sites such as projects managers, BIM will be disruptive to the planning industry as Airbnb was disruptive to hotels and Spotify was to the music industry. On a related note, disruption is not a regional but a global issue. Software companies from any place on earth can flood regional markets with useful instruments which can have disruptive impact on regional markets. Regional protection measures such as restrictions on the authorization to present building documents to an authority (under German Law the so-called “Bauvorlageberechtigung”) which at the moment require specific qualifications are not as such unsurmountable obstacles – simply look, for example, at the success of Uber in many countries despite of regional restrictions on passenger transport. Insofar, I am certain, BIM will potentially be disruptive to a specific segment of markets.

Secondly, from a construction lawyer’s point of view, BIM will help to improve processes of coordination which have in the past always lead to significant amounts of claims for compensation and supplements. Whenever there is a dispute on the legal consequences of subsequent changes to the planning documents, BIM will help to clarify the scope and impact of the changes in question. It will probably automatically highlight the relevant to changes to each individual company, so that there will be no misunderstandings and communication gaps. Insofar it is a strong improvement especially when it comes to claim management for posterior claims due to changes. It is highly questionable as to whether this could eventually be unbeneficial to someone. The principal is under German law mostly in the better position when it comes to the question of claims for compensation and supplements since the contractor bears the full burden of presentation and proof. The principal will, however, have a sincere interest in quick clarification of the current construction costs. So far, BIM looks like a tool of accelerating building projects and surmounting unnecessary and expensive conflicts. Thus, it will be an improvement even if it is disruptive in a long-run.

Thirdly, new legal and liability challenges will arise. Among the implications on procurement law and legally defined services and pricing structures (e.g. German HOAI), the construction lawyers will have to re-consider the contractual structures. The legislator will have to adapt existing rules. Thinking outside the box will be essential for finding satisfying solutions:

  • The current contractual structure in construction law is dominated by bilateralism. BIM, however, will most likely require new structures, such as unilateral agreements since everyone will be working on the basis of the same virtual model. Other integrated forms of contract will become more important. This will not only raise new questions towards joint responsibility of the contracting parties, it will also change and accelerate the coordinating systems, which of course need to be laid down in the contracts.
  • If the software will provide for everyone to track all changes in the project and if the software will immediately highlight any changes made for each individual contracting party, the current contractual system regarding posterior claims for changes, supplements, impediments and what not, will have to be adapted. Forms of communication will have to be adapted, e.g. Sect. 4 of the VOB/B (Germany’s standardized construction terms) currently requests any construction impediments to be filed in writing. If, in future, the software will monopolize the coordination process, many formal rules such as the aforementioned will have to be re-drafted.
  • Data security will play an important role in software-based systems. Cloud solutions will intensify the questions towards data protection. Written agreements will have to refer to the acceptance of virtual data – this will be a specific challenge to the law.
  • New communication interfaces will have to be established between building companies and authorities as it is unlikely that a print-out of a BIM project will be acceptable by a building authority. This will require the public law to be adapted. Also, as it looks, there will be several BIM software tools and so far there is no standard interface. Who will decide on which to be the standardized system?
  • Since there will be new actors, important questions towards liability will have to be answered. The so-called BIM Manager is currently subject to debates. Whatever his scope of work may be, he will have to be liable for his actions. Allocation of claims for compensations will at the same time become complex in unilateral contracts. This will also require new insurance policies. Furthermore, the software developer himself could be subject to liability. Close legal examination is needed.

The list can be endless. So far, it is clear, preventative legal mechanisms and early adaption of legal structures will play a major role when it comes to working with BIM.

 

Dr. Andreas Papp
andreas.papp@kapellmann.de
Attorney at Law (Construction and Real Estate Law)
at Kapellmann und Partner Rechtsanwälte mbB

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