Grenfell Tower report sends out stark warning for businesses

The recent Grenfell Tower report has shone a light on some of the problems caused when parties adopt a “casual” approach to contractual relations. There are lessons to be learned by businesses in all sectors, says Charles Abraham, Head of our Dispute Resolution team.

The inquiry criticised the “absence of formality” in relation to the contracts and the “unprofessional” culture of “getting on with the job without waiting for terms to be formally agreed”. Such practices were described as “widespread”.

This meant that the firms involved had failed to “properly understand the nature and scope of the obligations they had undertaken”.  Partly as a consequence of this, the key parties “all pointed the finger at each other” when things went wrong.

In most sectors, a casual approach to contractual relationships will rarely lead to the devastating consequences for others seen at Grenfell Tower.

However, businesses can cause significant self-harm if they do not take their contractual relationship seriously. For example, business are often unclear on:

• Who they are contracting with;
• What is actually expected of them;
• Which laws govern the contract; and
• What they can do if they are let down.

The results of this can include:

• An inability to deal with issues when things go wrong;
• Damage to key relationships;
• Significant costs;
• Greater risk;
• Stress; and
• Damage to reputations.

The Grenfell Tower report serves as a sobering reminder of the importance of ensuring that your contractual practises are in order. Failure to manage these effectively can cause problems to snowball as parties fail to understand and take their responsibilities, leading to finger pointing, difficulties to finding a clear resolution and tragically in this case, widespread loss of life.

We often speak to businesses that feel uncomfortable discussing contracts with other parties, with many worrying that this may be perceived as a lack of trust. However, it doesn’t have to feel that way – it’s about everyone being clear on what is expected of them, protecting their interests and understanding any risks.

How can we help?

Having what may feel like a difficult conversation now could save your business significant problems in the future. For advice and assistance, call Charles Abraham on 0113 201 0405 or email ku.oc1728468922.fcl@1728468922mahar1728468922bac1728468922.

*Important information about our articles*