It is common place in contracts to see reference to the Employer’s Agent having to act impartially. This wording appears to be at odds with the very role of the Employer’s Agent on the basis they act on behalf of the Employer. It therefore makes sense that the Employer’s Agent acts solely in the Employer’s interests. However that is not always the case.
Typically, the Employer’s Agent is expected to act on behalf of the Employer when carrying out its contractual duties. When administering the works by issuing instructions and approving variations, the Employer’s Agent acts for the Employer and can make decisions that favour the Employer.
However, case law has placed certain limits on the loyalty of the Employer’s Agent whilst carrying out other duties. When acting as the decision maker in relation to extensions of time, loss and expense and applications for payment, the Employer’s Agent is required to be impartial and cannot make a decision based on the needs of the Employer.
This was set out in the Case of Scheldebouw BV v St James Homes (Grosvenor Dock) Ltd where it was provided that ‘Generally the decision maker is not, and cannot be regarded as, independent of the employer. When performing his decision making function the decision maker is required to act in a manner which has variously been described as independent, impartial, fair and honest. The decision maker must use his professional skills and best endeavours to make right decision rather than the decision that favours the interests of his Employer.’
Should you wish to discuss the role of your Employer’s Agent further, please contact your usual Sharratts Contact or the Office on 01959 568000.