School of Specification – Compliance for architects

Chloe Wynne, Solicitor in the Business Crime and Regulation team at JMW Solicitors, has produced a School of Specification module exploring compliance for architects. Here, she outlines the key legal obligations underpinning practice and how to reduce risk.

Why is compliance such a critical issue for architects, and where do practices most commonly go wrong?
In a profession that is highly technical, creative and multi-faceted, you can see how an architect’s competing priorities could overtake the basics of producing an engagement letter or completing due diligence on a new client. Common issues are not having adequate indemnity insurance in place, not notifying clients at the outset of the practice’s complaints process, and not being upfront about costs when a project is onboarded.

What is an engagement letter and what key information should it include?
This is essentially a welcome guide to a new client that doubles up as a paper trail if things go wrong. It should be easy for a client to follow and contain enough detail that all parties can refer back to it as the project progresses and check what was agreed at the outset. The letter should include the agreed scope of work, any work that has been excluded, agreed timelines and costs, when fees become payable, and how to make a complaint.

How do the ARB and RIBA standards shape good practice when it comes to communication and managing client relationships?
There is an emphasis on writing to clients at the outset of a matter and updating them as soon as possible of any changes thereafter. The ARB Standards require architects to understand requirements and expectations of the brief before committing to work, take into account the team’s capacity, and to plan and monitor projects.

The engagement letter is essentially a welcome guide to a new client that doubles up as a paper trail if things go wrong”

What do architects need to understand about anti-money laundering under UK law?
While architects are not considered ‘relevant persons’ under the Money Laundering Regulations 2017, there is a lot of overlap between architecture and property development, which is a high-risk area for money laundering. All UK businesses are also subject to the Proceeds of Crime Act 2002, which makes it a criminal offence to possess or facilitate the use of ‘criminal property’ on behalf of someone else. Architects should familiarise themselves with potential red flags and report suspicions of money laundering to the National Crime Agency. This might include receiving instructions from a new client that make little to no sense, being paid in cash, or having a client quickly ask for a refund shortly after depositing funds.

How can architects avoid cost-related complaints and ensure transparency around fees?
As well addressing costs at the outset, It’s also necessary to be proactive and clear about them throughout the project, right up until completion. There can be slippage in architecture projects, both in terms of timescales and fees, so it may not be problematic if original estimates are surpassed, but communicating the reasons in a clear and timely fashion is key. There’s a lot that architects should take from other professions in terms of increasing profitability, by reflecting on their work and working out the difference between their initial quotes and end costs.