Episode Content

In a powerful episode of the Digital Construction Podcast, we heard from Veer Dhaliwal, a distinguished finalist for the 2024 Thirty under 30 Construction and Infrastructure Lawyer of the Year. Veer highlighted that BIM is far more than a design tool; it's a shared digital environment integral to contracts, liabilities, and risk exposures. Understanding these legal dimensions is absolutely crucial for protecting projects and fostering clarity over confusion.

"Why" do we need Legal Literacy in Digital Construction

Veer passionately explains that legal literacy isn't optional for construction professionals and BIM managers. He argues that BIM's role is fundamentally intertwined with contractual obligations, potential liabilities, and overall risk management. Without a solid grasp of the legal landscape, collaborative efforts can quickly dissolve into confusion and claims, rather than providing clarity. Critically, he notes that overly restrictive IP ownership by clients can stifle innovation within the industry, preventing the advancements needed to create complex structures.

Navigating the Biggest Legal Minefields in BIM

Companies leveraging BIM and other digital tools often face significant challenges that can lead to major headaches. Veer identified four key areas:

  • Data Ownership: A perennial question remains: Who truly owns the BIM model or the underlying intellectual property (IP)? Is it the client, the contractor, the consultant, or the original creator? And what happens to its use after a project concludes?
  • Liability: If someone relies on inaccurate model data, for instance, leading to a bridge misalignment, who is held accountable? Determining liability for flawed digital deliverables is a pressing concern.
  • IP Protection: Protecting intellectual property becomes incredibly complex when multiple parties contribute to a single federated model.
  • Clarity on Contract Terms: Many contracts fail to explicitly define digital workflows or how BIM forms part of the agreement from project inception, often incorporating it as an afterthought. This lack of bespoke clauses for BIM leads to ambiguity and increased risk exposure.

Who Owns the BIM Model: The IP Conundrum

This is a "very loaded question," according to Veer. While the creator generally owns the copyright in Australia upon creation, BIM's collaborative nature complicates this. With designers, engineers, contractors, and asset managers all contributing to a federated model, simply saying "the creator owns it" isn't enough. Best practice involves clarifying IP at project conception; explicitly defining who owns what, the rights to use, and under what conditions, such as licensing arrangements (e.g., a perpetual licence). Veer strongly advocates for a model seen in the defence industry, where creators retain full ownership and grant broad, perpetual licences to clients, fostering continuous innovation rather than shelving valuable IP.

Sharing BIM models requires setting clear ground rules for IP early on, ideally within a BIM Execution Plan (BEP). Practical steps include limiting editable rights and watermarking draft files.

The Implications of "Fitness for Purpose" in Digital Models

"Fitness for purpose" is a critical contractual term meaning a deliverable must perform exactly as intended, going beyond mere skill and care. Veer warns that even minor discrepancies in a BIM model intended for fabrication can lead to significant claims if this clause is present. Contracts must precisely define the model's intended use, whether for coordination, reference, or construction, and disclaimers alone may not offer sufficient protection.

Common claims include models being used for unintended purposes, conflicting information between versions, delays caused by incorrect data, and the widespread issue of IP misuse by third parties. To properly allocate responsibilities, the BIM Execution Plan (BEP) should be incorporated directly into the main contract from the outset. This ensures a common understanding of BIM's function and support throughout the project, allowing for more flexible contractual terms where BIM might be subject to skill and care rather than a strict fitness-for-purpose standard. It's vital to remember that the BEP is a legal document that demands attention.

International Projects and The Evolving Legal Landscape

Working on international projects introduces layers of complexity due to diverse legal frameworks across regions like the UK, EU, US, and Australia. Each has distinct laws governing data ownership, privacy (e.g., EU's GDPR versus Australia's Privacy Act), and BIM standards. It's imperative to clearly define jurisdiction and governing law in contracts and adhere to local regulations.

Challenges arise when attempting to make claims against service providers in different countries, highlighting the importance of clauses like milestone payments and retention sums. In Australia, courts currently view BIM-based claims within the broader context of IP or delayed deliverables, rather than as standalone BIM disputes, though this is an evolving area.

Looking ahead, Veer anticipates construction law will evolve towards greater collaboration and a shared understanding of BIM. The primary future challenges will be the fragmentation of systems, teams, and contracts, underscoring the need for comprehensive alignment across the entire project lifecycle.

Key Takeaways

  • Prioritise bespoke BIM clauses: Don't rely on generic IP clauses; ensure contracts are tailored for BIM and IP protection.
  • Define ownership clearly: Explicitly detail model deliverables and data ownership at project inception.
  • Manage liability proactively: Understand and limit liability for model misuse, considering the duration of liability.
  • Empower your team: Train staff on legal risks and the critical interplay between BIM models and contract terms.
  • Integrate the BEP: Ensure your BIM Execution Plan is a contractual document from day one, not an afterthought.
  • Seek specialist advice: For complex projects, consult legal experts in digital construction and IP.