Out-Law Analysis | 19 Nov 2021 | 11:19 am | 5 min. read
Industrialised construction, and the innovation it promises, depends on the emergence of a fully functioning data economy. We are seeing new models of collaboration emerging between connected parties in the data economy in the commercialisation of business models. This is how the benefits of data will be realised.
The creation of digital twins requires this kind of collaboration, so a project’s data strategy needs to create an environment that incentivises and encourages active collaboration around data. Generally, businesses are not willing to share their data without clear commercial benefit and, in the case of commercially sensitive information, perhaps not at all. Therefore, requests for data to be shared should be specific and focussed on the relevant data sets only, the incentive for sharing needs to be clear and linked to the outcomes and the potential value of sharing data.
A project’s data strategy needs to create an environment that incentivises and encourages active collaboration around data
One of the benefits of sharing data is the potential for it to support industry’s efforts to decarbonise. The potential in this area was highlighted in March 2021 when the Data Communications Company (DCC), which maintains the network to which UK smart meters connect, announced plans to open up access to smart meter system data “for the purposes of public good”. In time, the DCC is seeking broader systems data exchange. It said: “Our ambition is for data to deliver the best possible outcomes for society, the energy system, our customers and their consumers. All of which, we hope, will accelerate decarbonisation.”
Harnessing the potential of data sharing in construction is a challenge. In addition to the challenges around ensuring structured and useable data, changes to traditional cultures and ways of working are required, including around compliance and data rights, and this needs to be navigated across multiple stakeholders, including some competitors. It also requires a clear understanding of and consensus around what data will be shared and for what purposes – we have seen data sharing projects collapse within a few days when different parties believe that they will be asked to share sensitive commercial information via a digital twin, for example.
Formal legal or contractual arrangements will underpin most successful data sharing ventures. One option to enable data sharing is to establish a ‘data trust’ – a legal structure that provides independent stewardship of data for an agreed purpose and allows stakeholders to “trust” in the arrangements for sharing respective data sets.
We have seen data sharing projects collapse within a few days when different parties believe that they will be asked to share sensitive commercial information via a digital twin, for example.
We recommend that companies interested in collaborating around data, undertake a six-step process for planning a data sharing arrangement via data trusts. This should be progressed in parallel and aligned with a more technical and operational focussed workstream which will look at the structure, format and quality of data.
The first step construction companies should take is to establish a clear and comprehensive objective which can be referred to when making decisions about how the data trust is to be established. Thought should be given to:
Data sharing arrangements only work as intended if they are attractive to participate in for the intended data providers. Questions to ask yourself include:
The third step is to identify the data users. Relevant questions to consider will include:
Data sharing arrangements may be enabled through the appointment of a central custodian to manage the arrangement, making decisions and granting access to data users in accordance with any agreed rules. It is recommended to consider:
The rules of the data sharing arrangement are most likely to be set out in the documents enshrining the rights and obligations of the stakeholders and form part of the formal legal/contractual relationship. The following should be considered:
While data sharing arrangements are unlikely to require the establishment of a standalone legal entity, the detail of the relationship between the data providers, the data custodian and the data users may be enhanced by the use of judicious contractual regulation across the stakeholders.
The detail of the regulation will depend on the earlier considerations on the objective, providers and users and the rules to apply. It should be considered on a case-by-case basis against all of these parameters.
If it is appropriate to establish a separate corporate vehicle for the data sharing purpose, there is also likely to be a need for contractual arrangements. However, this will be in addition to the corporate documentation and governance underpinning the special purpose organisation.
In each case, the preferred rights and obligations to be agreed will be driven heavily by issues of accountability and liability between the parties. Appropriate guidance for stakeholders should be prepared to assist in the successful implementation in accordance with the shared vision.