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From: The Question of Collocation
Australian Doctors Fund Collocation Meeting
Sydney - 20 May 1998

Collocation Legal Aspects of Collocations

Address by Ms Leah Chick, Senior Associate, Clayton Utz

1. General
   • Contractual relationship between government and private sector. No "hard and fast rules".
   • Usually negotiated at executive level
   • Fundamentals:
     1. design and construction of private facility;
     2. commissioning
     3. private operator undertakes to provide specified services, maintain accreditation, and maintain and repair private facility to requisite standard;
     4. right of government to "terminate" private sector upon default (eg failure to build/conmission, facility closure). Sale vs. lease.
2. Collocation Contracts
   • Freedom of contract.
   • Do not often deal with day-to-day operational issues in any detail.
   • Operational issues often delegated to committees, either with or without appeal to dispute resolution mechanisms.
3. Trade Practices Issues in Collocations
   • Freedom of contract is subject to statutory constraints eg Trade Practices Act.
   • TPA designed to protect business from "anti-competitive conduct" and "unfair market practices".
   • Exclusive dealing prohibition.
   • Third-line forcing.
   • ACCC is starting to focus on the health industry.
4. Protection against risk/cost shifting to Public Sector
   • Nature of risks/costs that may be shifted differs from project to project.
   • Should be identified up front.
   • Should be addressed in collocation contracts.
   • Risk and cost analysis. Forethought and planning!
   
   

Leah Chick LLB Senior Associate, Clayton Utz, Sydney