Important Changes to Production Cancellation Terms

28 September 2017
Clearer cancellation policy to replace existing ambiguous terms in PIBS contract.

Picture the scene, you’ve been working with your agency on a production. You’ve reached the point where the details (shoot date, location, specifications etc.) have all been agreed and you’re ready to push the button!

Once the agency has been instructed to proceed, the wheels that have been set in motion may be apparent to many, but as has become clear, there are certain elements of the approval process that clients may not be aware of, specifically regarding what happens once approval has been given.

Enter the PIBS Contract. Once a production partner has been selected, your agency will most likely complete and sign a Production Insurance Briefing Specification (PIBS) contract. But what is it and what does it mean for advertisers?

THE ROLE OF THE PIBS CONTRACT
PIBS has long been the industry standard production contract, sitting between the agency and the production facility, its main function is to agree the various details of the shoot including date; location; specifications; format and instructions regarding filming equipment; insurance and, importantly, the cancellation terms that will kick in should the client instruct the agency to cancel. 

PIBS CONTRACT UPDATES
While cancellation provisions have always existed within the PIBS document and clients have always had to pay cancellation fees, the existing PIBS contract was unclear and ambiguous. A number of updates have recently been made to the terms that all advertisers need to be aware of, specifically where cancellations and the related fees are concerned.

Although considered as standard within the industry, ISBA research suggests that 77% of our members are not aware of the PIBS contract, while over 80% do not believe those involved in the approval process are aware of the cost implications of cancelling a production.

In light of this, and given the importance of the contract and the financial ramifications involved, below is a summary of key updates to the terms where cancellations are concerned:

  • The PIBS terms outline the cancellation payment provisions - cancellation fees are charged based on the amount in respect of services performed by the Production Company in the period between notice of cancellation and intended shoot date
  • Fees range from 25% (20+ days before the shoot) to 100% (if cancelled 10 days or less before the shoot date)
  • Clients will also be liable for Director and Producer's fees upon cancellation again in relation to the period between notice of cancellation and intended shoot date, and again range from 25% (for 20+ days) to 100% (if cancelled 10 days or less before the shoot)

The updated PIBS Cancellation Policy is available to view here >  The updates now make it clear and transparent as to what cancellation fees clients are liable for and when they kick-in.

LAUNCH OF THE NEW TERMS
Although not yet in place, now is the perfect opportunity to ensure you and anyone in the team involved in commissioning such projects are fully aware of the importance of a structured production approval process to ultimately avoid unnecessary production cancellations. 

The new PIBS contract has yet to be launched officially. ISBA will provide a full update as to the official launch date once agreed and will advise you when the new terms kick in. You will also be able to request a copy of the full PIBS document once available.

AMENDMENT TO CREATIVE SERVICES CONTRACT TEMPLATES
To add further weight to the importance of embedding a firm process, ISBA and the IPA have also amended the clauses relating to production and cancellation in the ISBA/IPA Creative Services Contract Templates.

These have been updated to make it clear that it is the agency’s responsibility to advise their client in advance of any cancellation provisions contained in the PIBS or any other third-party contract. We have also inserted a guidance note outlining the responsibilities of each party (you can view the wording for the new clauses here) and we suggest you ensure your current contracts are reviewed and, if required, amended to include this wording as soon as is feasible. 

ISBA will be re-launching the Creative Services contracts later this year, the updated versions will include this amendment and some new clauses related to GDPR compliance, but please do feel free to request a copy of the contract now which will contain the new cancellation clauses mentioned above with immediate effect.

NEXT STEPS

1. Firstly, talk to your agencies about the production process and specifically around approvals and cancellations, and review if necessary.
2. Secondly, ensure that all who commission productions understand the process; the cancellation provisions and the consequences of cancellation.
3. Ultimately, it is now more important than ever for clients to review and embed strict production approval process guidelines to ensure that everyone involved in the process is fully briefed.

ISBA, the IPA and APA have issued joint industry guidance to provide further clarity on the responsibilities of each party within the approval process. View the guidance here >

For more information on any of the above, please contact Traci Dunne

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