A Consortium Agreement is a binding contract signed between the partners of a Horizon 2020 collaborative project. The Horizon 2020 Grant Agreement (article 41.3) specifies that: “The beneficiaries must have internal arrangements regarding their operation and coordination to ensure that the action is implemented properly. These internal arrangements must be set out in a written Horizon 2020 ‘consortium agreement’ between the beneficiaries”. So what must you know about this agreement and the process of putting one into place? Continue reading to learn more.
Why is a Consortium Agreement needed for your Horizon 2020 project?
The Consortium Agreement supplements the Horizon 2020 Grant Agreement. While the Grant Agreement establishes the binding legal relations between the European Commission and the project’s partners, the Consortium Agreement establishes and governs the relations between the partners themselves. Unlike the Grant Agreement (which is fixed and cannot be modified), the Horizon 2020 Consortium Agreement is essentially a commercial agreement between the partners. As such, it is flexible and can be adjusted to the specific needs of the project and its partners. Keep in mind – once the Horizon 2020 project is funded a consortium partners will be working together for a long period of time. For this reason, it is of great importance to have a binding agreement that takes into account the various expectations, requirements, and circumstances that can arise.
A typical Horizon 2020 Consortium Agreement can address various aspects, including (but not limited to):
- Intellectual Property Rights (IPR)
- Future use and commercialisation of the project’s results.
- Knowledge transfer processes between project partners
- Internal management processes
- Reporting processes within the project consortium
- Conflict resolution processes
For more information, refer to the detailed guide by the European Commission, including typical issues that can be addressed by the Consortium Agreement.
When to prepare and sign the Horizon 2020 Consortium Agreement
There is clear motivation to start drafting the agreement as soon as possible. Potentially, this is during the proposal preparation phase when the operational relations between the partners are formed and tasks are assigned. It is good practice to ensure that the project is well planned, including all legal aspects, before it is submitted. This practice may help avoid unwanted disputes later on between partners.
That being said, there is one important point to keep in mind: preparing a Horizon 2020 consortium agreement requires a great investment of time, resources and funds for legal counselling. Should the project not be selected for funding by the European Commission – such allocation of money and time will essentially (and quite unfortunately) go to waste.
Therefore, to make best use of time and resources, the correct occasion for drafting this agreement is right after the EC notifies that the project is selected for funding and before the EC asks to sign the Grant Agreement. This timeframe is approximately three months long, which is sufficient for preparing and finalizing the Consortium Agreement.
So what should be done to best address the needs of consortium members early on, without spending the resources and time before there is more clarity of funding?
In order to bridge this gap, it is recommended to:
- Discuss and reach agreements about all relevant issues between the partners (as mentioned above) during the pre-award phase and as part of the proposal preparation phase, before submitting the application. These issues can and should be included in the proposal itself. Not only will this serve as the basis for Consortium Agreement later on, but it will also leave a better impression on the reviewers. Extra points may be gained in the evaluation for that.
- Although not a must, consider signing a Memorandum of Understanding (MoU) between the partners during the project development phase. It should be relatively short and concise, while reflecting all agreements that have been reached with the partners to date.
- Finally, it is our recommendation to seek professional legal advice to support this process.
Seeking expert legal advice when drafting a Horizon 2020 Consortium Agreement?
Since the Consortium Agreement is in fact a commercial agreement, we’d highly recommend the services of a legal advisor with an expertise in drafting such agreements.
A professional legal advisor, experienced in such consortium agreements will provide you the following services:
- Set the stage and prepare a first draft of the consortium agreement, typically DESCA-based (see next section for details).
- Tailor the agreement in accordance to the specific project.
- Collect relevant input from all partners (such as IPR aspects), and ensure the point of view of each partner is fully reflected in the consortium agreement.
- When relevant, communicate & negotiate with local legal advisors of specific partners.
- Consolidate all of the above input into the consortium agreement, while ensuring that this agreement serves its original purpose and the project’s needs.
Note: The costs related to drafting a consortium agreement are not eligible for reimbursement, because the consortium agreement should be signed before signing the grant agreement. However, costs related to updating the consortium agreement are eligible if incurred during the action duration.
What is DESCA and how is it relevant?
DESCA (Development of a Simplified Consortium Agreement) is the most popular out of several Horizon 2020 Model Consortium Agreements. It is a result of a collaborative project supported by the EC. Its output is a model consortium agreement that anybody can use as the basis for a specific consortium agreement for a specific project. The DESCA model consortium agreement is available to download for free.
While it is not mandatory, we do recommend referring to the DESCA structure and guidelines when drafting a consortium agreement. As mentioned above – it is advisable to use experienced legal counsel when preparing this agreement. The DESCA template should only be referenced as a means of generally structuring the agreement and keeping in mind important aspects that need to be considered.
In conclusion, drafting of the Consortium Agreement is an immensely important process that must not be overlooked. Although fully preparing one during the proposal development phase of your project is not mandatory, there are important steps that should be taken into account during this phase. Should you be the proud owner of a funded project and in case further information is needed, do not hesitate to contact us.