A Consortium Agreement is a binding contract signed between the partners of a Horizon Europe collaborative project. The Horizon Europe Grant Agreement (article 7) specifies that: “The beneficiaries must have internal arrangements regarding their operation and coordination, to ensure that the action is implemented properly”. So, what must you know about this agreement? What is the recommended process for creating an agreement? Continue reading to learn more.
Projects that apply the Lump Sum model may require to pay special attention to the Consortium Agreement.
Why is a Consortium Agreement needed for your Horizon Europe project?
The Consortium Agreement supplements the Horizon Europe 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 Europe 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 Europe project is funded a consortium of 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 Europe 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
and more…
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 Europe Consortium Agreement
There is a clear motivation to start drafting the agreement as soon as possible. Potentially, this would be 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 Europe consortium agreement requires a great investment of time, resources and funds for legal counseling. 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 the best use of time and resources, the correct timing 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 the 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 Europe Consortium Agreement?
Since the Consortium Agreement is in fact a commercial agreement, we’d highly recommend the services of a legal advisor with expertise in drafting such agreements.
A professional legal advisor, experienced in such consortium agreements will provide 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 with 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 Europe Model Consortium Agreements. It is the 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 updated DESCA model consortium agreement for Horizon Europe 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.
Conclusion
In conclusion, drafting 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.