Construction Industry working collaboratively during COVID-19?
It may be that a lot of these disputes are flying under our radar, with companies understandably preferring to handle low-value disputes themselves rather than engage solicitors, as our experience has in fact been quite the opposite. The types of disputes coming across our desks at the moment are generally those that would probably have happened anyway (defects, variations, loss and expense) with COVID-19 actually having more of an impact at the other end, when contracts are being put together, with additional contingencies being made for further potential restrictions. This may involve COVID-19 being listed specifically as a force majeure event, or perhaps an increase in fee proposals to build in the additional risks.
We are also seeing an increase in advice relating to extensions of time (EOTs) arising out of COVID-19. Most standard form construction contracts do not contain an express provision which would entitle the contractor to claim prolongation costs due to an epidemic or pandemic; however, they may be entitled to relief for delays caused by such an event. The effect of COVID-19 on the availability of labour and materials, together with changing government guidance and some employers taking the decision to close down construction sites, has led many contractors to therefore seek relief and/or an EOT, many of which have been granted. Companies should therefore look carefully at the terms of their particular contract to see whether any such action is appropriate in the circumstances.
Overall, the general feeling seems to be that of positivity and pragmatism rather than blame and resentment, which are regrettably so often attributed to relationships in the construction industry. Please see our previous article for other causes of ‘cautious optimism’ in the construction industry, a copy of which can be found here. Hopefully, this mindset will endure as we continue through the pandemic and (hopefully) out the other side.
This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. For advice, get in touch with your usual Greenwoods GRM contact or scroll down to complete our enquiry form.