I have noted that there has been a great display throughout the nation of a willingness on the part of individuals and organisations to work together to see ourselves through this crisis. However, there are some in the construction industry who are already acting in a fashion that I would see as contrary to such a spirit.
The Government has understandably tried to leave our constructions sites open for business as long as social distancing measures and other health and safety requirements can be adhered to. Although this apparent concession may be welcomed by some, it is a fact that because the Government has not ordered closure of construction sites, it will fall to the Contractor to make the decision to close the site .
Unsurprisingly, most contracts make no mention of what to do when there is a pandemic. Many have already turned to clauses which allow programme slippage as a result of ‘force majeure’ but a number of contracts do not have this option and some contracts have defined what is to be understood by force majeure and again, pandemics are not always referred to.
I have personal experience of one of my clients asking the Employer to confirm that a closure of the site and the obvious delays that would arise will be considered a matter under force majeure. Unfortunately, the Employer is unwilling to give that clear unreserved undertaking and instead has sought to introduce amendments to the Contract, some of which have little to do with the impact of Covid-19, as some form of quid pro quo for agreeing to a force majeure event.
Without the compromise on the part of my client, this may suggest that the legacy of Covid-19 will be the Employer applying liquidated damages against my client for any delay associated with the pandemic. This may not be an isolated incidence.
Unfortunately, this will have been somewhat facilitated by the Governments ‘concession’ noted above. Had the Government ordered the closure of the construction sites, the delays would have been recognised in most standard forms of construction contract, the spectre of delay damages being applied by Employers would be removed and there would be no need for my note.
It is often said that the construction industry often leads the nation into a slump but it also tends to lead it out. If things pick up in the construction industry then it acts as a bellwether for the economy. If the reaction of certain Employers/Developers is to challenge Contractors on these matters and enforce damages applied to the delay associated with Covid-19, rather than seeing a construction industry trying to lead the country forward in its economic recovery after the pandemic, we could see further liquidation of contracting organisations.