1. Notices
a) All requisite notices under the relevant contract should now have been issued. If they have not, it is paramount that they are issued without further delay, particularly if your contract includes a condition precedent provision for notification of delay. These will include notices of delay to the regular progress of the works. Under JCT type contracts, the relief events most likely to form the basis of an extension of time application will be: -
i) The exercise after the Base Date by the UK Government of any statutory power…
ii) Force majeure
b) These are neutral events, which do not attract an entitlement to financial relief. In order to do so it will be necessary to bring the circumstances within one of the Relevant Matters, perhaps employer impediment, prevention or default or in certain circumstances a variation e.g. an instruction to accelerate works.
c) Under NEC contracts, a compensation event under clause 60.1(19) (an event which neither Party could prevent) would entitle the Contractor to both financial and time relief.
d) Under JCT contracts, the Contractor is obliged to notify the Employer of any actual or anticipated delay to the regular progress of the Works.
(e) The Contractor should notify the Employer of any material change in the estimated delay or in any other particulars immediately it becomes aware. The effects of COVID-19 are unlikely to be known for some time in most instances, therefore best estimates of the likely effect on the Completion Date should be provided to the Employer at regular intervals.
(f) Under JCT contracts, the Employer (or Architect /CA) is obliged to notify the Contractor of their decision within 12 weeks of the receipt of the required particulars from the Contractor.
(g) Under NEC contracts, the contractor has to comply with the time requirements for the issue of a quotation for a compensation event. This may well include forecasting the effects of both time and cost before they are known. (Clauses 63.1 and 63.5, NEC 4). This is likely to prove problematic where the effects of the COVID-19 pandemic are unclear and cannot be accurately forecasted.
2. Records
a) As the long-term effects of the COVID-19 pandemic are not known, accurate and adequate records are essential.
b) There is the potential for claims to be pursued by all stakeholders in the construction industry as a result of the COVID-19 pandemic. Those who maintain complete and accurate records are likely to be more successful than those who do not. Notifications under a JCT contract relate to delays to the regular progress of the Works. Therefore, although the site team may be continuing with the Works, it is likely that this will be with a significantly reduced number of staff. Inventories of the site team and outputs being achieved need to be recorded against tendered outputs.
c) Records of any staff that are off work due to COVID-19 symptoms should be maintained.
d) Information on staff levels and outputs of all the supply chain on site will have to be rigorously maintained. A simple response from a sub-contractor stating that they cannot comply with the UK Government and Public Health guidelines may not be sufficient to support a claim for an extension of time upstream. Substantive reasons as to why the relevant sub-contractor cannot satisfy the UK Government and Public Health guidelines must be sought from any supply chain member who is not able to continue with their obligations. Sensitivity obviously needs to be employed here, but generic, as opposed to situation specific, reasons will not be satisfactory as primary evidence of delay and to support a claim for extension of time.
e) Any inability to secure materials, plant or labour resource must be recorded with specific reasons as to why they cannot be procured. The Contractor must remember that under a JCT contract, best endeavours must be employed to mitigate delay. This could extend to procuring materials and/or plant from an alternative supplier.
3. Information from others
a) The supply of information required under the Contract from designers, the Employer or others is likely to be affected. Requests for information measured against programme requirements should be recorded.
b) Utility providers and other third party companies are also likely to be affected.
4. Disruption
a) It is highly likely that there will be significant disruption on construction as a direct result of the COVID-19 pandemic.
b) Disruption would ordinarily be a head of claim for loss and/or expense and therefore may not always be recoverable under a JCT type contract for a COVID-19 type delay. However, disrupted activities on site are very likely to delay the regular progress of the Works and may form the basis of an application for extension of time even if no claim for loss and/or expense lies.
c) Records must therefore be kept where output has been affected due to matters such as piecemeal deliveries of goods and equipment, fluctuations in the labour force and compliance with the implementation of stringent health and safety procedures to comply with the UK Government and Public Health guidelines.
d) Reduction in productivity will also need to be recorded due to instigating measures on site to comply with the UK Government and Public Health guidelines.
5. Contract Provisions for future Contracts
a) Future contracts entered into should include express provisions that deal with COVID-19 in particular and similar occurrences in general. Further waves of infection or new pandemics are either possible or cannot be ruled out.
b) A force majeure event under a JCT Contract or an unforeseeable event under a NEC Contract may not include further waves of infection or new pandemics in future contracts, as the COVID-19 pandemic is known to all and arguably further waves of infection or new pandemics are now foreseeable.
c) Careful consideration must also be given to the date upon which unforeseen events or changes in regulations and statute are predicated in JCT and NEC contracts. Under JCT, reference is given to a “Base Date”. This is usually a date during the tender process. Under NEC contracts, the date is the date the contract is executed. This may well be some time after the contract actually commences.
6. Safety Procedures for Construction Sites
a) If it is considered that it is safe to operate a construction site during the COVID-19 pandemic, then procedures must be employed to ensure the well-being and safety of all operatives.
b) These procedures must comply with the UK Government and Public Health England guidelines.
c) Risk and method assessments must be prepared afresh, adhered to and measures implemented to ensure compliance.
