A checklist of some of the issues to consider
The Covid-19 pandemic and current government restrictions and guidelines have thrown up a range of issues for everyone involved with construction projects, so below is a list of issues that we have been advising on, together with some thoughts as to points that may be relevant to construction projects. As the situation continues to change on a regular basis this checklist cannot be exhaustive but the aim is to assist parties in thinking about what they should do and how to approach the position in which the industry finds itself.
- Are there any proactive steps I can take to mitigate the effect of the Covid-19 situation on my project?
- Can I continue working/keep the site open?
- Looking at the contractual position, am I allowed to suspend or terminate the works?
- Should I be suspending or terminating the works?
- What procedures do I need to follow when suspending or terminating the works?
- Is the current situation force majeure?
- Do I have to give any notices under the contract or to insurers?
- Are there any health and safety angles I should be considering?
- What roles do I have under CDM – client, designer, principal designer, principal contractor, contractor?
- What are my CDM duties in these particular circumstances?
- What is the position under a letter of intent?
- Should I be making an application for an extension of time and given the current uncertainty what information do I need to provide?
- How should I respond to an application for an extension of time?
- Am I entitled to make a claim for additional costs incurred due to Covid-19?
- How should I respond to any claim for additional costs?
- Who is responsible for late delivery of goods?
- Who pays for the storage charges if the site is closed and goods cannot be delivered?
- Who owns any goods in storage or delivered to the site but not yet incorporated into the works?
- How does it make a difference which JCT or NEC contract I am using?
- What is the position under my agreements with other stakeholders, for example with funders or future purchasers/tenants?
- What notifications/applications am I required to make under any agreements I have with other stakeholders?
- If I make an arrangement with the parties on how to deal with the impact of Covid-19 on a project how should I record this to ensure it is binding?
These are just some of the questions we are all facing. The answers to some of them are straightforward; others are more tricky and will depend on the contract terms and the particular circumstances of the project. Whatever route we take to solving the issues, a knee-jerk reaction is likely to be the least successful in the long run so careful consideration is needed to avoid potential disputes or general ill feeling in the future.
The construction process, from design through to procurement and construction, is complex and made more so by the pandemic, so all parties need to spend some time working out the best way forward for each individual project; there is not a “one size fits all” answer to the issues we are seeing. Experience demonstrates that for construction, an off-the-cuff reaction is often not the best solution and parties should seek advice and a continuing dialogue with all involved before deciding on the most appropriate course of action for each project.