Yesterday, despite the UK being put on lockdown, the Secretary of State for Housing, Communities and Local Government tweeted that the construction industry could continue to work, causing confusion within the industry. Today, the Construction Industry Council is seeking clarity from the UK Government as to what the lockdown means for its members and their operations.
In Ireland, with the Government expected to announce further restrictions on our movements later today, the Construction Industry Federation (CIF) has asked for building sites to be allowed to remain open. John Regan, the Construction Sector Organiser with SIPTU reiterated this call from the CIF and stated that health and safety protocols were being developed with its members to ensure the implementation of the Government’s guidelines for dealing with Covid-19 in the workplace.
Even if construction works are permitted to continue, measures such as social distancing will invariably lead to a slower rate of work, thereby impacting programmes for works and a contractor’s ability to achieve the contractual completion date. Mr Regan stated that the CIF are working with clients to give assurances to contractors and workers with respect to liability for delays in the event of non-performance of contracts arising from Covid-19. It is unclear what these assurances will look like, if they will be given at all and if they will expand to the public and private sector. In the absence of any formal statement from the Government or the CIF regarding such assurances, all parties must remember that their contracts - and the duties and rights thereunder - remain in force.
The outbreak of Covid-19 means that certain contractual provisions, which may typically have gone unread, should now be coming into focus for clients and contractors. The application of reliefs such as force majeure and extensions of time will depend on the terms of each contract.
We urge all parties to review the relevant provisions in their contracts in good time and take practical steps to minimise the potential impact. This includes:
- Read your contract and consider what provisions may be applicable in these unprecedented times.
- Ensure strict compliance with any notice requirements or conditions precedent under your contract. For example, if your contract contains a force majeure clause ensure that the requisite notice is served in the manner prescribed under the contract (i.e. to the correct person or persons and using the correct method of delivery). Clients should be alive to any contract provisions which allow claims to be approved by default where the claim is not rejected within a specified number of days.
- Keep written records. As we adjust to new ways of working through technology it is more important than ever to keep a contemporaneous record of instructions given or received and any action taken.
- Keep the lines of communication open with all relevant parties, including your employees.
- Consider if any other parties need to be kept updated of events happening on site. Is there a funder on your project and what are your obligations to that funder? Have you contacted your insurance advisor?
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