Coronavirus/COVID-19 And Construction Contracts

Introduction

1 The impact of COVID 19 is changing daily and last week, in England at least, many sites closed whilst others continued working. This note seeks to set out the practical steps to be taken in light of recent developments, such as:-

1.1 is force majeure likely to apply to the current situation?

1.2 with some sites now forced to close, what needs to be done now?

1.3 other sites remain open and some Contractors/Sub-Contractors believe that they are being forced to continue working – what can be done?

1.4 steps to be taken now to try to protect your position if claims are to be made for additional time/money in the future? (Please bear in mind the principles underlying the interpretation of force majeure and other Contract terms as set out in my first note.

Has a Force Majeure Event occurred?

2 At the moment (i.e. the morning of 30 March 2020) in England the Government has not ordered building sites to shut down. Whether a force majeure event has occurred will always turn upon the wording of the force majeure clause in the Contract, and how COVID 19 has impacted the site in question. There is no guaranteed answer to this question but, bearing in mind:-

2.1 we are facing a global pandemic which has had a significant effect on the economy, transport, etc;

2.2 guidance whereby, when leaving their own household, people should remain 2 metres apart even on a building site. This would require changes to not only different methods of working at the work place, but also amendments to canteen arrangements, welfare and changing facilities. Also at least some over the counter trade merchants are closing;

in my view under most force majeure clauses COVID-19 would probably now be seen as a force majeure event.

Site Closures and the Health & Safety at Work Act 1974 ("HASAWA")

3 There has also been a spate of site closures during the past week. Some Employers and Contractors have expressed an overriding concern to protect their workers which is consistent with the HASAWA which contains the well-known provision, "It shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of his Employees"2.

4 Further the Management of Health and Safety Act Work Regulations provides for risk assessments to be reviewed if "...there has been a significant change in a matter to which it relates; and where as a result of any such review changes to an assessment are required, the... person concerned shall make them"3.

5 In the light of Government Guidance and HASAWA etc virtually every site will have to review and probably change the way it is working. Some sites have closed temporarily to review working practices.

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