Cornerstone – Coronavirus and the construction industry

As the threat from COVID-19 became more and more apparent over March, the construction industry was faced with some tough questions.

More so than most disputes, the question of whether or not to continue work was for many a moral issue (should we expose staff and contractors to unnecessary risks?) as much as a commercial and contractual one.

Mixed government contributed to the uncertainty – the government said that despite the lockdown construction sites should continue to operate, but guidance required social distancing measures (amongst other things) that for many sites was impossible.

To help parties at least understand how their decisions might affect their contractual position, Stefan Harris-Wright and Oli Worth produced an article discussing how JCT and NEC standard form contracts might respond to the pandemic. They then hosted a webinar discussing similar issues and produced a FAQ from the nearly 100 questions that discussion generated.

Almost every aspect of life has been affected by the coronavirus restrictions, and construction law has been no different. Other issues we’ve looked at over the last few months include:

• how adjudication enforcements are being dealt with in the new ‘remote working’ world with most court centres closed
• the ‘Conflict Avoidance Pledge’, instigated by the RICS and other industry bodies, aimed at ensuring cash flow remains as unaffected as possible during the crisis
• how payment can be dealt with as the industry remobilises; and
• a further look at payment specific to problems we have seen with house builders.

As lockdown lifts and the industry adjusts to the ‘new normal’, thought will turn to how parties can protect themselves against a ‘second wave’ or future outbreaks. With that in mind, we have produced a set of sample contract amendments for JCT contracts that can be viewed here. We are also happy to discuss any particular projects and bespoke clauses that might be required to help protect you or a project. One thing’s for sure – this crisis is set to have long-term effects for the construction industry.

This article is from the July 2020 issue of Cornerstone, our monthly newsletter for those working in the construction industry. To download the latest issue, please visit the newsletter section of our website. For further information please contact a member of Birketts’ Construction Team.