COVID-19 Task Force publishes guidance on minimising construction disputes
The Construction Leadership Council has urged the industry to work together to constructively resolve contractual disputes arising from the pandemic.
The guidance is endorsed by the Government, reflecting the national interest in protecting jobs and the economy.
Recommendations include:
- Parties should discuss whether extensions of time can be granted and additional costs shared (although it is imperative that contractual mechansims are strictly followed until agreement is reached).
- "Without Prejudice" negotiations can be used to create a safe space for collaborative dialogue.
- Parties should consider waiving any termination triggers and/or mutually agreeing to temporarily suspend works if necessary.
- Valuations could be adjusted to assist contractors and their supply chains, with employers taking other forms of security.
The guidance includes useful pro-forma letters and contractual notices for the parties to use.
In practice, we have seen employer and suppliers adopting a wide range of responses, from collaborative engagement to the first COVID-19 related disputes, often driven by the financial concerns of the respective parties
There is a real concern that the construction (including maintenance) industry will become embroiled in costly and long-running disputes over the effects of COVID-19 on projects if it does not look to engage in collaborative discussions to try and resolve such issues as and when they arise.