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COVID-19 Construction Contract Claims: The Now And The Future

AUTHOR(S): Rhona Henry, Kimberley Masuda
KEY CONTACT(S): Rhona Henry, Kimberley Masuda
PRACTICE AREA GROUP: Construction and Engineering
DATE: 10.07.2020

Matheson’s construction / infrastructure specialists have taken the temperature of the construction sector with respect to existing / ongoing Covid-19 claims in the industry with some very interesting and consistent results. We asked key stakeholders in the industry a number of questions in relation to the willingness of employers to give extensions of time / costs on foot of the government shut down of construction sites, together with some other related questions, with results as follows:

Question: Are employers generally showing a willingness to give extensions of time for the government shut down of construction sites and the implementation of the new safety measures even where the works contract does not provide for the granting of extensions of time for these types of event / circumstances?

No - Only where provided in the contract – 27%

Yes - 73%

Question: Question: Are employers generally showing a willingness to cover at least some of the costs associated with the government shut down of construction sites irrespective of works contract provisions?

Yes – 27%

Yes – but only the costs associated with preliminaries  - 55%

No – 18%

Rarely, on a case by case basis. – 0%

Question: Generally what sort of time period has the government shut-down of construction sites and compliance with new safety measures / the CIF Statement of Practice (the “CIF SOP”) added to contractor works programmes?

Less than 3 months –  45%

Between 3 – 6 months – 55%

More than 6 months – 0%

Question: How long are contractors making provision for the new safety measures / the CIF SOP being maintained in place on construction sites?

Less than 6 months – 0%

Up to a year – 9%

For the duration of the programme – 91%

The answers to these questions witness for us that notwithstanding the fact that extensions of time for the government shut down of construction sites and the implementation of the new safety measures are not generally not extension of time (or loss and expense) triggers / events in construction contracts now, over three quarters of poll participants confirmed that employers are willing to grant extensions of time and over half of employers are open to making payments associated with preliminaries. In addition, over half of the contractors polled agreed that the government shut-down of construction sites and compliance with new safety measures / the CIF SOP would add between 3-6 months to the contractors programme.

The results of this Matheson poll are very telling and in our view, a solid representation of the wider industry approach.

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