Coronavirus and construction

Employers and contractors have much to consider when trying to mitigate the effects of coronavirus on business. Here is a list of questions to prompt your preparedness:

Business planning – what key parts of your business’ operations will need a Plan B?

Health and safety – obligations to your employees or workforce, particularly if they are working on site (e.g. are appropriate hand-washing facilities available, do you need to provide equipment or training?)

Site lockdown – what will you do if your employees contract coronavirus, and if you do shut down works on site how do you do so quickly and safely?

Understanding your supply chains – where are labour and materials coming from? Are key materials being sourced from a country known to be particularly badly hit by the disease?

Contract review – what do your contracts say about:

  • use of alternative suppliers or materials
  • force majeure – including for epidemics or pandemics
  • relevant events enabling claims for extensions of time and additional money
  • delay and liquidated damages
  • rights to terminate the contract?

Frustration of contracts – where a serious, unexpected event occurs that is beyond the parties’ control, making it impossible to perform the contract. Note that this is a difficult argument to run in court.

Open discussion – perhaps the best option is to negotiate and agree a way forward that will work for everyone without reverting to confrontation or dispute?

Funding arrangements – if you have funding in place, what does your funding agreement say about delay, additional costs, material changes (to the programme, the works or the construction contract) and notifying the funder? 

Other agreements – does delay under the building contract have a bearing on other agreements the employer may have in place, such as development agreements or agreements for lease?

Insurance – do you have any insurance policies that could help you recoup any losses? 

If you are concerned about coronavirus, please follow the government guidance at bit.ly/BEcovid-19

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