By John Stocker
Let’s assume you have a project where you have used the JCT 2016 Design and Build form of contract, with little or no amendment, how would any delay caused by the COVID-19 virus be dealt with you may ask?
Firstly under clause 2.24, it should already be apparent that COVID-19 might delay time sensitive obligations and all contractors should either be seriously considering or have already given notice under this clause to the Employer. In this notification, the cause of the delay and the specific relevant event will need to be identified. One could start with providing notice under the force majeure provision in 2.26.14.
A few preliminary obligations bear mention. One should bear in mind, also, that under the JCT form there is an automatic obligation on the contractor to use his best endeavours to prevent delay however caused. So blind notification while doing nothing else, is not advisable. Having an impacted programme handy might help.
Also obligations to protect the site, if included, should be considered as any damage to the site during the period of delay will inevitably end up on the doorstep of the contractor.
Oddly a force majeure event in the (unamended) JCT 2016 D&B form is not formally defined. As UK is not a civil code jurisdiction a formal definition of force majeure does not automatically apply as it does elsewhere like in France for example. You may ask so why does this matter? Well, simply put, if there’s no agreed law or term setting out what force majeure actually means, this renders relying on the term entirely up for debate!
Consequently, to avoid this problem on future contracts, it is recommended that all future contracts include a formal definition of force majeure (including pandemics) which should be something along the following lines:
“A Force Majeure Event means any circumstance not within a party’s reasonable control including, without limitation (a) acts of God, flood, drought, earthquake or other natural disaster; (b) epidemic or pandemic …”
It is important to note that JCT also includes under point 2.26.12 a provision giving relief to a contractor if a government shuts down construction projects after commencement (as I understand has been done in the jurisdiction of Luxembourg in Europe for example due to COVID-19).
However what if the government of the UK does not formally shut down projects by formal instruction but simply restricts travel in public? This complicates the cause and effect notice a little.
The solution is to take good advice on what to do as the circumstance dictate the response.
While it is likely that some debate and argument might arise over whether force majeure applies (especially if there is no contractually agreed formal definition including a pandemic), one thing is certain and that is that all parties should not assume that they will get relief and take suitable advice on what the best course of action is.
There is also the argument of frustration under UK law which simply put gives relief where performance is hindered unfairly.
It is advisable to communicate regularly about the effects of any delays due to COVID-19 and to impact programme evidence and keep up to date on the evidence so that if things take a turn for the worse, there will be demonstrated evidence of the effects of the delay.
One should not rely entirely on the UK operation of frustration, which might give contractors relief from their obligations, and taking advice on the correct course of action is critical.
In times of difficulty it’s always the best policy to communicate with clarity and give specific notifications under a contract and in a delayed construction contract, let under the JCT 2016 Design and Build form, open communication about the pandemic is no less critical.
John Stocker is a specialist construction, engineering and major projects lawyer with 18 years of experience advising in the ﬁeld and who speaks regularly at conferences and seminars and has published several articles.
John is admitted to practice in England and Wales (2003) and in the High Court of South Africa (2002).
The information in this article is not to be taken as legal advice and is for information purposes only. Detailed legal advice should be taken on all matters before relying on any statements made herein.