29 May 2020

Coronavirus – Construction has never been 'off the table' – Part 1


Sarah Buckingham
Associate | UK

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Since 11 May, when the Government published its ‘recovery strategy’ and guidance for employers and workers to make workplaces safe during the pandemic, we have all been seeking clarity on what is to become the ‘new normal’ in all areas of our lives in both the short and the longer term. Prior to this easing of restrictions, for the majority of us in the UK, ‘lockdown’ was pretty clear and straightforward. For the construction industry, however, a consistent theme from the outset of the pandemic has been a lack of clarity from the English Government .

Conflicting statements at the end of March about site shut down swiftly followed by suggestions that work may continue provided workers could maintain a two metre distance, created uncertainty and what Construction News described on 6 April as a ‘patchwork of construction activity’ caused by leaving firms to ‘decide for themselves if work can continue in accordance with sketchy government advice’.

Mine of information or minefield?

Since then, in addition to the passing of the Coronavirus Act 2020 (under which nothing has been actually done) and The Health Protection (Coronavirus, Restrictions) (England) 2020 (as amended) (the ‘Regulations’), there has been a plethora of advice, guidance and government statements regarding social distancing and safe working (the most recent among them being the Government’s ‘Staying Alert’, ‘Staying Safe’, the ‘FAQs’ and the sector focused construction industry “Covid-19 Secure” guidance, published on 11 May). Unfortunately, the ever increasing number of pieces of government guidance (now 13), none of which takes precedence over the other, are not consistent and have no obvious link with the Regulations. In addition, the language used in the guidance is couched in terms of ‘recommendations’, ‘considerations’ and ‘tools to think about what you need to do’ rather than clear rules with which to comply, suggesting that individual businesses should decide for themselves whether or not construction work may
continue and how this should safely be undertaken. This presents both clients and their contractors alike with challenges to mitigate the effects of the inevitable disruption of social distancing.

The construction industry’s response

The construction industry has responded with its own guidance intended to introduce consistent measures. The Site Operating Procedures (SOP4), published on 20 May, is the most recent iteration of the Construction Leadership Council’s industry-recognised guidance. It includes guidance on travelling to work, safe access and egress, welfare facilities, planning work to avoid close working, and so on, and recent technical updates on working safely, such as one-way systems and the removal of the requirement for face-to-face contact to be kept to 15 minutes or less. It acknowledges that Government guidance references what ‘businesses should consider’ where social distancing guidelines cannot be followed in full, but itself clearly states that “The health and safety requirements of any construction activity must not be compromised at this time. If an activity cannot be undertaken safely, it should not take place”. In addition, the CITB and the CLC have released a whole library of comprehensive and interactive
checklists, forms, risk assessment templates and toolbox materials to help construction employers to apply the SOP3 and now SOP4 in practice. Although this guidance stops short of an actual set of hard rules, on a practical level at least help seems to be at hand, and both the client and its contractor should ideally work together to ensure that responsible (and not reactive) decisions are being made and that accurate records are being kept.

From a legal perspective…

But, legally speaking, where does all this leave the parties to the contract? As there is no single piece of advice or document which clearly sets out what parties must or must not do and the legal status of the guidance and its interrelationship with the Regulations is unclear, it raises the question of whether the guidance is just ‘guidance’. If it is a choice whether or not to comply with it, who bears the consequences if a party’s obligations under the contract become more onerous or even impossible as a result? It is hard to reconcile this with the Government’s position that it will be checking whether the guidance is complied with and that enforcement action will be taken if it is not – this feels more akin to an obligation to comply rather than a choice. As Sean Wilken QC of Keating Chambers has succinctly put it, “it’s complicated’!

It is therefore not easy to determine the impact that Covid-19 will have on projects and the interpretation of the construction contracts underlying them. The contractual mechanisms that a party might seek to rely on to obtain relief from its obligations and to transfer the risk to the other party might be force majeure, frustration, change of law or variation by necessity. For example, a contractor might cite force majeure as a reason for delay to its works and seek an extension of time (so relieving it from the requirement to pay liquidated damages). Causation is imperative, however, and the contractor would therefore need to demonstrate that the delay event has had a direct impact on its programme and that it has endeavoured to mitigate the effect of any such delay. It is fairly clear that a complete lockdown or the collapse of an entire supply chain would qualify as such trigger events but it is not so clear whether the impact of social distancing or crippling under-productivity on site as a result wou
ld. The harsh reality is that just because performance is more difficult or more expensive does not qualify it as a relief event. Ultimately, each case and claim is fact specific and will need to be judged on its merits once the full effect (and the guidance) is more clearly understood.

In Part 2, we look further at responses within the sector and, as we all hopefully start to see light at the end of the tunnel, what may potentially lie ahead for the industry.

Sarah Buckingham Associate | London

Category: Article