COVID-19 – if sites close, what next?

As this is a fast moving topic, please note that this article is current as at 27/03/20. For further information, please contact Helen Johnson or Helen Birchall.

This article was co-authored by Tegan Johnson, Solicitor Apprentice, Sheffield.

After the initial confusion following the announcement of a nationwide “lock-down”, the Cabinet Office has confirmed that (for the time being) construction projects may continue, subject to sites being able to comply with Public Health England’s advice.

However, it is easy to foresee a more stringent lock-down being put into place, under which construction projects cannot continue. Furthermore, developers and contractors alike should consider whether they can in fact comply with social distancing requirements and their wider health & safety obligations whilst keeping sites open. A number of firms have already begun to close their sites – for example, Transport for London have announced that work on their sites and Crossrail sites will also be suspended imminently, unless they are required to stay operational for safety reasons.

If site closures become an enforced reality, all involved parties will have work to do, both to ensure that the site is left safe and secure, and to protect their own contractual positions. We have pulled together some key practical and contractual considerations for all parties to consider in this situation.

Practical considerations

• All companies will need to organise for their staff to work from home if possible, or organise other off-site work. This may include use of new, more extensive technology, and potentially greater levels of innovation as a result.
• One obvious priority will be making sites safe and secure to be left for the foreseeable future. This is important from both a practical and health and safety perspective. Sites should be secure enough to prevent trespass onto the site, damage to the project or theft of materials while they are left unsupervised. It is also important to ensure safety of any passers-by, particularly for sites where there are public footpaths and rights of way near site boundaries.
• Supply chains must also be considered. Companies will have to either postpone deliveries or ensure safe storage of the items after delivery. It will be important to agree commercial solutions with supply chains (chains which are likely to already be suffering from delays as a result of the virus).
• For companies to reach the best possible outcome on site, they will have to co-operate, finding commercial solutions to potential issues. For example, making payments early to assist sub-contractors with cash flow could prevent insolvencies and be beneficial to all parties in the long run.

Contractual considerations

• All parties should check the notice provisions in their contracts and insurance policies and serve notices where necessary.
• Keep records of information that might become useful such as delays, costs, important dates and any agreements reached or measures taken with other parties. It may also be useful to request similar levels of information from sub-contractors.
• If appropriate, agree formal amendments to contracts. A co-operative approach in this regard should reduce costs.
• Look to mitigate delays and cost wherever possible, as this is usually a contractual obligation and will assist in any future claims.
• Be aware of contractual relations both upwards and downwards in the supply chain.
• If you don’t have a contract in place, utilise the time off-site to draft and agree a contract which explicitly deals with COVID-19 and associated issues.

Comment

With a practical, collaborative approach to the challenges that site closures may bring, all parties are likely to fare better in weathering the COVID-19 storm.

Related item: COVID-19: UK construction – will now be the time for collaboration?