Colin Jones and Simon Wain of Hewitsons construction and procurement law team write:
The Government statement issued with the 23 March 2020 announcement introduces three new measures:-
- Requiring people to stay at home, except for very limited purposes.
- Closing non-essential shops and community spaces.
- Stopping all gatherings of more than two people in public.
The statement also included guidance as to how each of the measures is to be interpreted. In the context of a construction project we see that consideration needs to be given to a number of elements of the statement.
In the guidance, the staying at home measure is qualified by four exemptions including that which allows, “Travelling to and from work, but only where this absolutely cannot be done from home”.
The inference from this exemption is that it is accepted that some people will still be going to “work”, where that work cannot be done from home, and travelling for the purposes of undertaking that work (implicitly travelling to work and then home again). Given that construction work on a building site is not able to be done from home, construction projects appear to allowable under the new measures.
Another of the measures to consider is the third which reads, “3. Stopping all gatherings of more than two people in public”. The statement’s guidance on what this measure means is that it is to stop “all public gatherings of two or more than two people”.
Activities on a building site would not generally be regarded as a public gathering. Further in the guidance for the third measure the statement gives an exemption which says:
“where the gathering is essential for work purposes – but workers should be trying to minimise all meetings and other gatherings in the workplace”.
Applying this to a construction project supports the view that building site activity is not precluded by the measures but that COVID-19 social distancing on site, as with any other type of workplace, needs to be allowed for.
Ahead of a review of the detailed regulations which will be produced following the Government’s statement, and which may change our current interpretation, our view is that the new measures do not stipulate against many forms of operations which may take place on a building site.
When applying this in the context of one the standard form building contracts such as the JCT, a Contractor would not be able to claim an extension of time under the Relevant Event list in that contract which is based on change in the Statutory Powers.
Other considerations are whether regardless of the contract terms, the contract has become frustrated, due to events beyond the control of the parties and which were not in contemplation when the contract was entered into. Frustration is a tightly applied common law right and which if accepted would release both parties from further obligations under the contract.
Our view is that even now a contractor will still find it difficult to argue that the contract has been frustrated. While the new measures will undoubtedly make completion of works more costly or time consuming there are usually going to be mechanisms in contracts which cover such events.
That said, beyond any legal interpretation of the new measures there are further considerations when it comes to construction projects. The new measures need to be understood in the context of say, the expectations on all parties to a project to comply with the Construction (Design and Management) Regulations 2015 which seek to manage how projects are undertaken with regard to health, safety and welfare. Those involved in projects must consider how the Regulations are to be complied with in the case of any future or live project in light of the COVID-19 outbreak and what we are all now directed to do to tackle the virus and to avoid risks to health.
Also, all employers, whether the project employer, contractor, sub-contractor or otherwise need to give consideration to its statutory responsibilities to its employees which now include ensuring that relating to COVID-19 hygiene, social distancing guidance and that employees are not be exposed to risk in the workplace.
As the COVID-19 crisis continues, as inevitably more restrictions are imposed on social and economic activity, the less feasible it will becomes to undertake a construction project. Therefore, whatever the situation at present, now is the time for parties to be anticipating the total shut down of projects.
For more information on any of the items raised in this article please click here to email Colin Jones or click here to email Simon Wain in our construction and procurement law team.