It is of course difficult if not impossible to predict the future impact of Covid-19 on productivity, time and costs. There are a myriad of direct and indirect factors that will impact the ability to take a project to completion. This will continue for some time, as the knock on effects of unavailable specialists materials and trades could become increasingly pronounced, for so long as the supply chain remains out of sync.
We have been experiencing enquiries in existing construction contracts whether contractors are able to claim time and expense for delays caused by Covid-19. As ever it depends on the precise terms in each case, and also how employers are prepared to treat such events. Existing contract terms do not necessarily provide relief under force majeure for example. As far as we can see, employers in the main seem to be acting reasonably so far certainly with regard to extensions of time, but the ability to claim under new contracts, whether for time or expense, will need to be expressly provided for - ‘unforeseeability’ will no longer be able to be prayed in aid, although further changes in the law may be. This may well change the type or basis of contract being used.
A number of people are actively considering the role that a costs plus based arrangement can have in fairly sharing risks. Such arrangements allow an element of hindsight to be applied, when assessing whether costs were reasonably incurred in the circumstances that actually occurred, as opposed to trying to price for what remain very uncertain conditions in the coming months.
