Tier 1 contractors need to look after their supply chains in this hour of need
Amid all the confusion and chaos surrounding the impact of covid-19 on construction, little account is being taken of the contractual implications for those in the supply chain.
While, at the time of writing, the official advice (for England) is to keep sites open, this is posing grave difficulties for subcontractors.
“Social-distancing” will often be impractical, especially where site activity is not in the open space. Personal protective equipment is unlikely to be easily available. Most employers (as well as employees) among the specialist trades will have deep-rooted fears for the safety of the workforce.
But the moment that they decide to suspend their work on site, they will face claims for breach of contract. Seeking relief through the devices of force majeure and common law frustration would be an entirely academic exercise.
Force majeure clauses are unlikely to be found in bespoke or amended standard contracts.
Most firms in the supply chain will not have the resources to fund what could be very expensive legal proceedings
Claiming common law frustration will also be a fruitless quest if the outcome is simply that the contract has becomes more onerous and expensive to discharge because of delays due to site stoppages.
In any event most firms in the supply chain will not have the resources to fund what could be very expensive legal proceedings to resolve such contentious issues.
This is a good time to remind clients and tier 1 contractors of their duty under section 3, Health and Safety at Work Act: where their activities are carried out in such a way that harm could result to people other than their own employees they must, so far as reasonably practicable, adopt measures to reduce or eliminate the risk of such harm.
Rudi Klein is a barrister and CEO of the Specialist Engineering Contractors’ Group and was responsible for the drafting of the Aldous bill. He has been campaigning for over 30 years to achieve reform of the practice of retentions