For the Construction Confederation, the fuel crisis has meant a week of close discussions about the consequences of the blockade. Indeed, our arguments persuaded the government to license the general use of red diesel.
I don’t intend to get involved in the rights or wrongs of the action but now that the worst would appear to be over, the legal and contractual consequences are coming home to roost. Over the past couple of weeks, the confederation has been advising its members on the contractual implications of the delays caused by the crisis and the employment implications where labour has had to be laid off. Although the rights of a contractor will depend on individual contract terms, the standard forms are a good starting point for analysis.
The extension of time provisions in the JCT forms have been criticised for complexity and duplication. However, when events such as these overtake the industry, the importance of those provisions becomes clear.
Under the unamended JCT contract, contractors would be entitled to claim an extension of time under clause 25.4.10: the unavailability of labour goods or materials. However, this is one of the most frequently deleted provisions.
Where this has happened, contractors will have to establish a right to claim under one of the other relevant events clauses. These include:
- Clause 25.4.4 Civil commotion, local combination of workmen, strike or lock-out affecting any of the trades employed on the works or any of the trades engaged in the preparation, manufacture or transportation of any of the goods or materials required
- Clause 25.4.1 Force majeure.
Under the first provision, it is arguable that the protesters amount to a “local combination of workmen” whose actions have affected the transportation of goods and materials.
However, if the real cause of delay is the lack of men on site, the only option left is force majeure. This clause is rarely deleted because it is so rarely used that the industry seems to have forgotten what it means. It is not limited to an act of God and in Lebeaupin vs R Crispin & Co (1920), it was defined as all circumstances independent of the will of man and that it is not in his will to control. This would seem to cover the consequences of the fuel crisis quite neatly.
Before clients start arguing that this is not a fair risk allocation, an extension of time under this provision does not allow a contractor to claim consequential loss and expense – it is only relieved of the obligation to pay liquidated and ascertained damages. As such, the cost of the fuel crisis would be shared between clients and contractors, which is surely right for such unforeseeable events.
Clare Edwards is director of legal affairs at the Construction Confederation.