considered how this can be enforced along the supply chain and seems unaware of the UK Government’s policy that PBAs must be used unless there are compelling reasons not to do so. Recent advice published by the
Scottish Government goes further: Public bodies should consider direct payments to subcontractors in the event of failure of a Tier 1 contractor to discharge payments. There is a possible option in the
event that we and other sectors become bogged down in disputes that will hinder the recovery process: The UK Government could consider using the Civil Contingencies Act 2004. Under this, a senior minister can introduce regulations where an emergency is about to occur, is occurring or has occurred to mitigate or control an aspect or eff ect of the emergency where the need to do so is urgent. In principle, such regulations could be drafted to suspend indefi nitely claims and counterclaims directly due to the lockdown and even require the immediate settlement of debts incurred prior to and during the lockdown. Much will depend on the extent to which the economy is convulsed by contract disputes arising out of the lockdown. Most fi rms will now want to focus on their exit strategies from the current nightmare. The landscape they will face will be littered with prematurely terminated contracts, huge storage costs, payers on the brink of insolvency and signifi cant remobilisation costs. Drawing all this together in order to recalibrate business priorities will be a daunting prospect, especially for SMEs. But, even now, fi rms are still bidding for future work. When signing off contracts they will need to consider protecting themselves in the event of continued interruption to supplies or inability to resource work as a result of employees having been laid off .
i
Article reproduced by kind permission of
www.building.co.uk For advice on contract issues,
please contact SELECT on 0141 445 5577 or email
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CABLEtalk JUNE/JULY 2020 33
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