concern


Analysis of first clause In England the Health Protection (Notification) Regulations 2010 have been updated to include SARS – Coronavirus 2. Similar regulations exist in the devolved jurisdictions such as Part 2 of the Public Health etc. (Scotland) Act 2008. So, what is the first clause actually saying? ●In general, you are to assume all the COVID-related risks impacting upon your sub-contract works, even though you are unlikely to be in a position to avoid/manage them or insure against them ●This is irrespective of whether the impact on the main contract works is “direct or indirect”. “Indirect” could, for example, refer to the precautionary shutting down of a site because workers have been taken ill with COVID-19 on another – unrelated – site some five miles down the road ●Through no fault of your own, you could be liable to pick up some or all of the main contractor’s liquidated damages if it has not been given an extension of time by the client, or if it has not been given the extension applied for.


Analysis of second clause Your price is expected to include “the risk of COVID”. The immediate question is: what does this mean?


“You could be liable to pick up some or all of the main contractor’s liquidated damages if it has not been given an extension of time”


Since it is so open-ended, pricing for


COVID risk would require the services of a clairvoyant. You then take on the risk of maintaining productivity even though social distancing is in force. So without fault on your part, if you can’t social distance – and have to cease work until you can – you will be in breach of contract when your productivity suffers. For such a clause to work there would


have to be some benchmark to measure the requisite productivity. The costs over an eight-week period


of lockdown could be phenomenal, with cancelled deliveries, storage costs, salaries and overheads etc. In this context you would want the right to terminate your contract. From week nine onwards, reasonable


costs can be recovered provided you have used “best endeavours” to reduce delays. This requires you to do everything you reasonably can which could include, ironically, incurring extra costs in order


to reduce delays – plenty of scope for argument here. It would have been better if the clause had specified the steps required to be taken.


Advice for SELECT Member firms Apart from the myriad disputes these clauses are likely to engender, they import risks which, for the most part, you will not be able to manage. For the sake of efficiency and fairness, risks should always be allocated to those best able to manage them. Therefore, seek to either negotiate them out of your contract or, at least, seek to define with more precision the risks you are being asked to take on. If you are likely to be saddled with


ongoing costs in the event of disruption to your works, make sure that you have a right of termination in these circumstances. Perhaps you could make clear at the outset that your price does not take into consideration COVID-related risks.


CABLEtalk DECEMBER 2020/JANUARY 2021 39


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