Confusion reigns over Covid contract liability

Grant Prior 3 years ago
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Contractors and clients are still in the dark about who is liable for Covid related costs and time delays on projects.

Research from consultant Turner & Townsend found one in three firms fear their contracts were not fit to address the effects of the pandemic.

The survey showed that the majority of liability arising from Covid-19 events was believed to be held by the client rather than contractor.

But 45% of those surveyed reported an increase in contractual disputes since the start of the pandemic and 63% have sought contractual guidance from the government with another third turning to consulting industry bodies or other industry professionals for advice.

Nick Jones, Associate Director, Contract Services at Turner & Townsend, said: “The Covid-19 pandemic hit live projects with delays, site closures and reductions in productivity.

“Almost a year on though and we still do not have enough clarity on the liability within construction contracts.

“This needs to be addressed, and quickly, particularly with new projects coming online thick and fast as part of the push for economic recovery.”

“As contractors and clients alike now seek to recover losses incurred during the pandemic, it’s important to seek specialist advice.

“If 2020 has taught us anything, it is that all parties will now want to ensure clarity for Covid-19 event liability through the drafting of expressly worded contract terms, and the contractual ‘employers’ may also be looking to address the current imbalance of risk and responsibility for the future.”

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