Practical Law

A client recently called me in a panic. Their contractor had discovered a protected species of bird had set up home in the exact spot where they needed to carry out the next phase of works at one of their sites. No one on site was entirely confident on what the appropriate next steps should be and so the client, concerned about the potential consequences, had immediately instructed the contractor to suspend works and asked me to investigate. 

Statutory position

My first step was to check whether this particular species of bird was actually legally protected. There are many different protected animals and what is or is not permitted in relation to development works varies from species to species. In addition, there are also numerous statutes that could apply, such as the Wildlife and Countryside Act 1981 and the Conservation of Species and Habitats Regulations 2017, so it can feel a bit overwhelming trying to find the appropriate legislation.

Fortunately Natural England, the government body responsible for protecting England’s natural environment, has published a series of standing advice guidance notes for planning authorities, which provide a useful starting point. Natural England’s base position is that developers should not do anything that negatively affects a protected species. However, in certain situations, which are looked at on a case-by-case basis, they are willing to issue a wildlife licence (at the recipient’s cost) to permit activities that would otherwise be unlawful. There are different categories of licence and the type required depends on the species in question and the relevant activity. If the activity affects a European protected species, then there may be additional European regulations which apply.

The consequences of carrying out development activity that affects a protected species without a licence, or in breach of the terms of a licence, can be severe. Generally any such breach will be a criminal offence and, depending on the relevant legislation, it may also be an offence just to “knowingly permit” the breach. This is key in a development context as developers cannot just assume that they can wash their hands of a situation and leave it to the contractor to deal with.

Some key considerations

My client’s position was simplified to some extent as Natural England refused to issue them a licence. Natural England’s view was that the birds were migratory so this was only a temporary situation. This was obviously not ideal as it meant that works had to stop for a few weeks. Naturally my client’s next question was who bore the risk for this delay under the building contract (an amended JCT Design and Build Contract, 2016 Edition). Unsurprisingly, the building contract did not expressly consider the possibility of the discovery of a protected species after works had commenced. However, the following provisions seemed most relevant:

• Compliance with statutory requirements. JCT forms of contract require contractors to carry out and complete the works in compliance with all statutory requirements affecting the works, including all relevant environmental legislation. The unamended JCT position is that it is generally the contractor’s responsibility to ensure that the Employer’s Requirements and Contractor’s Proposals are compliant with all statutory requirements. If these documents need to be modified after the building contract has been entered into, the contractor will not be entitled to an extension of time or additional loss and expense, save in a couple of limited circumstances, for example, change in law after the Base Date and planning authority decisions (see below).
• Planning. The unamended JCT position is that it is the employer’s responsibility to obtain all necessary planning consents and if the Contractor’s Proposals need to be modified as a result of a planning authority’s decisions made after the Base Date, the contractor may be entitled to an extension of time or additional loss and expense. Parties often agree to amend the standard JCT position and allocate responsibility for obtaining specific consents between each other. However, unless the parties are aware of the presence of a protected species before works begin, it is unlikely that they will have specifically addressed the possibility of obtaining appropriate wildlife licences. Therefore, it is important the contract makes it clear who is responsible for obtaining any additional consents which are not expressly identified in the Contract Documents.
• Site condition risk. The standard JCT form contracts do not include express provisions setting out which party is responsible for existing site conditions. Where a building contract is silent, the common law position generally sees the contractor take full site condition risk. However, this is subject to any carve outs that may be included in any of the other contract documents. Where parties agree to amend the JCT standard form, they will typically add a clause setting out the extent of the contractor’s responsibility for the existing site conditions. Depending on how widely such a clause is drafted, this could extend to environmental conditions such as the presence of a protected species.
• Possession. Generally under JCT forms of contract, the employer is required to give the contractor possession of the site so it can carry out the works. If the employer does not provide the contractor with appropriate possession, the contractor may be entitled to an extension of time or additional loss and expense if it is subsequently delayed in completing the works. Accordingly, whether the presence of the protected species is discovered before or after the date of possession is potentially key to allocation of the risk.
• Force majeure. There is also an argument that the discovery of a protected species on site after works have begun could be considered a force majeure event. The standard JCT form contracts do not define “force majeure”, but case law suggests it may be difficult for a contractor to successfully establish this. In any event, under an unamended JCT form of contract, a force majeure event would only entitle the contractor to an extension of time, not additional loss or expense.

Final thoughts

My client’s and their contractor’s concerns following the discovery of the birds were valid. The consequences for breaching the relevant statute, even inadvertently, could have been serious. The client’s immediate reaction to instruct the contractor to suspend works at the relevant part of the site was very sensible.

While the building contract did not expressly address which party bore the risk of discovery of a protected species, it was likely, given the specific circumstances, that this issue was the contractor’s risk. However, recognising this was a slightly unusual situation and keen to keep the contractor invested in completing the rest of the project, the client reached a commercial agreement with the contractor whereby the parties shared the “pain” of the resulting delay to the works.