Practical Law

The human impact of this winter’s extreme weather has been telling. Householders, farmers, businesses small and large have all been affected. Many building sites will be waterlogged, if not flooded, hindering heavy plant access and causing myriad practical issues, if work is to continue. Urgent repair and remediation projects must start straight away, often with teams hurrying to help those in need, while contract terms take a back seat. Although many potential legal issues caused as a result of these events will be solved by time and cool heads, if the weather now improves, legal stock-taking may be one part of your response.

Adverse weather

We’ve looked before at adverse weather on this blog and on our website. While some of the contracts have changed (notably the JCT 2011 editions), the key terms and issues are very much the same. In summary, it may be helpful to separately consider:

• Is the contractor entitled to time and money? (See Practice note, Loss and expense claims in a construction contract.)
• How bad does the weather have to be? Is that a question of judgement, or must the parties refer to specific data?
• Did the weather actually delay the project? Was there another cause? (See Practice note, Time for completion and extension of time.)
• Is the contractor entitled to relief under any other contractual provision?
• Has the contractor given notice on time? Is the notice in the right form?

Has one or more insurance events occurred?

Under a typical construction all risks (CAR) insurance policy, a “flood” or a “storm” would allow for a claim. However, by themselves, extreme weather conditions (which were not a flood or storm ) would not. As such, practical steps may include:

• Being certain who has insurance responsibility for the works.
• Notifying insurers (or checking insurers have been notified).
• Keeping contemporaneous records and photos.
• Allowing time for additional meetings or correspondence with, for example, loss adjusters.
• Giving any necessary contractual notices, as well as notice to insurers.

Form a clear initial picture of a sequence of events

The combination of some or all of storms, heavy rain, flooding and damage to infrastructure could create a complex picture, even on a relatively straightforward project. Consider any interaction between insured and non-insured events and develop a clear sequence. What actually occurred and when? What is the evidence?

For example, a single project could have suffered from:

• Storm damage.
• Severe weather, which prevented work.
• Closed or damaged infrastructure, preventing access to the site.

One of those events may be an insurance event, one may show why initial insured losses then multiplied (if a second storm made things worse), and another may be a contractual trigger point for an extension of time or loss and expense claim.

Stick to the evidence, but be prepared for your initial assessment to change as more detail comes to light.

Don’t be automatically put off by different contract forms

If you are asked to carry out urgent work, without detailed tenders, under an unusual contract form or variant, if that contract is published by one of the major contract publishers, the chances are you will be familiar with the majority of its terms. For example, remediation works may be procured on a costs plus basis.

However, despite the overall familiarity of clauses within the same family of contracts, it is nevertheless important to identify the key differences that do matter. Differences could affect:

• Who is to insure.
• How you get paid or what you have to pay.
• Who sends which notices in response to which events.

If a dispute does arise

If your project suffers from a difference of opinion or outright conflict that cannot be resolved by negotiation, go back to basics and be clear in your communications. To the extent you can, marshal your evidence.

Tactics are all important. If a dispute does arise, think carefully before starting an adjudication. Given what may have happened, are you actually ready to deal with a dispute in the statutory time frame? Conversely, bear in mind that the other side may see this time as an opportunity to get in first, to apply pressure, and start an adjudication against you.

An on-going adjudication could cause particular difficulties because of its tight time-frames. If you cannot respond in the usual statutory period (if your office has been flooded or you have no access to site records), say so, but be specific. The other side or the adjudicator may look with some suspicion at a letter or email that states:

“My response will be delayed due to flooding.”

However, a detailed communication may be more persuasive:

“I was unable to access contemporaneous records (including site diaries, copy orders and site progress photographs) held on site due to flooding. The flooding began on [DATE] and I was able to first access those records on [DATE]. The laptop holding the site diary has been damaged by floodwater. I have a copy of the December 2013 diary stored electronically off-site, and I estimate that copy will be available to me from [DATE]. As a result I request an extension of the usual period of [14] further days to [DATE]…”

Remember though, there is no compulsion on the other side to give you the time you ask for.