Contractors need to look carefully at extension of time and loss and expense clauses to see if snow and freezing temperatures entitle them to more time and money.
Adverse weather conditions (again)
Last year, in January and February 2009, parts of the UK suffered from heavy rainfall and flooding. At that time, we looked at whether a contractor could claim time and money under its building or engineering contract, as a result of bad weather. Despite the subsequent publication of Revision 2 2009 to the JCT Standard Building Contract and Design and Build Contract, the comments in that update still stand today.
NEC3 and snow
One thing we might add to last year’s update is that the NEC3 ECC specifically refers to whether snow is lying on the ground at a particular time (and the number of days with sub-zero temperatures), when determining whether the weather has caused a contractual “compensation event”.
“There are potential problems with the NEC3 approach to weather measurements. First, there is no reference to the amount of snow which has fallen… there is a huge difference between a light sprinkling of snow and heavy snow necessitating closure of the site, yet the contract does not differentiate between them. Secondly, the place where the weather is to be recorded is to be set out in the contract, and therefore may not be the site. If snow is lying at the site, but not the place named in the contract, there would be no compensation event…”
Since Spring 2009, PLC Construction’s resources have expanded, and we now have more information on claiming an extension of time and/or loss and expense in two practice notes, contributed by barristers at Keating Chambers:
SMEs may be hardest hit
Of course, adverse weather conditions can affect projects of all sizes and now, just as in 2009, the 2012 Olympic and Paralympic Games site has featured in recent press reports. However, provided that construction work at the Olympic site continues on its current trajectory, the Olympic project is fully funded and due to complete in good time. It is small and medium-sized enterprises (SMEs) in the construction sector who are most likely to suffer enormous financial pressure due to the massive downturn in construction work in 2008 and 2009, combined with a weather-related bad start to 2010.
In his Brickonomics blog, Brian Green looks at the possible impact of the current freeze on construction activity in the wider economy.
What to do now?
Check the terms of your particular contract and work out what you are, or are not, entitled to. In addition:
- Protect yourself as far as you can by making sure any notices you must give are given accurately, completely and on time. For example, do you need to follow up with more detail after you have given an initial notice? Have you sent a notice by one of the methods set out in the contract?
- If possible, look to recover lost time, to mitigate any LADs claim from the employer if an application for an extension of time is not successful.
- Keep good records, as far as you can, even if you are not actually on site due to the weather. If you are on site, take photos. Remember that you may need to demonstrate that the adverse weather caused a delay, not just that adverse weather happened.
- If you have a good working relationship (between employer and contractor and/or between contractor and sub-contractors) use it to agree now how to deal with any delay caused by the current weather conditions. Record any agreement that you reach in writing. Be prepared to compromise: if the parties are both operating under tight financial margins, the management time and legal costs of a dispute can be particularly damaging to both parties.