We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
Scott McKinnell looks at whether you might be entitled to extra
time and money to complete your works as a result of strike
action.
The construction industry like other parts of British society
has been hit by the recent strikes on 30 November, whether relating
to increased time for equipment, materials and labour to arrive on
site due to difficulties with transport, or in some cases, due to
staff being unable to deal with their normal duties due to short
notice childcare arrangements.
The present generation of construction professionals have not in
many cases had to deal with this before and faced with the prospect
of further industrial action over coming weeks and months, are now
having to consider what may in many cases be a significant impact
on the progress of works on site and the implications that this may
have for the extra time and cost that it takes to complete
works.
The degree to which parties can rely on the impact of strikes
will vary according to what the choice of contract form has been
and the provisions may, unlike the picket lines, not be quite as
clearly drawn as the parties may have expected. The position also
varies according to which standard form contract is being used.
The two most commonly used forms of contract in the industry are
currently JCT and NEC.
The JCT Standard Building Contract, Design and Build Contract
and Standard Building Subcontract all list a strike as a relevant
event entitling a contractor to an extension of time. The
contractor has an obligation to notify the Employer of the strike
and this obligation arises when it becomes reasonably apparent that
the works are likely to be delay. The contractor must also use his
best endeavours to prevent any delay or further delay as a result
of the strike action. Whether these requirements have been
satisfied will depend on the individual circumstances and may be
open to interpretation.
However, a strike is not a relevant matter for the purposes of a
loss and expense claim. Therefore, whilst the contractor may be
entitled to additional time, he is not entitled to additional
money.
Under NEC 3 contracts the Contractor is potentially entitled to
both additional time and the potential for additional money as a
result of delays to the works caused by strike action.
Under NEC 3, so long as the strike is not confined to the
contractor's employees it will be an employer's risk under
the contract and therefore a compensation event entitling the
contractor to additional time and money. The additional costs
however only relate to loss or damage to the Works, plant and
materials – the employer's property. The contractor
carries the risk of loss or damage to his own property. This
may not go as far as entitling the Contractor to additional money,
particularly if there is no loss or damage to the Works, plant and
materials.
The Contractor may also seek to rely on Clause 60.1 (19) , by
saying that an event has occurred which stops the Contractor
completing the works or completing the works by the date shown in
the Accepted Programme and which neither party could prevent, which
an experienced contractor would have judged at the date of the
contract as having had so small a chance of occurring that it would
not have been reasonable to have allowed for it, and which is not
one of the other compensation events in the Contract.
It seems, therefore, that whilst the strikes themselves might
have defined positions, the provisions dealing with their effects
within the standard contracts leave room for manoeuvre on the part
of both the employer and the contractor. So in standard form
contracts the picket lines are not so clearly drawn, and it is
worth carefully scrutinising the position before making a claim for
extra time or money, particularly as the standard forms are often
also subject to bespoke amendments on a project specific basis.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
A discussion which highlights the main aspects which should be taken into consideration by an organisation or individual who is looking to undertake work in a territory other than in its home.
Lord Justice Jackson’s cost reforms came into force on 1 April 2013. Though primarily aimed at personal injury litigation, the reforms will affect construction and engineering litigation.
The Court of Appeal has recently refused to amend a legal charge registered at the Land Registry, even though it would have given effect to the parties’ common intention (which had been mistakenly missed out of the charge).
With the current economic climate, landlords are increasingly finding that they have vacant units which they will often wish to secure occupation of on a short term basis, while they market the unit for a longer term let.
Following Judge Pelling QC’s decision in Leisure Norwich (2) Limited & Others v Luminar Lava Ignite Limited (in administration) & Others [2012] EWHC 951 (Ch) (reported in the June 2012 edition of BDB’s Property & Insolvency Bulletin), rent which is incurred prior to a tenant going into administration must be proved like any other pre-administration debt and cannot be paid as an expense of the administration.
The construction sector accounts for nearly 10% of the UK economy and the Government frequently emphasises the important role the sector will play in achieving economic growth.
For many years the appeal courts have been concerned with determining what character of building is a 'house' for the purposes of enfranchisement rights.
The FIDIC Contracts Committee has issued a Guidance Note dealing with the powers of, effect of and the enforcement of Dispute Adjudication Board (DAB) decisions.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
