The intensity and the frequency of extreme weather events is rising,1 and with it, the risk of delays to construction projects.
Snow, rain, flooding or strong winds might disrupt work, power supplies, or access to site. They may also result in delays to the transportation of materials in the supply chain. At the other end of the spectrum, extreme heat may limit working hours on site.
But who bears the risk of delays to a construction project due to the occurrence of extreme weather events? We examine the position in this area in detail below and provide some practical tips to minimise risk.
How bad does the weather have to be?
A contractor's right to claim in respect of delays caused by adverse weather is entirely dependent on the terms of the contract.
If the contract is silent and does not afford the contractor any relief due to adverse weather, then the risk will fall entirely upon him – however dreadful the conditions might be.
Most contracts, however, will expressly allocate risk for adverse weather. The choice of an (un-amended) standard form contract will determine how a weather event is treated.
JCT (Joint Contracts Tribunal)
Under the JCT suite of contracts, a contractor is entitled to additional time for "Relevant Events" – one of which is "exceptionally adverse weather conditions". But what does this mean and what does a contractor have to prove?
There is little legal authority or guidance on what constitutes "exceptionally adverse weather" which often leads to disputes. It is often helpful to define this by reference to specific data, e.g. comparing it with the meteorological records for the last ten years, in order to show that the weather encountered was "exceptionally adverse" within the meaning of this provision.
But what does this mean? Well, simply arguing that the weather was "worse than average" is unlikely to be enough because, in order to produce the "average", there must have been weather worse than that resultant average in the past 10 years. For example, a winter which is almost as bad as it was five years ago is unlikely to be regarded as exceptionally adverse.
Comprehensive records and reliable data evidencing the occurrence of "exceptionally adverse weather conditions" will be vital. Since 2018, joint JCT / Met Office purpose built-reports have been available and can be used to compare weather parameters from a location near to the project site, with long-term averages and 1-in-10 year values. These are intended to help identify weather conditions that fall outside of normal parameters and may be classified as "exceptionally adverse weather".
The key word is "exceptionally". The contractor is not entitled to an extension of time simply because the weather is adverse. The weather must be exceptional for that location, at that time of year, and crucially – as noted below – must delay the overall works.
NEC (New Engineering Contract)
Other types of standard form contract seek to provide greater certainty in respect of weather measurement. The NEC, for example, expressly adopts the approach described above, providing that if the relevant weather within a calendar month can be shown to occur less frequently than once every 10 years, then that may constitute a compensation event under the contract.
This is subject to strict compliance with the criteria set out by the NEC for recording "weather measurements" and comparing these to "weather data". Moreover, it is only the "difference between the weather measurement and the weather which the weather data show to occur on average less frequently than once in ten years" that is taken into account when assessing the compensation event.
In respect of snow, for example, the weather measurements to be recorded include the number of days where the air temperature is less than 0ºC and the number of days with snow lying at a specified time of day. As noted above, to be entitled to a compensation event under NEC the weather must be shown to have occurred on average less frequently than once in ten years – and it is only the extra number of days of snow or freezing temperatures over and above the average which will entitle the contractor to a compensation event.
FIDIC (International Federation of Consulting Engineers)
FIDIC Red and Yellow Books (2017) entitle a contractor to an extension of the Time for Completion if and to the extent that completion is or will be delayed by "exceptionally adverse climatic conditions". These are further defined as " adverse climatic conditions at the Site which are Unforeseeable having regard to climatic data made available by the Employer under Sub-Clause 2.5 ... and/or climatic data published in the Country for the geographical location of the Site".
Relief is likely to be available where adverse climatic conditions affect the Site but not, for example, where adverse climatic conditions elsewhere have delayed the delivery of plant or materials.
By contrast, in the FIDIC Silver Book (2017) for EPC / Turnkey projects, there is no entitlement to relief in respect of adverse climatic conditions.
Furthermore, as the intensity and frequency of extreme weather events rises, the threshold of what is "unforeseeable" or "exceptional" may also shift.
No delay - no claim
If the contractor has demonstrated that the weather was exceptionally adverse etc., then the next step to a successful claim will be to demonstrate that the weather actually caused delay: evidence will be required.
A contractor will be required to provide contemporaneous evidence to document the impact and duration of the adverse weather in order to satisfy the contract administrator that the weather encountered was "exceptionally adverse". This could take the form of, for example, weather reports for the relevant period along with site diaries and photographs.
Further, and most importantly, the contractor must show that the weather actually caused critical delay, i.e. delay to the end-date. Even exceptionally bad weather will not automatically give rise to an entitlement to an extension of time (EOT), without evidence that it actually caused critical delay. It is therefore important for good records to be kept; it will otherwise be difficult for the contractor to demonstrate the impact and effect of the weather.
Time but no money?
Under the JCT suite, if a contractor can satisfy the conditions described above, it will be entitled to an extension of time – but not money. While exceptionally adverse weather is a Relevant Event, it is not a Relevant Matter giving rise to an entitlement to loss and expense. This is also the case in FIDIC Red / Yellow Book, where the contractor will be entitled to an extension of time under Sub-Clause 8.5(c) if it can demonstrate that completion "is or will be delayed by" exceptionally adverse climatic conditions.
Where exceptionally adverse weather conditions occur, under JCT as well as under FIDIC, the risk is thus shared between the employer and the contractor: the contractor will benefit from an extension of time but will not recover the loss and expense inevitably associated. The employer, on the other hand, will be unable to withhold or deduct liquidated and ascertained damages for the late completion of the project, as so caused.
By comparison, NEC entitles the contractor to consequential loss of time and money, once adverse weather is proven and if specific objective criteria are met. However, the contractor bears the risk of any adverse weather which does not meet the strict criteria set out in the NEC.
Practical points to minimise risk
- Check the terms of the contract to clarify the allocation of risk and entitlement to relief for adverse weather conditions. Ensure the terms of any subcontracts are back-to-back with the main contract. Remember that, if nothing is said, the contractor takes the entire risk as regards his client.
- For greater certainty, consider specifying in the contract the objective criteria by which to measure the exceptional nature of the weather conditions, for example, by use of meteorological data.
- A contractor may wish to make allowances in its programme and contract sum for "normal" adverse weather.
- Ensure compliance with the notice provisions under the contract and notify problems/potential delays as soon as possible.
- Keep good records, both of the weather encountered but also its impact on site operations, for evidential purposes.
- For contractors, giving any required notices and other information on time and in compliance with all notice requirements in the contract. If it fails to do so, it may be barred from bringing its claim.
Footnote
1. Climate Change 2021: The Physical Science Basis | Climate Change 2021: The Physical Science Basis
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