COVID-19 – Contract Claims


We would like to reassure you that it is business as usual for MPG.  However we have received a number of concerned calls from clients and in response have drawn up the help list of bullet points below:

Look at the operational provisions of your contract:

  1. Are you obliged to submit a revised programmed due to disruption or notify your client;
  2. Does your contract obligate you to give early warnings of delays, if so you must do so promptly;
  3. Does your contract require regular progress reports, if so clearly set out impacts the disease has on the project.

Can you make a claim?

The starting point for your rights and obligations, should you find yourself affected by Coronavirus, will be your contract. None of the standard form contracts (e.g. JCT and NEC3/4) refer expressly to epidemics or spread of diseases.

Outbreak of illness does not fall within the meaning of “excepted risks” used in most of the standard forms so, contractors may have to rely on other clauses in the contract such as suspension, force majeure and prevention, or change in law.  Contractors may not be able to point to one clause for a full remedy, and may have to rely on multiple provisions – used in conjunction with the common law – in order to be granted both time and money.

What about common law remedies?

Contractors may also consider common law remedies but the primary basis of entitlement should be the relevant and applicable terms of the contract.

Is it Force Majeure?

Does your contract contain force majeure clauses, unexpected circumstances outside a contracting party’s reasonable control.  Check what events this covers and you may be able to claim costs arising from the impact.  Check also with regards to any subcontractors you may have.

What if the contract doesn’t contain a force majeure provision or what about claiming Impossibility/ Frustration/Prevention?

Can you argue the effects of Coronavirus itself or of government action aimed at combating it (such as mandatory quarantines) have prevented or frustrated the parties’ performance of your contract, or made performance impossible? If you can’t make a claim or classify Coronavirus as an event of force majeure, you might be released from further performance.  Prior to asserting either the occurrence of a force majeure event, or that a contract has been frustrated, it is very important to take legal advice.

What is the position under an un-amended NEC3 Contract

If you have entered into an un-amended NEC 3 contract Coronavirus may be a Compensation Event under 60.1 (19).  This covers an event which stops the contractor completing the work at all or by an agreed date, an event that couldn’t be prevented, would have been judged as an event with such a small chance of occurring it would be unreasonable for the contractor to consider it when entering into the contract.

What about an unamended JCT contract?

Clause 2.26.14 of the JCT Design and Build Contract identifies “force majeure” as a Relevant Event which entitles the contractor to an extension of time and  entitles either party to terminate the construction contract under clause 8.11.1, it is not a Relevant Matter and gives no entitlement to losses and expenses.

What about insurances?

If your operations are impacted by Coronavirus, you may have in place insurance that responds to at least some of your losses. Business interruption insurance policies in particular may cover disruption caused both by the disease itself and by public policy responses to it, such as enforced quarantines. However, there are often exclusions in such policies. it is important that you notify your insurers promptly.

There may be a number of remedies under your contract that can be used to grant relief from performance if the coronavirus has an adverse impact on any of your construction projects. These may be e.g. force majeure or claims for extensions of time and relief from liquidated damages. However, it will very much depend upon the exact wording of the contract itself and the impact of the virus on the project and any other surrounding circumstances.

For further more detailed information please contact us directly and we will be able to provide advice specific to your circumstances and contract.

Tender Announcement

Excited to take on Project Management

Excited to take on Project Management in Soho Square – focusing on Fire Detection and Protection.

from Twitter

Couple Build Amazing Shipping Container Tiny House For Debt-Free Living

from Twitter

MPG join the Clarion Housing Group Framework for Quantity Surveying

MPG QS are passionate about making a difference. As well as taking our carbon footprint seriously we also care greatly about improving life chances. We are thrilled to share that we will be working with , As the largest housing association in the country, Clarion provide good quality and affordable homes for people priced out of the property market.

MPG approved and certified with Select Accredit

MPG have been approved and certified with Select Accredit – Select Accredit is a complete pre-qualification service validating your data in line with government standards ensuring that buyers have access to accurate and up to date information about your business.

British Centre for Businesses in Dubai

Enjoyed a great meeting set up by the British Centre for Businesses in Dubai with a new contractor.
Exiting times ahead. Looking forward to seeing what will develop.

Merry Christmas

MPG Supports Herts Young Homeless Winter Appeal

Merry Christmas

MPG Founder completes MK Half Marathon

Michael Gallucci MD of MPG completed the Milton Keynes Winter Half Marathon raising funds for the Willen Lake Hospice. Stay safe and well and a Merry Christmas to all.

Stay safe

Like so many MPG has had to find new and innovative ways of working over the last few months, whilst keeping its team and clients safe. Despite the current challenges and uncertainties, we are pleased to be able to record another successful adjudication decision in favour of our M&E client last week.

Being a multi skilled flexible team with years of experience of working together means we have been able to quickly adapt to the new ways of working. We are pleased to say that not only are we continuing to offer our clients our full range of services, we are even busier than usual for this time of year with work on projects from both new and existing clients.

Please be assured it is very much business as usual for MPG in these unusual and uncertain times. We look forward to hearing from you if there is anything we can assist you with and ask that you all take care and stay safe.