COVID-19 – Contract Claims

COVID-19

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.

Conclusion
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.

Worried about cladding? You may need an External Wall Fire Review

The Royal Institution of Chartered Surveyors (RICS), the Building Societies Association (BSA), and UK Finance have agreed a new process for the valuation of high-rise buildings, called the External Wall Fire Review process (EWFR).

  • The new industry-wide valuation process which will help people buy and sell homes and re-mortgage in buildings above 18 metres (six storeys).
  • The industry is also encouraging the owners of these buildings to proactively pursue independent testing of external wall materials to safely speed up the process for buyers and sellers.

The External Wall Fire Review process is designed to overcome issues that have arisen preventing property owners, in particular leaseholders, from buying, selling or mortgaging their properties.

The new External Wall Fire Review process will require a fire safety assessment to be conducted by a suitably qualified and competent professional, delivering assurance for lenders, valuers, residents, buyers and sellers. The Review has been developed through extensive consultation with a wide range of stakeholders. Only one assessment will be needed for each building and this will be valid for five years.

The EWS form must be completed by a member of a relevant professional body within the construction industry with sufficient expertise to identify the relevant materials within the external wall and attachments and whether fire resisting cavity barriers and fire stopping have been installed correctly.

MPG Chartered Surveyors have qualified staff in London who can complete these reviews.

If you are interested in obtaining a quotation for an EWS Form, please contact sarah.dexter@mpgqs.com or michael.gallucci@mpgqs.com

MPG Project Management Team

Since the New Year our PM team has continued to keep pace with demands for their services. We have had a very busy start to 2020 with a number of new and exciting projects including a large redevelopment project in London’s Soho Square, Royal Free Hospital, Union Square in Manchester and the Afghan Embassy.

Goodbye to 2019

We are nearing the end of what for MPG has proved to have been a very busy and successful year and are looking forward being even busier in the New Year with a number of exciting challenges and projects already ahead in 2020.

This year has seen new team members including Anthony Knott (QS) and Tim Murungi (PM), Martin Cripps, Bid Manager and Nathan Strugnell an Assistant QS join us to help with the numerous projects we have been involved in, from both new and existing clients.  The first quarter brought in 20 new projects alone and the pace hasn’t slowed during the rest of the year.   Projects include Fulham Gas Works, IKEA Greenwich, O2 Cineworld, Hanover Square, Lewisham Ambulatory, The Science Museum, West Ham Station Ticket Hall, UCLH, RA, Grants Whiskey and GOSH to name just a few.

MPG were very well received when they exhibited at the Big 5 in Dubai in November this year and as we move into 2020, we are all eager to get started on work already scheduled, not just within the UK but in Jeddah, Riyadh, Mumbai, Kuwait and the UAE.

We would like to wish you season’s greetings and a very happy New Year.

With Brexit looming, what uncertainties should we be thinking about in the construction industry?

 

As the impending date of Brexit approaches, Britain’s construction sector continues to whither in anticipation of uncertainties tied to this unprecedented historical event. Below are a few things in particular firms should be worried about, but as in all volatile markets, we should be patient for this cautionary period to end, especially as plans for an exit strategy become more clear.

Earlier this year, our manufacturing sector saw a major surge in output as companies began to prepare for tighter restrictions on cross-border movement of workers and goods. It is safe to say that the surge is, for the most part, over and we are now all eagerly anticipating the next phase of the exit strategy. Prices for imported goods, including a massive amount of building materials, are likely to increase with new tariffs and taxes and will likely take longer to arrive as movement becomes more tightly controlled.

Additionally, it can be assumed that after the withdrawal from the EU, we can expect a major labor shortage. More than a quarter of all construction workers in London are EU migrants and if it’s harder for them to reach job sites, it’s very possible they won’t attempt to gain work here. The available labor that is left will consequently become more expensive, with projects facing extended timelines to completion.

Wary investors are pulling back as well, removing revenue streams from the industry that help feed the delivery of larger projects such as the HS2 (which our firm is assisting on). On the other side of this coin however, the government may be able to assist with more funding that would otherwise be spent on EU membership.

Whatever the future holds, we are confident the innovation and resiliency of the firms we serve will continue to help build a better future for all Britains, and we are very excited to walk alongside them through these uncertain times.

Michael Gallucci serves as the managing director and owner of MPGQS, a leading property and construction consultancy headquartered in London. Since 1996, Michael has built a reputation as a trusted partner for firms in need of his extensive expertise, great energy, and an unparalleled eye for detail. These strengths, in conjunction with his ability to build a team from the greatest talent in the industry, have paved the way for MPGQS to become a leader for handling large scale international projects.

MPGQS operates from offices around the UK, Europe, and the Middle East, and serves clients in areas relating to financial, commercial, contractual, and engineering aspects for large construction projects. From quantity surveying, project management, and dispute resolution, MPGQS works with clients on all levels of a project from inception to completion.
Learn more about our company by visiting our company website or visit us on social media.

MPG article featured in Aalmeen News Middle East

MPG article featured in Aalmeen News Middle East

You can read it by clicking the link below:

 

MPG preparing for the Big 5 Show in Dubai

THE BIG 5 SHOW the largest trade fair for construction will be held in the Middle East emirate Dubai. It’s a meeting place for building and civil engineering professionals both international and local. Alongside the exhibition there will be a variety of events like The Big 5 Technical Conference, The Big Green Trail and The Big 5 GAIA Awards. The BIG 5 SHOW is accompanied by THE BIG 5 PMV that is a dedicated arena for plant, machinery, tools & construction.

The The Big 5 will take place on 4 days from Monday, 25. November to Thursday, 28. November 2019 in Dubai.

MPG are being sponsored by UK Trade & Investment to exhibit at the show.

We look forward to seeing you there.

 

Team GB Success

Congratulations to Michael Gallucci who recently competed as part of Team GB at the 2019 Transylvania Multisport European Championship.  All the hard work and training paid off and he finished in the top 20 in his age group in the Aquabike event.

2019 continues to be a busy and successful year for MPG and in particular our Dispute Resolution team whose most recent success won a settlement of over half a million pounds for our client.  Recent commissions include The Science Museum, West Ham Station Ticket Hall, UCLH, Grants Whiskey and GOSH and in June we received our Certificate of Registration as a firm regulated by RICS for the coming year.

In addition MPG will shortly be launching a series of Webinars around NEC4 and dispute resolution, more information to be published here shortly.

MPG expands it’s team and project portfolio in the first quarter of 2019

Since moving to our new offices at the start of the year MPG have expanded their team and are pleased to welcome Peter Toseland (Project Director) and Martin Cripps (Bid Manager), and Graham Vinters (Planner & Project Controls), who are now part of our Pre-Construction Team assisting our clients with their bid and tender requirements.

The first quarter of 2019 has brought over 20 new projects to the practice so far from both new and existing clients. New commissions include Expert Witness, Dispute Resolution and Commercial services on Fulham Gas Works, 15 Kean Street, IKEA Greenwich, Hanover Square, Hobhouse Court, O2 Cineworld, South Bank Apartments, Lewisham Ambulatory and Park Crescent in Regents Park. Demand for the expertise and experience of our dispute resolution team continues to grow.