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Who pays for the pandemic's impacts?
Despite it being more than 18 months since governments around the world started taking action to address the perceived risks of Covid-19, the UK construction industry is still very much in the dark about who takes responsibility for the impacts - and, more importantly, who pays.
Putting aside for a moment whatever views you have on how the government, society and people should have reacted to the pandemic, the one thing that is for certain is that legally-binding lockdowns, social distancing, self-isolation and other forced changes in behaviour have had a severe effect on our industry.
During the pandemic, contractors and sub-contractors of all kinds have found themselves with no legal safety net because pre-pandemic legislation and contracts did not allow for the kind of delays and increased costs that have resulted.
So, where does that leave us?
Some employers are acting reasonably and collaboratively to find a solution, which is welcome, but the vast majority are showing limited flexibility. This means that the responsibility and liability is usually being passed to contractors and then sub-contractors for issues including:
- unprecedented material price increases
- labour shortages on-site due to self-isolation
- delays in deliveries due to lorry driver unavailability, and
- in the early days of the pandemic, lower productivity because of site closures and social distancing rules.
What's striking here is that those with the broadest shoulders are largely dodging any responsibility and leaving it to the little guy to pick up the pieces. So smaller sub-contractors are facing a hit for situations that were largely out of their control - and many could face going under as a result. This will have a severe personal cost for the individuals concerned, but also reduce the availability of sub-contractors to help grow construction output nationally.
As unfair as this situation seems, unfortunately sub-contractors and contractors who are facing a severe hit have little legal protection as things stand. Legislation has been slow to catch up and we've yet to see much in the way of test cases, which means that challenging contractual terms is proving extremely difficult.
Everyone in the construction industry needs legal protection
A state of confusion prevails, and it will do until we get legislation in place to set out the rules in the pandemic-affected world.
That's why the UK construction industry urgently needs the proper legal framework to accommodate how claims are treated for variations, time and money due to the pandemic. Until this happens, all the well-intentioned health and safety guidance from organisations such as the Construction Leadership Council (CLC) is fine, but what about financial health?"
How you can protect your business
The lack of a legal safety reinforces why you need to ensure that you know what terms and conditions you are signing up for - and adopting best practice throughout the management of your contracts.
If you take time to make sure that you are aware of your obligations, you can plan ahead and protect yourself as best you can - like ensuring there is a time limit on the validity of your quote to account for potential material cost rises.
And during the delivery of your contract, make sure you are aware of the deadlines for claims and the reporting mechanisms you are obliged to follow. Failing in these areas could cost your business dearly.
Quantum CPM can help you get it right at a cost that won't break the bank. We offer a complete package of contract support through our Bundle of Services. This includes a service for everything from Contract Vetting, where our contract specialists check your contract before you sign it (flagging up any issues before you commit) to a Retention Fund Management service to make sure your retention money doesn't go up in smoke after you've finished on site!
For a no-obligation discussion and a fixed price quote for our services, please call us on 0161 974 6655 or email .
Alternatively, find out more at www.quantumcpm.co.uk.
