One in three construction contracts is not fit to address the effects of the covid-19 pandemic.
That’s according to research from Turner & Townsend, which called for greater clarity over contract terms.
A survey by the consultant found that the majority of liability arising from the pandemic was believed to be held by clients.
A total of 83% of respondents experienced a pause or temporary site closure because of covid-19, and a further 72% considered that productivity generally has reduced on projects currently on site compared to pre-pandemic levels.
Nearly half (45%) of those surveyed reported an increase in contractual disputes since the start of the pandemic, while one third believed their contracts were unfit to address the effects of notifiable covid-19 events.
Some 43% of respondents considered that covid-19 events were not sufficient on their own to claim additional time and/or money. As a result, 63% of respondents have sought contractual guidance from the government due to the uncertainty, with another third consulting industry bodies or other industry professionals.
The research found that 49% of contractors are allowing for covid-19 related costs in their tender submissions.
Nick Jones, associate director, contract services at Turner & Townsend, said: “The covid-19 pandemic hit live projects with delays, site closures and reductions in productivity. Almost a year on though and we still do not have enough clarity on the liability within construction contracts. This needs to be addressed, and quickly, particularly with new projects coming online thick and fast as part of the push for economic recovery.”
“As contractors and clients alike now seek to recover losses incurred during the pandemic, it’s important to seek specialist advice. If 2020 has taught us anything, it is that all parties will now want to ensure clarity for covid-19 event liability through the drafting of expressly worded contract terms, and the contractual ‘employers’ may also be looking to address the current imbalance of risk and responsibility for the future.”
