Publishers of major civil engineering contracts have issued Covid-19 guidance urging those involved to behave in the spirit of their contracts.
In a memorandum issued in April, FIDIC, the International Federation of Consulting Engineers, asks all members of the construction community to act in line with its ‘Golden Principles’ of cooperation and trust; not taking undue advantage; avoiding disputes; and timely payment.
“COVID-19 presents an extraordinary challenge and FIDIC commends all members of the construction community to be focused on the successful delivery of the project before them in a way that sustains the long-term viability of the construction community,” says the memorandum.
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FIDIC does not offer any specific legal advice, whereas the New Engineering Contract (NEC) has published a series of five videos answering Covid 19-related questions they have been asked. The videos tackle subjects including what good practice looks like, clause X2 covering changes to the law and Compensation Events.
NEC contracts have good moral behaviour written into them. They say that everyone named and involved in the contract should act “in a spirit of mutual trust and cooperation.”
However, the contract may not even have been drafted in that spirit. One of the first things any contractor should do is to look at the ‘Z clauses’ in their NEC contract, advises construction lawyer William Brown, a senior associate of Quigg Golden Brown, in a webinar published by the Chartered Institute of Building (CIOB) in the UK. These are additional clauses that are added to the contract. Brown has seen Z clauses that run to 106 pages of changes and additions.
One common change is that an Employer amends the amount of time that a Contractor has to notify Compensation Events from the standard 8 weeks. Some amendments reduce this period to as little as two weeks. It is also important to note what form of communication is required by the contract; if a Compensation Event is not notified according to the contract, it doesn’t count in law.
Brown suggests that all parties should act in the intended spirit of NEC, whatever contract form they are working to. “Would you want your son or daughter to be working on that site? If the answer is not, you need to seriously take that into consideration when considering your next step,” he says in the webinar. “That would not normally be the advice, but morally speaking, it’s something that everybody needs to take into account.”