Government offers backing to avoid construction contractual disputes

The UK Government has offered its support to the construction industry, by outlining its expectations from businesses as they manage and enforce B2B contracts during the COVID-19 emergency.

There is growing concern that the industry will become embroiled in costly and long-running construction contractual disputes over the effects of the pandemic on projects if it does not look to engage in collaborative discussions to resolve these issues.

The Construction Leadership Council (CLC) COVID-19 Task Force has published practical guidance for all companies involved in the construction supply chain giving advice about how to minimise potential disputes.

The document seeks to provide examples on the types of issues that are likely to arise, together with practical advice on how to resolve them in a constructive manner.

At the start of the coronavirus crisis the CLC warned firms to think carefully about how they deal with the supply chain. At that time the CLC said the way some firms were acting over payment and making contractual threats is unacceptable.

The latest CLC initiative is supported by a statement from Government outlining its behavioural expectations between businesses during these unprecedented times.

Commenting about developments, Andy Mitchell CBE, co-Chair of the CLC, said: “In the light of the pandemic, it is vital that we all work together to minimise potential disputes in order to secure the industry for the long-term.

“As such we have worked across industry to develop practical guidance for businesses, which complements the approach already set out by the public sector.

“We welcome the endorsement of our approach from the UK Government in its Guidance on responsible contractual behaviour in the performance and enhancement of contracts impacted by the Covid-19 emergency.

“This is a rapidly developing situation and we are continuously seeking feedback from industry on the challenges faced and the measures announced to date.

“We anticipate that all businesses will understand the unprecedented situation we find ourselves in and work collaboratively, thus avoiding the need for future legislation.”