Q&A: Extensions of Time and COVID-19

In this blog post, Steering Committee member, Mark Watson, answers questions related to EOT claims arising from COVID-19. These questions are excerpted from our fifth Construction Clinic session, which took place in May 2020. The entire webinar may be viewed on-demand on YouTube. Question 1 Question: In the FIDIC Yellow Book, 1999 Edition, Sub-Clause 17.3 (Employer’s Risks), foresees one of the Employers' risks as any operation of forces of nature. This might be associated with the current pandemic, COVID-19. That is a force of nature. But in the FIDIC Yellow Book, the 2017 Edition, the clause for Employer's risks does not exist. So my question is, does FIDIC 2017 override all contracts made before 2017? Answer: The 2017 Edition of the FIDIC forms of contract, does not override any of the previous editions of the FIDIC standard form contracts. And the reason is that each edition of the FIDIC contract is, by itself, a separate and independent contract. So it will not override any…

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How to Ensure You Avoid Costly and Time-Consuming Disputes on your Projects

In this post, I'll look at ARCADIS' annual Global Construction Disputes Report 2019, as it makes interesting, but, not altogether surprising reading. For the time period covered in the report, the top three reasons for disputes are: 1. ‘Owner/Contractor/Subcontractor failing to understand and/or comply with its contractual obligations; 2. Errors and/or omissions in the contract document; 3. Failure to properly administer the contract.’ Some other interesting noteworthy observations are: 1. ‘Human factors and misunderstanding of contractual obligations continue to be a primary cause of disputes’; 2. ‘With more project participants, it is essential for those involved to understand the contract, their role in the project and how to work with the team’; 3. ARCADIS suggest that ‘at least three building blocks are needed for successful dispute avoidance and resolution: (1) contractual mechanisms whereby risks are identified early and parties are obliged to consider how to address them; (2)…

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Dispute Resolution in the New Normal

The past year has seen radical changes in the way we socialise, work, and play. The resolution of disputes has been no exception in this regard. Many disputes have been resolved by means of virtual or online hearings. Parties in different locations, even their own homes, resolve their disputes remotely. Before the arrival of COVID-19, there were 10 million people using the video conferencing platform Zoom worldwide. By April 2020, there were 300 million users. This is great news for Zoom’s shareholders, if nothing else—according to their Q2 report, revenue was up 355% over Q2 2019. It could also be good news for the future of adjudications. Steering Committee member, Bill Bordill recently took part in a discussion on the use of virtual hearings and adapting to the ‘new normal’ in the UK statutory adjudication system. Panelists agreed a new way of dealing with disputes has opened up. They concurred it is now likely that many more disputes will be resolved this way in the future. Many…

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How to Ensure That a Dispute Adjudication Board is Formed Correctly

A blog subscriber recently asked how to set up and organise a Dispute Adjudication Board (DAB) and particularly what may be done when one of the parties refuses to agree to the appointment of the DAB in order to frustrate the dispute procedure. The following advice is related to the FIDIC contracts but may be equally applied to other forms of contract that have dispute board or adjudication provisions. A proactive action would be to include a list of several potential DAB members in the Contract. If the list has been prequalified in terms of qualifications and experience, particularly for the type of project being undertaken, then agreement of the board members should be straightforward. The Contract should state the time frame for the appointment of the DAB. FIDIC provides that the date should be stated in the Appendix to Tender. Contractors would be well advised to check that a reasonable date is included therein. If no list of potential DAB members is included in the Contract,…

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Responses, Determinations and Decisions

A recent training course that I presented in London was slightly unusual in that the balance of the attendees was significantly weighted towards the client’s side and also included an arbitrator and an adjudicator. These particular attendees were obviously interested in learning how claims should be responded to and in the case of the arbitrator and adjudicator, how decisions should be presented. Whilst I am happy to say that the training dealt with the subject, I thought it would be worthwhile sharing some of the key points here. In the same way that the object of a claim is to persuade the reviewer that the claim is just and that an award of time or money should be made, the object of a response is to persuade both the claimant and the employer that whatever is awarded, be it the full amount claimed, a reduced amount or nothing at all, is fair and reasonable under the terms of the contract. The same must also be said for adjudicator or arbitrator’s decisions. If responses do not…

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