Since December 2019, Covid-19 has been spreading around the planet, sending 1/3 of humanity into lockdown as health services struggle to cope. This unprecedented crisis causes disastrous impact and massive lay-off in all areas of business and all geographical regions.
It is expected that Covid-19 will hit particularly hard the existing and upcoming engineering and construction projects, due to the structural characteristics of this industry: multiple years projects, limited float on both cost and schedule, low margins business, limited cash surplus, and highly complex contracts with often daily liquidated damages.
In this context, claims for additional time and money are inevitable regardless of the contract jurisdiction; as project costs related to Covid-19 will have to be borne ultimately by an entity (main parties, subcontractor, insurance, …). What is even more worrying is that no one can predict at this early stage what exact impact Covid-19 will have on projects: length of the lockdown, work suspension or termination, disruption of the supply chain, inflation of price of material, shortage of labor, and even subcontractor bankruptcy etc.
Hence, many Construction Specialists advise to take pro-active steps to protect one’s entitlement to claim losses and expenses; and request additional time:
- timely submit requests for an extension of time, respecting the procedural requirements as listed in the contract (force majeur clause if applicable)
- getting records and facts ready to document status of the work when the lockdown ocurred and the subsequent pertubations
- closely analyze project schedule to identify activities which will be the most impacted; and calculate the subsequent new critical path.
Technologies can help in identifying and documenting evidence to prepare a litigation. In fact, electronic discovery (e-discovery) tools have been around for years to help legal teams save substantial time and money in identifying facts and evidence within a large database.
At Lili.ai, we are proud to have designed an AI Assistant trained on construction language (French, English) to specifically identify and collect evidence of delay, modification, cost overrun and non-conformities within GigaBytes of heterogeneous data (powerpoint, email, word, pdf, pst, etc.). Within seconds, Lili turns a multi-GB dataset into a timeline with suggestions of subjects to look at. Lili is mainly used for optimitizing lessons learned or claim preparation.
My personal advice is that whether you are expecting a claim or not, turn this lockdown into an opportunity to analyze your project documentation; it can only be beneficial in the long run.
Source:
https://www.whitecase.com/publications/alert/covid-19-considerations-future-construction-contracts
