When conventional remedies fail….
There is currently turmoil in the construction industry, as current contracts and subcontract terms provide little or no remedy for the effects of the coronavirus pandemic. Bitter disputes are developing across the industry as parties cannot provide the services or satisfy the obligations the contract imposes.
The coronavirus pandemic is unprecedented and as such few contracts will provide for the consequences of its effect.
Possible contractual remedies may be found in clauses for Prevention/Delay Events, or sometimes Force Majeure (where such exist), but these are express contract provisions and may not work to provide a remedy or resolve the specific dispute. Commentators have already suggested conventional doctrines such as Illegality and Frustration may not be applicable. Even if they were, the result would be that the contract comes to an end forthwith, resulting in the inevitable disputes and arguments that will arise from such event. Certainly both sides will have losses, and the Project will not be completed.
Parliament is not helping, and by refusing to give the construction industry prohibited status, has exacerbated problems for struggling contractors. Given the lack of realistic contractual remedies to resolve these disputes, we need to think alternatively.
Mediation could offer the perfect tool for the resolution of many of these issues. The parties remain in complete control, but can achieve a resolution flexibly and with pragmatism, as best suits their purpose.
Under a Mediation, the parties can come together without prior constraint or indeed commitment, in a safe space to negotiate with help, where they can informally discuss, explore and consider the entire issue before them, hopefully resolving it on a ‘best for the project’ point of view and outcome. The main attribute of such achievement is to enable, wherever possible, the parties to continue the project completion.
If you require any further information contact NDR.