Who Will Bear the Risk and Cost for Coronavirus Construction Delays?
Expert Witness Tim Marlow explains how construction has been hit by the pandemic and what expects to happen when things slowly resume back to normal.
The terms of the contract will, of course, allocate the risk and cost of the Coronavirus. Although I have studied and have a keen interest in the law, I know where my expertise lies and, therefore, I stick to my specialist subject of delay rather than liability.
To some degree, I think that the outfall from the Coronavirus crisis will have a detrimental effect on all of the parties involved in the majority of projects. On developments where there is a spirit of collaboration and ‘being in it together’, I would expect the pain to be shared. A significant number of projects, however, will no doubt rely on the Contract to allocate the risk, and in such cases, either party may end up paying a hefty price for something that nobody was anticipating just six months ago.
How has Covid-19 impacted your industry?
Construction has, of course, suffered enormously along with the rest of the economy. How much of the pain is long lasting, is the big question. I am sure that life will not quite be the same again, whether it be more people working from home or greater reticence to use public transport. Depending on the scale of the change in the way we go about our lives will determine the effects on the office building and infrastructure sectors, for example.
Do you foresee any legal cases arising due to delays in this area? How does this compare to common factors behind delays in construction?
Arguments will develop regarding the extent of the delay actually caused by Covid-19 and it is inevitable that a large number of disputes will end up in adjudication, arbitration and the Courts.
It is possible that the effects of the global pandemic were starting to impact projects before the lockdown was imposed and will continue to impact projects long after sites fully re-open.
For a Delay Expert such as myself, the delays resulting from the Covid-19 crisis are no different to analyse than any other cause of delay. It is imperative to establish the progress position of the project as close to the start of the lockdown as possible. Doing this will enable the identification of the delay incurred before sites were closed. Of course, the simplest delay to calculate will be while the site is totally shut. More involved analysis, however, will be required when certain trades return and in reduced numbers, causing production rates to fall below those that were expected at the time that the work was tendered. The identification of the critical path (the longest sequence of activities) will be paramount in determining whether actual progress is being achieved or the work being carried out is not critical in progressing towards completion.
It is possible that the effects of the global pandemic were starting to impact projects before the lockdown was imposed and will continue to impact projects long after sites fully re-open. As countries around the world imposed restrictions at different times, it is possible that the supply of imported materials and components were being delayed before restrictions were imposed in the country where the project is being held. Similarly, with factories and quarries having been closed globally, there will be material supply issues as developments re-open.
Should contractors take all necessary actions required to remedy any delay during the pandemic? What action can they take?
Many contracts oblige the contractor to use “best endeavours” to mitigate any delay. This is obviously very difficult when faced with a threat to life. It may be that contractors can usefully review the programme for the remainder of the work and re-programme to suit the evolving circumstances. It may be that alternative methods of construction can be considered that would be more suitable. Certain offsite tasks, such as design, can be carried out before it was originally planned to relieve some of the pressure later in the programme. Whatever contractors do during this period should be recorded in the event of a future dispute.
At the forefront of my thoughts whenever I am appointed, is my duty to remain independent.
From an Expert’s view, what strategies could limit delays from the outbreak?
I would suggest that the programme is at the forefront when developing strategies to limit the delays. Hopefully, there was a detailed plan for carrying out the work before the project was stopped. It is essential that the Project Programme will need to be reviewed and re-drawn to take account of the circumstances we are in. I would expect that the programme would require continuous development for some time, as more information about likely labour levels and material supplies becomes available.
What steps do you take when writing a report and devising an opinion for the Court?
At the forefront of my thoughts whenever I am appointed, is my duty to remain independent. As most Expert appointments are by one of the parties, it is not always as straightforward as it may seem. Certainly, in the initial stages, my knowledge and information are derived from the party which has appointed me. Reviewing the information presented with some healthy scepticism is definitely a skill to maintain. The courts are not friendly places for experts that fall short of the required standards; I have the principles laid down in the Ikarian Reefer case always to hand to remind me of my duties and responsibilities and all Chronos reports are peer-reviewed prior to issue.
Litigation seems to have become a potential career graveyard for experts in recent years with judicial criticism likely to severely dent an expert’s fee-earning capability.
How long does it take to devise a report? What information do you need?
It depends. I am appointed on small disputes, very large disputes, and everything in between. My report needs to be proportionate to the size of the dispute but also sufficiently thorough so that it stands up to scrutiny. If all the relevant information is available at the outset, which is a rare occurrence, a straightforward analysis and report can be produced in up to two weeks. At the other end of the scale, it may take months to compile a report for a multimillion-pound dispute with complicated circumstances.
How has the expert witness role evolved over the years? What changes have happened during this time?
Litigation seems to have become a potential career graveyard for experts in recent years with judicial criticism likely to severely dent an expert’s fee-earning capability. In part, this may be because reports that were prepared for adjudication, are later being presented in court and the expert either not taking or being given the opportunity to ‘upgrade’ a report to stand up to greater scrutiny.
I have also seen a greater number of experts in my field with backgrounds from areas which are not primarily associated with time management. As a planner, who has spent many years on sites compiling and maintaining programmes, analysing those same programmes to determine the extent and likely causes of delay is, for me, a natural progression.
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I am a Chartered Builder and a Delay Expert. I am a co-owner of Chronos Consult, which is a specialist delay and planning consultancy covering all sectors of the construction and energy industries.
I am proud of the fact that I am a career planner having started with John Laing Construction on its graduate training programme over 30 years ago. Having been lucky enough to work for some great companies such as Lend Lease and BAM, I was involved in some fantastic projects including the Leadenhall Tower (aka The Cheesegrater) and the Bloomberg Headquarters (opposite Cannon Street) in London.
Always having held an interest in law, I set out to join the world of dispute resolution and forensic delay analysis by undertaking an MSc in Construction Law & Dispute Resolution at Kings College, London. Since then, I have become a fellow of the Chartered Institute of Arbitrators and a member of the Academy of Experts. I am an enthusiastic proponent of dispute boards and am accordingly a member of both the Dispute Resolution Board Foundation and the Dispute Board Federation.
As a delay expert, I have been appointed to give my opinion on a wide variety of projects, from private residences to hotels and power stations to airports. My experience covers most sectors of the construction and energy sectors in the UK and Internationally. Although I mainly act as a party-appointed delay expert, my duty is to provide my independent opinion to the court or tribunal. I have also given oral evidence in international arbitration proceedings.
Matt Lindsay and I established Chronos Consult as a boutique consultancy based in Chancery Lane in London which specialises in delay analysis and project planning and has expertise in all sectors of the construction and energy industries. We had both built up good networks of clients and felt that there would be a good synergy if we merged. Chronos Consult has its offices in Chancery Lane in London, ideally placed when called to meetings at the surrounding law firms. We are immensely proud of the fact that we have so many repeat clients and when we receive work through recommendation.
Our main market is delay analysis, however, as we are all planners, we also undertake prospective planning commissions. Between us, we have experience of all the major industry sectors, and although the majority of our appointments are in the UK, we also work on projects worldwide. Chronos now has a group of trusted professionals providing a wealth of experience to our broad range of clients.