Adverse Weather and Construction Contracts
The Beast from the East meets Storm Emma. It might sound like the premise for a charming fairy tale but the extreme weather will undoubtedly have affected the progress of construction and engineering projects across the country—irrespective of their size and complexity.
The obvious concern for many contractors and subcontractors will be what effect the bad weather will have in terms of completion dates and liquidated damages.
Each contractor's rights will depend on the terms of the contract under which it is employed, and the contract should therefore be the starting point in considering any potential claim.
This article considers how the risk of adverse weather is treated in two of the contracts from the NEC4 suite—the Engineering and Construction Contract (EEC) and the Engineering and Construction Short Subcontract (ECSS).
In the EEC, a compensation event is an event that is at the risk of the Client and, if it occurs, entitles the Contractor to be compensated for the effect the event has on time or money.
A compensation event for weather conditions only arises when the value of any weather measurement (e.g. cumulative rainfall or the number of days with snow lying) is shown to occur on average less frequently than once in every ten years, when compared to established weather data.
This ought to be a more objective test than common arguments over whether weather conditions are "exceptionally adverse" or not. However, it does mean that when programming and pricing works contractors must take into account the risk of bad weather which may prevent or delay the works, but which is less severe than a once in ten year event.
It is only the difference between the actual weather and the weather that is assumed to have been allowed for that is taken into account in assessing the compensation event (i.e. in assessing the amount of time and money that a contractor will be entitled to).
Whilst 'Emmageddon' might fall into the bracket of a once in ten year event, going forward it'll likely be an uphill struggle to show that any similar inclement weather falls into that category.
The ECSS also includes weather as a compensation event. However it provides that the Subcontractor is to bear the risk of adverse weather delaying work on site unless, during the course of the contract, the Subcontractor is prevented from carrying out all work on site for periods of time of at least one full working day which total more than one seventh of the total number of days between commencement of the works and completion.
Subcontractors will be expected to mitigate the effects of bad weather by, for example, re-sequencing work meaning that weather which prevents a contractor from carrying out all work on site is likely to be rare.
While you can't control the weather, you generally can predict it. In the NEC4 suite and other standard forms, the thresholds before which contractors become entitled to either time or money as a result of bad weather are high. As a general rule, in programming and pricing work, contractors should take into account the risk of bad weather which may prevent or delay progress.
In the NEC4 suite, if a compensation event is not notified in time the right to an extension of time and to additional payment will be lost. If any projects have been impacted by the weather, contractors and subcontractors should check their contracts and comply with any notification requirements.
If you require further information on this please contact John Dugdale, Associate, A&L Goodbody.
Date Published: 2 March 2018