COVID-19 and the construction sector (as at 7 April 2020)

The impact of the COVID-19 virus on Scotland and its construction sector has changed as the virus has taken hold. Many people are infected with the virus and, as we write (7 April 2020), the latest death toll in Scotland due to it is 296. At this unprecedented time, the Government’s clear focus now is on putting restrictions in place which are designed to stop the spread of the virus and save human life.

Against that background, it was unfortunate, to say the least, that the UK and Scottish Governments appeared to take different approaches on whether non-essential construction works should be continuing. The position of the Scottish Government has been confirmed in new guidance issued on 6 April 2020. The full guidance can be found here.

The guidance makes clear that it is the view of the Scottish Government that, as part of the measures being taken in order to control the spread and effect of the virus, work on construction sites generally should cease unless that work relates to “essential” project works. Importantly, the guidance provides a definition of what is regarded as “essential” as well as setting out what it considers “non-essential”.

Essential projects include:

  1. projects to create or repurpose facilities which will be used directly in COVID-19 related activities including testing, containment, treatment, research, vaccine production, protective equipment manufacture, other key medical supplies and other related activities including, importantly, supply chains to those projects;
  2. projects to create or repurpose facilities which will be used to accommodate key workers or free-up space in facilities to be used directly in COVID-19 related activities as set out in 1 above;
  3. projects to create or repurpose facilities and infrastructure critical to the national response to COVID-19 including food production, distribution and digital communication, where these facilities are likely to be completed and operational within 6 months; and
  4. projects which are considered essential public services  or which will provide wider resilience and capacity across the system.

The guidance goes on to give examples of what are considered to be “essential projects” in the health sector, the transport sector and other “essential and time-critical maintenance and repairs”. Any such project should only continue operating if it falls within the definition of essential projects. Further, where relevant, it must comply with the general guidance on the safety and welfare of people as a result of the virus.

The guidance states that any site unable to meet these requirements ‘must cease operations’.

It is noteworthy that the guidance recognises that certain work in the construction sector has been and will continue to be required both to fight the virus and to ensure that work which is truly essential is carried out, the most obvious example being the transformation of the SEC in Glasgow into the temporary hospital, NHS Louisa Jordan. However, if the work sites do not meet the requirements of the guidance, operations on such sites should cease.

It is important to note that the guidance has not been expressly enshrined in any emergency legislation, although some may seek to argue that it arises out of other provisions in emergency legislation passed to deal with the COVID-19 virus and its effects.

In considering how the COVID-19 virus and its effects may have an impact on the contractual rights and obligations of those involved in construction projects, that will turn on the terms of the parties’ relevant contracts – express or implied. General guidance is set out in our previous article on the effect of coronavirus on the construction sector.

It may seem odd for lawyers to say this, but no matter the strict legal position under the terms of such contracts, all those involved in the construction sector, from suppliers all the way up to public and private employers, should seriously consider whether to insist in the black letter of contracts in these unprecedented times. Many would argue that parties involved in the Scottish construction sector at any level and in whatever capacity can and should act reasonably at this unprecedented time and work collaboratively to agree what the effect of the virus will be on their projects. All in the sector need to work together at this time so that it can hit the ground running when the effects of the virus have subsided rather than having to expend valuable time, money and energy dealing with disputes arising out of the effects of the virus.

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