It has been a difficult start to the year for everyone and the Construction Leadership Council's (CLC) prediction is not all that surprising.
The CLC proffers sound advice on administering contracts in a "fair and reasonable" manner and whilst much can be said for gathering around a negotiating table to thrash out a compromise, it is never a substitute for following the precise requirements of the contract, which can often include strict notification requirements. Similarly, without prejudice discussions and subject to contract negotiations are a great starting point to reaching an amicable conclusions on disputes, but the November 2020 case of Joanne Properties Ltd v Moneything Capital Ltd serves as a useful reminder that the “subject to contract” label can only be lifted by a formal contract or other clear express words or facts. The takeaway - read your contracts carefully and any resolution should be finalised through a settlement agreement.
“There remains a real concern that in 2021, as we reach the completion of projects entered into pre-pandemic and the end of financial/tax years, businesses will become embroiled in costly and long-running disputes over the effects of Covid-19 on projects.”