How has the construction sector changed in recent months, and what does the future hold for the industry?

As a leader in the field of construction law for over 20 years, who better to ask than Fenella Mason - Burness Paull’s head of Construction and Projects.

She summarises her experience of the impact of COVID-19 and weighs up the prospects for the sector going forward.

1. How would you describe the last six months in the construction market?

Unprecedented! No-one predicted the incoming pandemic and the huge impact it would have on the construction market, but when coronavirus hit the UK at least the industry was in a fairly robust starting position after a really strong start to the year.

There’s no doubt the pandemic has had, and will continue to have, a devastating impact on many businesses in the industry but I suspect things could have been much worse.

As a firm we have been pretty busy on the legal front during COVID-19, but the nature of our advice has changed to account for the new circumstances and different needs our clients now have. Personally I’ve been impressed at the adaptability and diversification I have seen in these challenging times from both colleagues and clients alike.

2. In what ways has COVID-19 changed the construction sector?

With site closures UK wide at the end of March, projects came to an abrupt halt. It was incredibly frustrating for everyone, especially seeing the less restrictive approach that was adopted south of the border.

Once lockdown rules eased, everyone had to play catch-up while also getting to grips with relevant restrictions. It will be interesting to see how the divergence between the approach north and south of the border impacts on the health of the sector as a result of the different government approaches to date.

We’re now seeing remobilisation play a huge part in construction life post-lockdown and it is not without its difficulties. Aside from the obvious practical issues, there are often significant financial consequences and we all know getting agreement on additional costs can be challenging at the best of times, never mind during a global pandemic. The new government-imposed restrictions on construction sites has also meant that the escalation of  costs generally has become a dominant issue.

We now regularly advise clients on relief clauses for COVID-19 or similar type events, and there’s no doubt that the construction sector will pay more attention to these types of provisions in negotiation of contracts going forward.

There has been a significant amount of Covid-driven legislation. Apart from the lockdown restrictions, the most dramatic of the legislative changes is probably the introduction of the Corporate Insolvency and Governance Act in June which introduces major changes to insolvency law.

From a disputes perspective, there has not been huge change. The biggest shock was complete shutdown of the courts, but in reality this only slowed things down a little bit. With the courts now on board with virtual processes, it certainly seems close to business as usual for the contentious aspects of the sector.

3. How has COVID-19 impacted your role as a lawyer and personally?

Like many others I have had to sharpen up on my technological skills! At Burness Paull we are lucky enough to have our very own legal technologist (Sam Moore), so he has helped enormously with transforming the way we work and communicate with clients in this new virtual environment.

With everyone working from home, the geographical location of clients and contacts has become less important.  We have definitely experienced the benefit of that in our business. Everyone is more readily available and that means faster progress at less cost.

The downside of that is the lack of face-to-face contact, and I do miss seeing everyone in person.

One bonus with regard to the current lack of commute is more time to spend with our new lockdown puppy - a polish hound called Maya!

4. In your view, what will be the biggest legal issues for businesses involved in construction in the near future?

I suspect we’re going to see a real shift in focus back to the relationships of the parties involved in a construction project rather than just the bottom line.

For a while, it seemed to me, too often to be all about the numbers. Moving forward I think relationships and communication are going to be more important than ever, particularly with the geographical challenges faced by many.

Relief clauses will certainly be in the spotlight for a while, both for businesses negotiating new contracts and ones with ongoing projects.

We’re already seeing industry bodies publish new example drafting covering pandemic events and much debate around whether a pandemic constitutes a force majeure event.

It is inevitable that the number of time and money claims are only going to increase for the foreseeable and it will be interesting to see how different employers decide to deal with those.

Sadly, the other big issue will of course be insolvency. As already mentioned the UK government has introduced legislation to try to help businesses in need, but how this will impact on other organisations has yet to be seen.

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