Authors
Rebecca May

Rebecca May

Associate

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Rona Westgate

Rona Westgate

Senior professional support lawyer

Read More
Authors
Rebecca May

Rebecca May

Associate

Read More
Rona Westgate

Rona Westgate

Senior professional support lawyer

Read More

28 September 2020

Under Construction - Q3 2020 – 4 of 5 Insights

Construction disputes and COVID-19

As the COVID-19 pandemic continues to have a dramatic effect on office life, businesses and users of public transport in particular, disputes between parties have not been yet de-railed albeit that they need to be conducted differently.

Remote hearings and electronic filing and bundling

The courts were quick to issue a new Protocol regarding Remote Hearings and a new Practice Directions on remote hearings (PD51Y) early in the lock-down. Available methods for remote hearings include conference calls, Skype, court video link, MeetMe, Zoom and the remote hearings have been widely adopted by the TCC. Electronic filing and bundling are also encouraged for each remote hearing via the courts or through data rooms and emails, a practice familiar to parties conducting adjudications or hearings at the TCC.

Expert witnesses

The Academy of Experts has recently produced guidance to help experts prepare and deliver their evidence remotely. At report preparation stage the guidance suggests that experts should check (when first instructed, three months before the hearing and approximately one week before the hearing) if it is intended that their evidence should be given remotely; and that expert reports should be written to enable the report to be presented on screen.

Key points for the hearing itself are the need to have clear methods of communication during the hearing, the adoption of hearing protocols, and suggestions as to the use of screens and headsets and the need to anticipate technology drop offs or technical issues. One interesting aspect of the guidance is the acknowledgement that processing information online is hard and that on line communication is more demanding and tiring than face to face meetings as there is no body language to read and it is difficult to pick up clues from others.

Direction from the courts

In Jalla v Shell [2020] EWHC 738 (TCC) the court acknowledged that "the consequences of the pandemic adversely affected the ability of the parties to prepare as easily and efficiently as they might otherwise have done." These difficulties meant that when giving directions, the judge extended the time limits, which he would otherwise have imposed, due to the pandemic.

Parties are expected to work round difficulties and not use the pandemic to run unsustainable arguments. For example, in Millchris Developments Ltd v Waters [2020] 4 WLUK 45 it was clear that the COVID-19 crisis did not mean, as the contractor sought to argue, that there would be a breach of natural justice if the adjudication continued. Where parties are unavailable extensions of time could be used, and site visits could be conducted via video-link if necessary.

And in Broseley London Ltd v Prime Asset Management Ltd [2020] EWHC 944 (TCC) the impact of COVID-19 was also a feature. In that case, the contractor issued proceedings to enforce an adjudicator's decision in its favour. The employer did not deny that judgment should be made but sought a stay of execution to allow a true valuation adjudication. The employer wanted to resolve the final account before paying the contractor and subsequently having to recoup any overpayments. The court recognised that COVID-19 might impact on the ability of the contractor to continue or commence future projects but that did not mean that the adjudication decision should not be enforced.

Furlough

An additional complication to the smooth running of litigation and adjudication has been the furlough scheme.  The government's website state:

During hours which you record your employee as being on furlough, you cannot ask them to do any work for you that:

  • makes money for your organisation or any organisation linked or associated with your organisation
  • provides services for your organisation or any organisation linked or associated with your organisation

Providing support during formal dispute resolution procedures is likely to be deemed to be providing a service to an organisation.  Accordingly, we have seen some instances where extensions to periods of time have been requested on the basis that a key individual is on furlough.  Overall, the response to this issue has not been overly sympathetic as it is uncommon that there is only one individual within a business who would be capable of assisting with dispute resolution.

It is always advisable to ensure that key individuals are available if a formal dispute resolution procedure is likely to be commenced.  This has been highlighted by the furlough scheme which unexpectedly made many individuals unavailable to assist with disputes.

Mediation

In the same way that court hearings haven't been able to proceed in person, neither have mediations. The most popular online forum appears to be zoom where the mediator can box off individuals into "rooms" to allow discussions between the mediator and just one party.  Before embarking upon a virtual mediation it will be important to ensure that all parties are comfortable with the agreed media and that all documents are available in an electronic format.

Summary

Drawing these threads together, it is clear that COVID-19 has changed the litigation and adjudication landscape.

In terms of adjudication, which is a speedy resolution process working to tight timescales, it is likely that parties will need to be more co-operative and flexible over issues concerning submissions of statements of case and timetables, ensure that experts are well prepared for remote hearings, make sure electronic documents present well on screen and are user-friendly, agree a hearing protocol, and get to grips with using the agreed remote-working platform anticipating so far as possible technology glitches.

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