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LAW: Weathering the storms

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Patricia Nathan-Amissah gives an overview of the legal duties and responsibilities for pharmacists involved in construction work in their premises…

As a pharmacist you may be involved with fit-out contracts for your pharmacy, perhaps following on from a new build or to update your existing premises to make better use of the space and to provide a better customer service.

This could be a unit in a retail development or within a hospital for example. Some of this remodelling may be required as a result of the global pandemic given the vulnerable members of society that have to access your services.

Even for small works, we recommend a formal written contract is entered into. Contractors will often want to contract on their own terms which may not include protections required for you as a client.

There three pillars to a construction contract: time, money and quality. Anything that may delay the project (time) is also likely to impact on the cost of a project (money) as well as (quality) if completion is rushed.

A well drafted building contract will have a start date (sometimes called a ‘Date of Possession’) and a completion date when the works have to be completed by. Delays in the works beyond that completion date can have serious financial consequences for you as a client, such as: paying additional rent for alternative premises; paying rent for premises that can’t be used or occupied; loss of the benefit of a rent free period; or loss of trade while your pharmacy is closed.

It is important that the parties know what will happen if the contractor is delayed. This can be more straightforward to assess and even agree where one party is clearly at fault. The position is less clear when the cause of the delay is unforeseen (at least at the time of signing the contract) and can be the fault of one of parties or beyond the control of either party.

These are sometimes referred to as ‘neutral events’ as they are not in the control of the client or the contractor. By their nature, no one expects them to happen so they can catch the parties by surprise.

Some contracts include ‘force majeure’ (translated literally means “superior forces”) clauses which can cover the unexpected. Similar provisions are sometimes included in contracts to cover ‘Acts of God’. Until recently these provisions might have stirred purely an academic interest, but recent events demand a rethink by both parties when entering into a contract.

Force majeure clauses in building contracts do not usually defined what is meant by the term which makes its application less certain in any given circumstance. Even without being defined the term is accepted as including storms and floods but there can still be grey areas about whether it applies.

Even if it does apply, its effect or the extent of the effect on the project needs to be proven, particularly where there are other overlapping causes of delays which one party may be responsible for.

For smaller projects it is common to use the Joint Contracts Tribunal (JCT) Minor Works
forms of contract which do not include a force majeure clause. Many of the other contracts published by the JCT do include force majeure (without definition) as a ‘Relevant Event’. A Relevant Event is an event such as exceptionally adverse weather that a contractor can rely on to claim and entitlement to an extension of time.

This ground is often misunderstood. Contractors may try to rely on it just because it snowed in December. It is the weather that has to be exceptional rather than the delay caused by the event. So snow in July would be exceptional.

The decision whether to grant an extension of time will be the Contract Administrator’s not the client’s. To support such claims contractors would usually have to provide supporting data from the Met Office for the site location typically over a 10 year period.

So if a storm in is travelling over the UK, there may be limited grounds for claiming an
extension of time on this ground depending in its effect on your specific site at a point in time and possibly any other overlapping delaying events.

The Met Office issued an unusual RED alert for Friday 18th February 2022 (its most severe
weather warning) for Storm Eunice. This RED alert anticipated the record wind speeds, threat to life and widespread damage to property and infrastructure in parts of the UK.

Both parties should always take specialist insurance advice before starting any project, so it is clear who is insuring: the works, any existing structure any contents Different insurance policies for example have different definitions of ‘storm’ to determine whether a claim can be entertained. It also incumbent on contractors to ensure that a site is safe for its workers, which has to be a priority.

It should not be forgotten the Construction (Design and Management) Regulations 2015 impose duties on anyone commissioning construction works including duties relating to protection of members of the public, appointing the Principal Designer (usually the client’s architect) and the Principal Contractor (usually the main contractor) and notifying projects to the HSE.

So the takeaways for a pharmacist procuring works are:
Get advice on the appropriate form of building contract to use and any amendments, including covering unforeseeable events which the last few years have shown do happen.

Get specialist, project specific, insurance advice on construction insurance which would
include Contractors All Risks insurance, Public Liability insurance (to cover claims for injury or illness at work) and Professional Indemnity Insurance. Remember policy wording and
definitions vary so each project should be looked at individually.

Consider your responsibilities as the client under the CDM Regulations and ensure the appropriate statutory appointments are made to parties with the right experience and resources.

You can appoint a Client Advisor to assist you, but the contractors and professionals all have duties as designers to advise you as the Client under these regulations. In the event of unforeseen circumstances safety is paramount but do act promptly to take legal advice and consider any insurance notification requirements.

(The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. This article was written by Patricia Nathan-Amissah (Associate). For more information, please contact Patricia on +44 (0)1483 252638 or at [email protected].)

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