PANDEMIC
PANDEMONIUM!
Construction claims and COVID-19
By Krista Chaytor, Michael Swartz and Brian Kuchar, WeirFoulds LLP
As the economy sputters back to life following the
interruption caused by COVID-19, members of the
construction industry are surveying the economic
havoc wrought by the pandemic and considering
how to recoup their losses and move forward. This article explores
some of the issues surrounding delay claims and offers
guidance to contractors.
Characterizing the claim
Before making a claim for an extension of the contract schedule
or a change in the contract price, contractors should
review the terms of their construction contracts. For projects
using a standard CCDC-2 Stipulated Price Contract, for
example, requests for an extension of time and costs for delay
will likely fall under general conditions 6.5.2 and 6.5.3 (subject,
of course, to any supplementary conditions).
LEGAL
GC 6.5.2 states that if a contractor is delayed in their performance
of the work “by a stop work order issued by a court
or other public authority,” provided the delay was not due to
any act of the contractor or those within their employ, the
contractor is entitled to both an extension of time and reimbursement
of “reasonable costs” incurred due to delay.
GC 6.5.3, otherwise known as a force majeure clause, entitles
the contractor to an extension of time, but it does not
entitle the contractor to costs incurred as a result of the delay.
The ability of a contractor to recoup costs of a delay will
depend largely on whether the work stoppage is characterized
as the result of a “stop work order,” or a force majeure event.
In Ontario, construction projects were temporarily
brought to a halt by an emergency order (the Emergency
Order) that was passed under the province’s Emergency
Management and Civil Protection Act. The Emergency Order
ZHENGZAISHANCHU/123RF
Ontario’s Emergency Order required non-essential
construction projects (with certain limited exceptions)
to suspend operations for the duration of the emergency
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