Coronavirus update #5 – Is it a good idea to claim COVID-19 as a global claim?

Delays caused by COVID-19 can be classified as a global claim by the contractors. However, the common practice of contractors making a global claim without attempting to substantiate cause and effect is discouraged by the Society of Construction Law protocol1. In our experience, global claims are generally vague and difficult to substantiate as they are often based on extensive evidence and resultant costs.  

Solid Support have recently attended a webinar organised by the Morrissey Law + Advisory outlining the current focus to be on the ‘change in legislative requirements’ and ‘change in work method’ instead of force majeure for most Australian Standard Contracts. As such, merely relying on COVID-19 as a global claim is not advisable. Solid Support suggests that contractors:  

  1. Identify individual delay events in the period of the COVID-19 pandemic.  
  1. Substantiate the impact of each individual event on the project completion date.  
  1. Submit the loss of productivity as a separate claim for the time and costs that could not be quantified using any of the individual delay events.  

In most cases, the contractor should be able to establish the causal link between the employer risk event and the extra costs, without the need to make a global claim.  

If you need further guidance on this matter, please get in touch with our experienced State Manager (NSW) – Peter Stathos (peters@solidsupport.com.au)  

1 Society of Construction Law. (2017). Delay and Disruption Protocol (2nd ed.). Hinckley, Leicestershire: Delay and Disruption Protocol. Retrieved from http://www.scl.org.uk%20is/