i-law

International Construction Law Review

A LOOK BEYOND THE LOCKDOWN1

JAMES PICKAVANCE

Partner, Jones Day (London)
The Covid-19 pandemic has had an unprecedented impact on the global economy and has created a number of challenges for the construction industry in particular. The current global economic shock, length of recession, and trajectory of the recovery will largely determine the nature and severity of these challenges. The overall economic consequence of Covid-19 are currently unknown in this unprecedented environment—
a “V,” “U,” “W,” “inverted square root,” or the even worse “L” may ultimately be the appropriate letters or symbols to describe the economic recovery.
Even as the world gradually eases out of lockdown, deals are rekindled and services are remobilised, no one doubts that the impact of the coronavirus pandemic will continue to be felt for months and possibly years ahead. The impact of Covid-19 on construction projects will vary significantly from jurisdiction to jurisdiction depending on a range of factors, including the severity of the pandemic, the nature and significance of government orders issued to address the virus, and the effect of government action taken to mitigate financial hardships resulting from the virus. Further, how owners and contractors respond to the easing of restrictions will be important and may themselves be the source of future claims.
This article is set out in two parts. First, a review of lessons learned for future project planning from a contracting, financing, and due diligence perspective. Secondly, the types of disputes that can be expected to arise from the pandemic.

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