Some contracts fall short when weather takes hold

reported that high rainfall levels in December had affected productivity on sites across the region. It has also been reported that the rainfall was the highest recorded for the last 10 years. This could give rise to a flurry of claims for extensions of time due to adverse weather but there can be a number of problems in substantiating such claims.

The starting point is the contract. If the contract is silent then the effects of weather are usually the contractor’s risk. Many standard forms of contract, however, contain a provision that entitles the contractor to an extension of time for delays caused by bad weather. More precisely, the term most commonly used is “exceptionally adverse climatic conditions”, as can be found in FIDIC’s Red and Yellow books. Whilst this phrase is better than some others, such as “inclement weather”, it still requires a subjective analysis that causes difficulties with the assessment of the extension of time due.

The term “climatic conditions” would cover a range of circumstances including extremes of temperature, high wind speeds and even perhaps sand storms, not just heavy rain. In this region, it is usually high temperatures, not rainfall, that affect productivity and cause delays, which is perhaps why some contractors were caught out in December.

“Exceptionally adverse” is generally taken to mean that the weather must be both exceptional in itself and adverse to the execution of the work. Exceptional means unusual in its severity, either in intensity or duration, with regard to the place and season. Demonstrating that the weather experienced was unusual involves an analysis of the weather experienced at the site compared to historical weather records. In practice, it can be difficult to establish the point at which the adversity of the weather becomes exceptional.

First is the problem of obtaining historical records of the weather recorded at the site. For most sites, they will not exist and so will have to be taken from the nearest weather station, which could be many kilometres away. The climatic conditions experienced at a weather station are unlikely to be the same as that experienced at a site, particularly in terms of rainfall and wind speed. This could prevent the weather station records from being a reliable benchmark, without which it can be difficult to demonstrate that the weather was unusual.

The second problem can stem from the type of information available from a weather station. If the only data available is a 24-hour average, it can be hard to prove that a particular weather event was exceptional, especially where it was very intense but short in duration.

Another difficulty is deciding what the return period should be for determining whether an event is exceptional. Should it be five years, 10 years, or more? Should the period relate to the duration of the contract? This is a particularly subjective part of the analysis and will likely lead to disagreements. Even with the benefit of good historical and contemporaneous weather records at the site, an analysis of such records is unlikely to lead to a definitive answer.

This position is complicated further if it can be argued that the “exceptionally adverse climatic conditions” need not occur at the site. The FIDIC clause makes no requirement that the conditions have to be experienced at any particular location. So let’s say, for example, that an exceptionally intense storm occurs some distance from but not at the site that results in the site being flooded, which delays the works. The contractor could argue that the meaning of the FIDIC clause is wide enough to include such situations.

The problems caused by the phrase “exceptionally adverse climatic conditions”, and demonstrating that they have occurred, could be overcome by incorporating a more objective approach. The UK’s New Engineering Contract adopts such a method. It provides that a compensation event has occurred if the magnitude of a weather condition experienced in a calendar month is shown, by comparison to weather data, to occur, on average, less frequently than once in 10 years. While this has its drawbacks, the approach could avoid arguments as to whether the climatic conditions were sufficient to trigger entitlement.

Returning to the approach adopted by FIDIC and other forms of contract, even if an exceptionally adverse climatic condition occurred, it must be shown that it in fact caused a delay. There will be no entitlement if an exceptionally adverse climatic condition occurred but had no effect.

Determining whether an exceptionally adverse climatic condition caused a delay will involve a detailed examination of the progress of the works at the time, the climatic event is considered to have had an impact. Records of labour and plant utilisation and downtime need to be assessed. This alone is unlikely to be sufficient so witness accounts will be needed.

As with any assessment of entitlement to an extension of time, the extent to which the contractor contributed to the delay should also be taken into account. One such instance might include where the contractor’s culpable delay caused the works to be carried out during a period of exceptionally adverse weather.

Few contracts give the contractor the right to claim additional costs incurred due to bad weather. Moreover, there is an increasing tendency for contracts to place all of the risks of weather on the contractor. This is done on the basis that the contractor is best able to deal with or control the risks. It is essential for the contractor to assess the risks and take account of them when bidding for the work.

Finally, the impact of weather on construction projects in the region could rise. The UK Meteorological Office reported in January that 2007 is likely to be the warmest on record globally due to factors such as solar effects, El Niño and greenhouse gas concentrations. This could result in unusually high temperatures during the summer months, which could have even greater impact on productivity and increase the number of claims for extensions of time.