During last week’s highly anticipated Autumn Budget, the Chancellor, Jeremy Hunt, confirmed that the UK is currently in a recession adding to the many ongoing challenges already facing the construction sector. From shortages in skilled workers and materials, to the extraordinary rise in prices for materials and goods, to a lack of confidence, general inflation and a recession – they all have a huge impact. As ever, we want to help you navigate these difficult times and share below some practical tips to help protect your position within the supply chain.
Whilst in the past, parties to a project may have kept communication with each other on a need-to-know basis, the industry has reportedly noticed a shift in this behaviour as more and more frank and open commercial discussions are taking place (positive progress). Such commercial discussions are in the interest of all parties and can prove to be one of the most effective methods of ensuring the project meets its targets.
Some key examples of discussions which we have seen that benefit projects are:
Most importantly, remember that trust is key.
All parties will be affected by the economic climate in some way. They should therefore ensure they have a clear understanding of what the contractual terms are, the strength of their bargaining position and their legal standpoint before the works even commence – seeking legal advice is an invaluable step in that process. Often once a contract has been signed there is very little room for re-negotiations. Therefore, it is imperative to get things right before execution stage and below are just a few examples of how this can be achieved:
Finally, there is no denying that risks of delays and shortages are becoming more and more prominent in the market now and changes in a construction project will inevitably occur even with first-class preparation and project-management. Therefore, co-operation and effective communication should be treated with the utmost priority to ensure all parties are on the same page and there is an understanding of how every cog in the wheel is functioning.
Our Construction team is highly praised for its ability to “give the right solution, in the right time”. We empathise with all these challenges, and we want to help ensure projects continue successfully to support the construction sector and keep businesses afloat. From pre-contract negotiations to advice on particular points or issues, let us help you.
This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. Greenwoods Legal LLP is a Limited Liability Partnership, registered in England, registered number OC306912. Our registered office is Queens House, 55-56 Lincoln’s Inn Fields, London, WC2A 3LJ. A list of the members’ names is available for inspection at our offices in Peterborough, Cambridge and London. Authorised and regulated by the Solicitors Regulation Authority, SRA number 401162. Details of the Solicitors’ Codes of Conduct can be found at www.sra.org.uk. All instructions accepted by Greenwoods Legal LLP are subject to our current Terms of Business. VAT Reg No: 161 9287 89.