Poking holes in our umbrella of protection

Barbados’ economy is based on contract arrangements. One party (the contractor) offers a service, and the service’s recipient agrees to pay under agreed terms.

Stopping a contractor from working is very risky. Courts have awarded costs to contractors who were unjustifiably stopped from working. If the Government stops all contractors from working in Barbados, then each contractor may have a valid financial claim against the hiring party.

If the contractor is successful, then the hiring party may have a valid claim against the Government, who stopped the work. The public is then exposed to tax increases to pay for successful contractor claims.

Force Majeure

Exceptional unforeseen events can prevent a party from working. If that event is beyond the responsibility and control of the party, it can be called a Force Majeure event.

Typical Force Majeure events include: wars, riots, toxic spills, and natural catastrophes. These events can prevent a contractor from working for the duration of the impact.

The COVID-19 State of Emergency mandated that all construction work must stop. The lone exemption was the Quarantine and Isolation centre at Harrison Point.

In a fair contract, a Force Majeure event gives both parties the confidence of stopping and resuming work, with no financial penalties. That is because no one is at fault. Such contracts prevent contractors from financially benefitting from national disasters.

Barbados’ COVID-19 State of Emergency may be classified as a Force Majeure event, which should protect: contractors, the hiring party, the Government, and the public. No one should be penalised, and no one should benefit, because we are all in the same position.

Our national protection appeared to be compromised, when the Government reportedly allowed the contractors at the Airport to resume working before other contractors. Suddenly, we were not all in this together.

The reason given is gravely concerning. The Government claimed that stopping the work “would have triggered a force majeure breach of the contract”. What type of contract is the Government using?

Is having a Force Majeure breach not in the public’s best interest? Does allowing the airport contractor to work, while others are forbidden, not weaken the argument that COVID-19 is a Force Majeure event that protects us all?

Does this resumption not entitle contractors to costs that they would not be entitled to in a Force Majeure event? Are we all now exposed to tax increases to pay for unnecessary contractor claims?

Safe and stable sites

We unsuccessfully pleaded with the Government to allow all contractors no more than two days to put their sites in a safe and stable condition. This is critical to mitigate Force Majeure events.

If such mitigation measures are not allowed, contractors may be entitled to the additional costs of repairing any damaged work that was not allowed to be made stable. To protect us all, the Government is strongly urged to critically review the advice it is receiving, and reverse course with dispatch.

Let me disclose that I am not a lawyer. However, I am a Member of the Chartered Institute of Arbitrators, and have resolved many construction contract claims and disputes over the past 20 years, to the satisfaction of both parties. This includes claims of Force Majeure.

Grenville Phillips II is a Chartered Structural Engineer and President of Solutions Barbados. He can be reached at NextParty246@gmail.com.