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Builders fear post-COVID litigation

There is a fear that a wave of claims could be pursued in Victorian courts as a result of the disruption to building, construction and development sites during Melbourne’s COVID-19 lockdowns.

As a result of both restrictions and lockdowns imposed by the Victorian State Government, there have been huge delays in the completion of both large and small scale building projects for builders, developers and associated industries. A very real threat to builders as a result of these delays, is the pursuit of claims for liquidated damages (compensation) payable for delivering building jobs late.

Whilst the construction industry did continue to operate throughout 2020, the extent of the restrictions imposed (at one point only 25 per cent of the workforce allowed on job sites) has had long lasting effects. The Master Builders Association estimated that during the February 2021 five-day “circuit-breaker” lockdown, the industry lost $450 million in economic activity each day which included $63 million in lost wages. With further lockdowns being imposed by the State Government in Victoria, these losses for the industry will continue to accrue.

Further, Master Builders Association are concerned that many construction contracts do not include “act of God” or “force majeure” clauses or, although not yet determined by the Courts, that the partial restrictions on the building industry may not be considered sufficient so as to rely upon these contractual clauses.

As a result of these concerns of the building industry, the State Government is currently considering a “COVID-19 contracting framework”, which would establish a mediation model attempting to resolve disputes without the need to resort to litigation.

Our building lawyers and dispute resolution lawyers in our Property & Development and Commercial Business & Disputes Teams are able to assist in providing advice on all building, subcontractor and related contracts and any dispute you might be contemplating or involved in.

Please contact one of our Principals, Kristy Muhlhan, Meghan Warren or Rosy Roberts to discuss further

Insight written by Rosy Roberts

Contacts

Kristy Muhlhan

Principal

Kristy Muhlhan

Principal
LL.B (Hons) GRAD DIP. L.P., GAICD.
Since 2014, she has been an owner and Principal of the firm and has mastered a broad range of essential commercial and business skills which go hand in hand with the work she does for...

Meghan Warren

Principal

Meghan Warren

Principal
LL.B GAICD B.Bus (FinPlan)
Meghan is one of the few lawyers in Australia admitted in the State (Victoria) and Federal jurisdictions of Australia, and as an Attorney at Law to the New York State Bar in the United States.

Rosy Roberts

Principal

Rosy Roberts

Principal
LL.B (Hons) B.A GAICD
Rosy has extensive experience in Litigation & Alternative Dispute Resolution having represented clients in all Victorian State Courts and the High Court of Australia. She is also a VCAT appointed Administrator.

Stewart Davis

Associate

Stewart Davis

Associate
LL.B (Hons) B.Com
As well as property law, Stewart has had exposure to VCAT administration matters and commercial law, particularly servicing developer clients.

George Hanger

Associate

George Hanger

Associate
LL.B BA
George was admitted to legal practice in May 2015 after completing a Bachelor of Arts at the University of Melbourne and a Bachelor of Laws at Monash University.

Tamara Maksimovic

Lawyer
LL.B
Tamara’s role is primarily in residential conveyancing.

Emma Dickens

Paralegal

Emma Dickens

Paralegal
Emma previously completed a Bachelor of Legal and Dispute studies at RMIT University in 2015.

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