April 7, 2020

The impact of health emergency prevention provisions on the execution of tender contracts and concessions

by Studio Valaguzza in Deepening

The ongoing succession of regulatory provisions necessary to contain the epidemiological phenomenon Covid-19 has had and is still having a dramatic impact on the construction sector, creating problems related to the suspension of construction sites or the anomalous progress of work. This situation of legal and economic uncertainty about the possible future repercussions that the measures taken and the consequent action adopted could have on existing contracts concerns both companies, for fear of not being able to deal with after the work suspension, and clients, for fear of not being able to hold up a huge wave of reserves and claims for compensation.
There are many questions that will need an answer once the emergence will be over.
For instance, if the performer has been unable to meet the agreed deadlines, which legal measures are provided to protect him? He will certainly not be considered in default. The recent Art. 91 of Law Decree no. 18 of March 17, 2020, which expressly provides that Covid-19 emergency situation and the related containment measures must always be evaluated in order to exclude the debtor’s liability for default, delay and the consequent obligation to pay damages, goes in this direction.
Moreover, will companies get financial support since the site closing has been forced on them? How does the suspension of site activities work? Will the increased costs incurred by the companies be compensated for? Will abnormal developments entitle them to compensation? And who, if any, will have to pay? Do the measures imposed by the government fall within the case of force majeure or the so-called factum principis?
With the aim of providing a practical guide to economic operators of the sector, we have tried to give a legal answer to the most interesting questions trying, from time to time, to balance the needs of the performers with those of the tendering authorities.
The objective that all of us, not only lawyers, must follow is to avoid face-to-face confrontations between the parties that could crowd the courtrooms when, at the end of the emergency, it will be time to draw the conclusions. Moreover, for this reason, we promote the use of alliance contracts, special types of multilateral and flexible contracts, of Anglo-Saxon origin, which allow transforming the negative externalities connected to the execution of a contract (as in the case of the diffusion of COovid-19) into positive externalities, through the creation of a network of positive interactions.
If you are interested, you can ask for the free in-depth study by sending an email to info@studiovalaguzza.it.