Construction trends as a result of COVID-19 - one year on

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In June 2020, I wrote about the trends for the future of the construction industry that I saw emerging as a result of the COVID-19 pandemic.

Here is a review of that article and where we are one year on.

1 Modular Construction

Last year I mentioned that this was on the rise before COVID-19. The virus brought it into focus even more.  It is considered easier to socially distance when constructing and installing modular buildings rather than working on a traditional building site. Modular (or more correctly, modern methods of construction ‘MMC’) has gone from strength to strength over the past year, helped by the Government’s support for it in the Construction Playbook. Click here for a blog on the Playbook. We have a category in our blog devoted to MMC. Click here for further details.

2 Distribution Centres

Last year I said that our shopping habits had changed with remarkable speed and that many of us had turned to internet shopping and a lot of us have decided we quite liked it. I anticipated that the boom in internet shopping was  here to stay and that more distribution centres would be required. The production lines within such distribution centres are often constructed using the MF/1 form of contract.

Click here for our series of blogs, which we have added to over the last year, on distribution centres and warehousing (MF/1).

3 Health and Safety

This was a big change for the way construction sites work. The Construction Leadership Council issued Site Operating Procedures. At the time of my article last year, the latest version was version 4. We are now at –version 7, although not all versions have brought about major changes. Click here for more information on our blog on what these procedures involve.

4 Delay

Last year there had been (and continued to be) delays to construction sites as a result of COVID-19. These were two-fold – actual site closures during the peak of the first lockdown and the potential disruption caused by social distancing once sites opened up. There continues to be a potential for delays, including delays arising as a result of shortage of materials, which is only partly due COVID-19. Who could have anticipated the blocking of the Suez Canal? Responsibility for the time and cost of delay continues to be likely to be an area of dispute between parties.

5 Smash and grab adjudications

Last year I looked at the then recent case of J&B Hopkins Ltd v Trant Engineering Ltd [2020] EWHC 1305 - not so much because of the decision but because of the facts. In that case there had been a number of interim applications, in relation to one of these, interim application 26, Trant failed to serve both a payment and a pay less notice. There were subsequent applications where the relevant notices were served. Hopkins however brought an adjudication based on the failure to serve notices in relation to application 26. They were successful and the court granted judgement and refused a stay of execution. I reminded those that are the paying party to always serve the relevant notices otherwise you face a similar situation to Trant. With money tight it is likely that we will continue to see more of these sorts of adjudications.

6 Insolvency and termination

Last year I referred to the bill going through Parliament. I don’t think I expected the Corporate Insolvency and Governance Act 2020 to come into force so quickly (it came into force on 26 June 2020, shortly after my briefing was issued)  This Act has created major changes to what is meant by insolvency. Definitions have had to be amended to include for the new concept of a moratorium and a new form of restructuring arrangement. It has also had far reaching implications in relation to termination by a supplier, which in a construction context means a sub-contractor wanting to terminate its contract with the contractor or a contractor wanting to terminate its contract with an employer. Click here for our article on the Act shortly after it came into force.

7 Cladding

This is not related to COVID-19, but it was a trend we were seeing last year and that has continued. The Government is intent on ensuring that high rise residential buildings are safe. Remedial works continued during all lockdowns. During the first lockdown, on the 2 April 2020, the Government published its response to the ‘Building a Safer Future’ consultation which included confirmation that there would be a new national building safety regulator and that Approved Document B would be amended so that sprinkler systems and way finding signage would have to be installed in all new high rise residential blocks over 11 metres high. This followed the banning of the use of combustible cladding on all buildings over 18 metres high which contain flats and the subsequent launching of a consultation as to the lowering of this height to buildings over 11 metres high and to extending the ban to cover hostels, hotels and boarding houses.

Since then, in August 2020, we have had the Building Safety Bill and the Fire Safety Consultation. The bill plans to introduce a building safety regulator, a register of building inspectors and duty holders across the life of a building, including, once the building has been constructed, an Accountable Person.  The bill also proposes to deal with how remediation works will be funded. The bill is still progressing through parliament and it looks unlikely that it will become law this year. The consultation closed in March this year. 

We have also seen the Government say that it will pay for the removal of unsafe cladding in all residential buildings that are over 18 metres high (six storeys and over) and announce  a proposed new cladding tax and levy.

We can expect to hear more about cladding and safety measures on high rise buildings going forward.

Click here for our blogs on cladding and fire safety.

8 Environmental, social, and corporate governance (ESG)

So what else has happened in the last year? Well, the major change that I did not mention last year, is the rapid acceleration of Environmental Social Value, or ESG. Click here for our blogs on this. This has, in part been a result of COVID-19, in that the pandemic has given us all the opportunity to consider how we might do things differently in the future. The Government has supported this with its 10 point plan for a green revolution and the Construction Playbook mentioned above.

So, rather than the seven trends I mentioned last year, I now see eight trends. The next few months and years look like they will be a very interesting time for the construction industry.

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