delays and cost claims in common law and civil law
Again, the contract should be checked for changes in legal provisions, as these may allow a contractor to claim costs if specific legislative measures adopted in the wake of the pandemic resulted in additional costs. The success of a law change request will depend on the specific facts and how the additional costs arise and are presented.
Civil law systems
Civil law systems may provide for additional legal costs remedies. These should be taken into account when submitting claims for additional costs due to the pandemic.
As with common law systems, the starting point for requests for costs will be what is provided for in the contract. In the absence of express provisions, the applicable breach of contract argument in “constructive acceleration” cases may also be available in civil law systems. The obligation of “good faith” contained in some civil codes can provide here an additional legal basis, if the entrepreneur can demonstrate that he has informed the employer of the impact suffered, the need to accelerate at the expense of the employer if the employer intends to enforce the initial completion date and the estimated cost of this acceleration.
Law change claims may also arise and may be invoked when the contract contemplates expense claims for changes in law. These would be subject to the same need to demonstrate that the costs result from the specific legislative measures invoked.
Finally, the main difference from a common law system is that a number of civil law systems also recognize the possibility of reducing an excessively onerous obligation or restoring the “lost” economic balance of the contract, when the one or the other was caused by unforeseen circumstances. The French legal system calls this the doctrine of “unforeseen” which, since 2016, has been governed by the French Civil Code. The United Arab Emirates Civil Code contains similar provisions, allowing a judge or arbitrator to reduce an onerous obligation to a reasonable level if an unforeseen exceptional circumstance has made that obligation excessively onerous and the person charged with the obligation is threatened with “serious loss”.
The specific requirements of each legal system will have to be met before these provisions apply, and these should be checked in detail. In some cases, the test is quite high.
Causal or causal link
Regardless of the type of applicable law, all time and expenses claimed must be related or related to the event on which the law is based. The necessary link between cause and effect cannot be underestimated even in the context of an event as seemingly obvious as the Covid-19 pandemic.
Obligation to mitigate
The parties to a construction contract are required to mitigate as much as possible any damage or loss resulting from the Covid-19 pandemic.
In common law systems – and certainly in England and South Africa – there is an obligation to mitigate. A similar obligation also applies in civil law. The difference lies in the origin of the obligation.
In England and South Africa, the obligation to mitigate applies as a common law principle adopted in the measurement of losses:. In some civil law systems, the obligation arises from the broader – and mandatory – obligation to act in good faith.
In both systems, the exact scope of the mitigation obligation will be defined by reference to the specific facts, the cost of the mitigation measures versus the potential loss, market conditions, etc. The best practice when presenting a complaint is to show that mitigating measures have been considered.
Standard of proof
The standard of proof is the level or degree of proof that the judge or arbitrator will require with respect to causation and quantum if a claim has been submitted to them.
In common law jurisdictions, the standard of proof to be met is the balance of probabilities: that is, it is more likely than not that the delay or cost was caused by the alleged event. In most civil law jurisdictions, there is no defined standard and judges and arbitrators have more latitude, which may lead to a stricter standard than that applicable under common law.
In international arbitration, even if civil law applies, arbitrators can be influenced by the common law standard and, if the underlying legal system gives them that discretion, they can apply a “paramountcy” approach. of probabilities ”.