Home » Climate Change – A Construction Contractor’s Risk?

Climate Change – A Construction Contractor’s Risk?

Posted by Simon Forsterling | 02 August 2018 | Construction & Infrastructure

Australian Governments at all levels recognise that climate change is occurring.  The NSW Government has gone so far as to publish a set of Climate Risk Assessment Guidelines.

You may have seen a requirement to take the guidelines into account included in your most recent NSW Government transport contract. Does inclusion of the guidelines in design and build contracts mean that the design needs to take into account climate change, effectively passing the risk of climate change onto the construction contractors?

It seems counter-intuitive that a Government would:

  1. recognise the risk of damage and consequent costs of climate change occurring;
  2. be the party that is in the best position to be able to take steps to mitigate the risk of climate change occurring; and
  3. seek to transfer to the construction contractor, the risk of damage and costs arising from climate change, whatever they might be.

The cost to a construction contractor of accepting such a risk is unknown.

Construction contractors should strongly reject any attempt by Governments to pass through Climate Change Risk. Climate Change Risk is a sovereign risk. The Government (and not construction contractors) are best placed to be able to do something about this risk.

I’d be interested in your view on this relatively new area of the law, and please do get in contact with me at [email protected] if you would like to discuss any other aspect of risk allocation in your construction contract.

Simon Fosterling is a Group Principal and a senior member of the construction and infrastructure team. If you have any questions, contact Simon via email [email protected] or phone +61 (2) 9016 0141

This article was first published on LinkedIn

This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues

Related Articles

2 Minutes Read

read more

Simplifying construction contract language

12 June 2018 | Construction & Infrastructure |

Construction law has its own language and each contract is like a dialect of that language.
If you don’t communicate using the …

5 Minutes Read

read more

Homeowners beware the building blues

09 April 2018 | Construction & Infrastructure |

Many owners enter into residential building contracts unaware of the risks associated with the contract terms that apply when the building …

3 Minutes Read

read more

5 tips for home builder compliance

19 March 2018 | Construction & Infrastructure |

I come across a number of builders and contractors who operate under a misunderstanding of what their contractual and legal requirements …

OUR AWARDS