Scottish contractors demanding ‘Brexit clauses’ in contracts

Scottish contractors demanding 'Brexit clauses' in contracts

Jonathan Seddon

Scottish contractors are increasingly demanding “Brexit clauses” in construction contracts to ensure they are not liable for costs caused by a no-deal Brexit, The Times reports.

The move is sparked by concern that Britain’s exit from the EU could lead to increased costs and supply chain disruptions in the absence of a deal with the EU.

Jonathan Seddon, partner at Morton Fraser, said: “Contractors traditionally accept risks in terms of inflationary pressures on costs such as materials and labour.

“However, with the potential for a no-deal Brexit increasing, they are saying it’s impossible to accept the current exposure because the financial risks are too high.”

Mr Seddon, head of the firm’s commercial real estate team, added: “Given the Scottish government’s commitment to deliver housing and key infrastructure projects, as well as the private sector’s ability to take advantage of property development opportunities, this will have a huge knock-on effect on the lack of supply against demand across the central belt of Scotland for grade A office space and purpose-built student accommodation. It will also impact on the build-to-rent market. The potential for a sharp increase in costs could put a number of planned schemes on hold.”

Share icon
Share this article: