Michael Earwaker
Corrs Chambers Westgarth, Sydney

Ana Candida De Melho Carvalho
BMA Advogados, São Paulo

On 5 November 2025 at the IBA Annual Conference in Toronto, Canada, a panel presented on the topic: ‘Risk allocation and force majeure revisited against the background of climate change and abnormal weather.’ This article summarises the presentations of the speakers.

Chris Bereise: Accuracy

The premise of Chris Bereise’s paper was that the effects of climate change on construction projects are no longer isolated or exceptional, but reflect a structural shift in the climate regime. While annual precipitation volumes may appear relatively stable over several decades, the data shows a marked increase in extreme events, with a clear acceleration since the 1980s, and major climate events – particularly floods – having more than doubled since the 1960s. These shifts have direct operational consequences for construction sites, including shutdown days, extended recovery periods, and systemic disruption to workforce availability, logistics and critical resources.

Bereise argued that historical references used to define what is ‘normal’, ‘foreseeable’ or ‘exceptional’ are losing their relevance, and that traditional contractual frameworks are increasingly ill-equipped to absorb repeated climate shocks.

In response, Bereise advocated for a structured, data-driven approach to risk allocation, encompassing the redefinition of what constitutes a qualifying event, the integration of predictive climate models and probabilistic approaches as contractual references, the transformation of mitigation into an enforceable operational framework, and the treatment of causation as a contractual object grounded in admissible data.

This approach, Bereise concluded, is a prerequisite for ensuring that projects remain executable, financeable and legally robust in an environment where uncertainty has become the norm.

Katherine Bell: Schellenberg Wittmer

After introducing the topic with an overview of in which ways extreme adverse weather may impact construction sites, Katherine Bell provided a comparative assessment of the extension of time and force majeure relief provisions in two standard form contracts and a third, bespoke contract.

The two standard forms considered were the FIDIC Red Book 2017 and American Institute of Architects (AIA) Contract A201-2017. Both have provisions that give relief to the contractor in the event of certain events, with the FIDIC provisions referring specifically to ‘exceptional adverse climatic conditions’ (in the extension of time clause) and ‘natural catastrophes’ (in the force majeure or ‘exceptional events’ clause). While the drafting of the provisions in the separate contracts was quite different, there were certain common themes in the drafting.

Key themes were the requirements of exceptional weather conditions, unforeseeability, causation, notice and mitigation. This necessarily posed the question, how do these clauses operate in the context of weather, which is the ‘new normal’ and what relief mechanisms should be in contracts which adapt to these circumstances.

To help address this question, Bell concluded by examining a bespoke contract that prescribed with precision what weather and other conditions would need to occur in order for the contractor to be granted relief. Bell asked the audience to consider if contracts should be targeted towards these issues so as to give parties greater certainty of which risks they have assumed.

Angus Rankin: Vinson & Elkins

Angus Rankin’s presentation addressed the seminar topic by reference to the specific issues confronting offshore wind projects. The weather dependency of these projects demands special consideration from the parties to allocate risk.

For weather, a typical approach is for the contract to set a baseline that is probability driven, with a 50 per cent probability (P₅₀) being a common baseline. However, in some negotiations, contractors are being asked a price a P₁₀₀ risk. Rankin said it was an open issue as to what level of specificity in these clauses contractors would accept.

Another issue that can arise is the propensity of excusable delay to shift the working time into unfavourable weather periods and/or jeopardise the availability of key vessels. The loss of a vessel slot is usually a ground for suspension by the contractor.

These unique risk allocation provisions are in addition to those more commonly found in construction contracts, such as generic force majeure clauses, health and safety, and mitigation provisions.

As a final observation, Rankin posed the question as to what relief an offshore wind developer may be able to secure in the event of long-term weather patterns affecting the financial viability of the project.

José María Pérez: Bredin Prat

José María Pérez presented a speculative reflection on how emerging international public law obligations on states may influence risk allocation in infrastructure projects. He noted that positive obligations on states to anticipate, prevent and mitigate the effects of climate change are increasingly recognised by international and European courts. What began as policy expectations is gradually being transformed into enforceable legal duties:

• In 2024, the European Court of Human Rights in the case Klimaseniorinnen v Switzerland found Switzerland in breach of the European Convention on Human Rights for failing to protect individuals from serious climate-related risks, notwithstanding the existence of sufficiently reliable indications that anthropogenic climate-change exists.
• In 2024 and 2025, three major international courts (the International Tribunal for the Law of the Sea, the Inter-American Court for Human Rights and the International Court of Justice), each held that states are under a duty, under both treaty law and customary international law, to prevent and remedy climate-related harm.
• Pérez explained that while these obligations are directly incumbent upon states, not private actors, they could have an impact on risk allocation mechanisms in the infrastructure/construction sector on at least two intersecting levels:
• a ‘vertical, top-down’ level, where, as states adjust and reinforce environmental policies and planning, permitting standards and impact-assessment requirements, the wide margin of appreciation left to states in respect of the choice of means to address these new obligations could furthermore be a source of regulatory uncertainty/unforeseeability; and
• a ‘horizontal, contracting parties’ level, where private parties may seek to ‘contractualise’ the consequences of these new state duties through climate-action related representations, information-sharing duties on environmental baselines and adaptive/relief clauses covering future regulatory measures, particularly as the unforeseeability element of force majeure becomes harder to invoke.

Michael Earwaker is a partner at Corrs Chambers Westgarth in Sydney. He can be contacted at michael.earwaker@corrs.com.au. Ana Candida De Melho Carvalho is a partner at BMA Advogados in São Paulo. She can be contacted at acmc@bmalaw.com.br.