We are cognizant of the overflow of information you are receiving in respect of COVID-19. As a result, we are trying to keep that information flow focused on very specific items relevant to your day-to-day construction activities.

One such issue relates to tolling agreements.

If you find yourself needing to focus on simply maintaining some degree of productivity on your current project and would prefer not to expend resources on dispute resolution for the immediate time being, and the mandatory timeline steps that are often contained in your contract (see GC 8 of the CCDC2 for example), then a tolling agreement might be of assistance.

What is a tolling agreement?

A tolling agreement is a contract whereby the parties simply agree to suspend any operative timing elements that might be accruing for the time being under the applicable contract and/or the two-year limitation period under the Ontario Limitations Act.

Effectively, you are simply freezing time in respect of dispute resolution for the time being until one of the parties to the tolling agreement provides notice that it wishes to “unfreeze” time accordingly and resume the time clock that had otherwise been suspended by the tolling agreement.

Once a tolling agreement is considered, the keys become:

• reviewing your particular contract with a focus on the change management, payment, claims and tension of time/delay provisions to make sure that the appropriate notices are being provided;
• then a review of the dispute resolution mechanisms available in the contract;
• if the decision is made to “park” your particular claim or dispute, AFTER NOTICE OF THAT CLAIM HAS BEEN MADE AS PER YOUR CONTRACT, in consideration of the appropriate “effective date” is needed;
• defining what is captured in terms of the “dispute” or “disputes” that are being tolled with a very detailed description, and
• the steps to lift the tolling agreement should one party wish to resume the time clock on dispute resolution (typically a 10 day or 30 day notice period).

During the application of the tolling agreement, the parties are still free to discuss and try to resolve the disputes or may simply choose to focus on getting the work done and parking there dispute to a more convenient time.

Conversely, if your dispute is in respect of compensation, you may want to opt to not consider a tolling agreement and simply continue on with the current timelines as a measure of achieving resolution of your claims on an as quick as possible basis.

This article was written by Dan Leduc (dan.leduc@nortonrosefulbright.com) with input from the Norton Rose Fulbright LLP Ottawa Construction Law team including, Mark Gallagher (mark.gallagher@nortonrosefulbright.com), Meghan Fougere (meghan.fougere@nortonrosefulbright.com), Erika Woolgar (erika.woolgar@nortonrosefulbright.com) and Crystal Li (crystal.li@nortonrosefulbright.com).