March 20, 2020
As the Covid-19 pandemic continues apace we thought it might be helpful to provide our clients with a short checklist of preliminary points to bear in mind when assessing the impact on your production activities. This is by no means an exhaustive list but just some of the key issues production companies should be considering:
1. Suspension and Force majeure provisions
Producers should look carefully at the force majeure, suspension and termination provisions in their productions contracts, including agreements for cast, crew, heads of department, studios/locations, vehicles and equipment hire. In particular producers should:
- Consider whether the occurrence of Covid-19 falls within the definition of “force majeure”.
- Check what payment (if any) obligations apply during periods of suspension and what termination rights are available to the crew/HODs etc.
- Comply with all notice provisions to ensure that any notices relating to suspension or termination are properly served.
- Check to see if there are any long-stop dates included in any talent agreements. If included, it is important to check to see if the long-stop date is subject to events of force majeure and/or suspension.
- Production insurance; policies should be carefully reviewed to see whether incidents such as Covid-19 are expressly excluded or excluded indirectly. It is possible that existing policies may provide some cover, for example, unavailability of crew due to actual Covid-19 illness or expenses incurred due to Civil Authority orders. However, even where such existing cover is in place, it is unlikely that such policies would cover losses arising from cast and crew self-isolating where they are not actually ill. It is also likely that new policies will contain broad Covid-19-related exclusions.
- Completion Guarantees; most new policies taken out since the outbreak will almost certainly exclude liability for Covid-19-related costs/overspend but older policies may provide some cover so a careful review is required.
- Directors; D&O policies provide some protection for individual producers who are company directors, however, these policies will be unlikely to provide cover for claims relating to breaches of health and safety legislation. Directors of production companies therefore need to think carefully about the welfare of their staff and ensure that they are not unreasonably risking their staff’s health in the light of government advice. If they do then directors could face personal liability that is uninsured and there may be even be criminal liability in extreme cases.
3. Delivery obligations
- Thought should be given to how delivery materials are stored and accessed. If materials are stored at a third party lab and that lab were to become insolvent, production companies should have in place measures to ensure that materials can be readily accessed.
- Outside delivery dates should be carefully reviewed and ideally extended out for a significant period if at all possible.
- It is hoped that the government will introduce further measures to protect businesses during the current crisis, nevertheless, directors of production companies should keep a watchful eye to ensure that the company does not continue to trade at the point when the directors know for certain that the company has no means to meet liabilities. If it does then directors could subsequently upon any insolvency be held personally liable for continuing to operate in these circumstances.
5. Health & Safety
- Productions should review their procedures to ensure so far as possible that they are doing everything reasonably practicable to safeguard cast and crew. As above, compliance with health and safety guidelines is a priority for directors of companies as there can be consequences of personal liability.
- Temperature testing on set – Please be aware that there are possible data protection considerations regarding this practice. There are very specific rules about using personal data relating to health and much more narrow (and stricter) lawful bases that organisations must apply in order to process data in this way, in addition to having to satisfy the usual lawful bases.
It is true of course that the industry as a whole is facing an unprecedented challenge, but our belief is that no one has a better skillset to weather these difficulties than our production community. Once the immediate crisis has passed, we are confident that the film and television industries in the UK, which already contribute so much to the national economy directly and indirectly and by way of job generation, will be well placed to maximise the opportunities created by the upsurge in demand for new content and will reprise their production activity with renewed vigour.
If you would like to discuss any of the points raised above in more detail then please do not hesitate to get in touch with your usual Wiggin contact. We are all working (remotely!) and are available to support our clients as usual.
We hope that you and your loved ones stay safe and healthy.