CONCURRENCY IN DELAY CLAIMS

WHAT DOES IT MEAN AND WHY DOES IT MATTER?

Mark Tiggeman Partner 14 July 2010

Overview
SOME DEFINITIONS HOW DELAYS ARE ASSESSED CASES ON APPORTIONMENT WHY CONCURRENCY MATTERS?

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What is concurrency?
Society of Construction Law Delay and Disruption Protocol definitions Oxford Dictionary: Acting in conjunction; cooperating For today competing causes of delay arising during a single period and caused by more than one event. Key factor is that time delay is suffered, not when it occurs.
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How is delay assessed?

Critical Path Method (CPM) - Traces the logical sequence of tasks that directly affect the date of project completion Courts expect CPM see Balfour Beatty Construction Ltd v The Mayor and Burgesses of the London Borough of Lambeth [2002] EWHC 597 (TCC)

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Scottish cases on apportionment

City Inn v Shepherd Construction*
Works completed over 11 weeks late Architect awarded an extension of time of only two weeks Employer wanted to levy more than 9 weeks of liquidated damages at 30,000 per week Contractor wanted the full extension of time plus loss and expense at 11,519 per week
*City Inn Ltd v Shepherd Construction Ltd [2007] CSOH 190

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In City Inn, the concurrent causes of delay were:

Contractor - late variations or instructions issued by the architect; and Employer - late or defective work to two areas of work Not possible to do a critical path analysis of the delay as there was not an appropriate initial program To what extent had the gross delay been caused by the delays of the employer and the contractor? All delays identified by the parties were concurrent causes of the gross delay Court apportioned the delays by reference to common sense and a consideration of what was fair and reasonable

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Tort v Contract
Tort
Law is reasonably clear Claimant can recover in full if he establishes that the cause for which the defendant is liable caused or materially contributed to his loss*

Contract
Position less clear and, therefore, potentially more difficult Courts reluctant, prefer to rely on bargain of risk for
Liquidated damages Extensions of time Loss and expense

*Fairchild v Glenhaven Funeral Services Ltd [2003] 1 AC 32, HL

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Laing Management (Scotland) Ltd v John Doyle Construction Ltd*

Laing claimed a 22 week extension of time and 4.8 million in loss and expense Court held:
Where the loss was caused both the employer and by the contractor, then the contractor must establish the employers delays are the dominant cause of the loss similar to position in tort

Followed in Maersk Oil UK Ltd v Dresser-Rand UK Ltd

if an apportionment, based on the evidence is possible, albeit difficult, it would be manifestly unjust to deny a remedy, where there are plain contractual breaches by the defendant/employer.*
*Laing Management (Scotland) Ltd v John Doyle Construction Ltd [2004] BLR 295 * [2007] EWHC 752 (TCC). See also: London Underground v Citylink Telecommunications Ltd [2007] EWHC 1749 (TCC) for further support for the decision in John Doyle.

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Why does concurrency matter?

Different delays have different consequences for both employers/certifiers and for contractors 3 categories of delay: Compensable delay events that entitle the contractor to an extension of time and to loss and expense for costs flowing from that event Excusable delay events that entitle the contractor to an extension of time but where the contractor bears the risk of additional costs that may flow from that event; and Culpable delay events that do not entitle the contractor to either time or money
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Concurrent delay and extensions of time

For concurrent delays, the employers default is to be causative of the delay. Otherwise the employer could levy liquidated damages when it is in default. See Peak Construction v McKinney* Henry Boot v Malmaison*
Parties agreed position was that if there are two concurrent causes of delay, one of which is a relevant event, and the other is not, then the contractor is entitled to an extension of time for the period of delay caused by the relevant event notwithstanding the concurrent effect of the other event.

Overarching principle: Contractor allowed an extension of time where there are concurrent causes of delay one of which is its fault and one of which is not.
* Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd 1 BLR 111 * Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999) 17 Con LR 32

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Concurrent delay and loss and expense

No overarching principle, will depend on facts: Compensable delay + excusable delay = an apportionment exercise should be carried out based upon the relative significance of each event. Compensable delay + culpable delay = apportionment is unlikely to be appropriate. The contractor is only likely to recover his loss and expense to the extent he can show that the compensable delay was the dominant cause of delay.
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Conclusions
Concurrent delays are those which arise during a single period, caused by more than one event. It is the time that the delay is suffered, and not the time that the event occurs, that is key. Delays are usually and best assessed by a critical path analysis and contractor should update their programme. Concurrency matters because different delays have different consequences for contractors and employers and because extensions of time and loss and expense claims are dealt with very differently in construction contracts. Contractors will be generally entitled to an extension of time where there are concurrent delays, even if one of those delays is due to his breach. The City Inn and John Doyle cases decided in Scotland have opened the door to an apportionment where there are concurrent delays, but only for loss and expense claims, not for extensions of time. The project owns the float and it is available on a first come, first served basis.

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