CONSTRUCTION JOURNAL

Concurrent delay is contingent on circumstances

When there are two delay events impacting a construction project simultaneously or 'concurrently', case law can provide guidance to help clarify the entitlements of contractors and employers

Author:

  • Mary Lindsay
  • Mike Stewart

01 February 2024

Aerial photo of House of Commons in London

The term 'concurrent delay' is generally used when two or more delay events arise at different times, but their effects are felt simultaneously.

In this situation, which occurred for instance in Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848, the contractor will claim that a risk event for which the employer is responsible entitles the contractor to an extension of time (EOT) and sometimes prolongation costs, even though concurrent delay is being caused by a contractor risk event.

In contrast, the employer will claim that a contractor risk event entitles it to liquidated damages for delay.

Determining concurrent delay

It is normally more accurate to refer to the concurrent effect of delay events, with a focus on the simultaneous consequences, rather than the events themselves.

If employer and contractor risk events occur at the same time, but the effects are felt at different times, they are not considered concurrent, and the events will not give rise to concurrent delay.

If, however, the events occur at different times but the effects are felt at the same time, then they will likely give rise to concurrent delay.

The correct way to establish and deal with such delays in extension of time claims under English law was set out in Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd 70 Con LR 32.

In this case, the judge said: 'it is agreed 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.'

This approach was further explained in Walter Lilly & Co Ltd v Mackay & Anor [2012] EWHC 1773 (TCC). Here, the judge said where there are two or more events giving rise to delay and one of them entitles the contractor to an extension of time then this extension will be granted.

He went on to explain that the reasoning was based on the prevention principle. In this context, as a matter of English law, the prevention principle says that it would be wrong to deprive a contractor of an extension of time, to which it would have been entitled due to an employer risk event, but for the occurrence of a a contractor risk event.

In abstract terms, party A cannot require party B to adhere to its contractual obligations where party A actually prevented party B from complying with these.

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Contractor entitled to more time but not costs

The approach to concurrent delay was expanded on in De Beers UK Ltd (formerly Diamond Trading Co Ltd) v Atos Origin IT Services UK Ltd [2010] EWHC 3276 (TCC). It was found that 'the contractor is entitled to an extension of time but [it] cannot recover in respect of the loss caused by the delay'.

In this case the judge explained: 'the rule where delay is caused by the employer is that not only must the contractor complete within a reasonable time but also must have a reasonable time within which to complete.

'It therefore does not matter if the contractor would have been unable to complete by the contractual completion date if there had been no breaches of contract by the employer (or other events which entitled the contract to an extension of time), because [it] is entitled to have the time within which to complete [that] the contract allows or [that] the employer's conduct has made reasonably necessary.'

In relation to the damages that a contractor may be able to recover, the judge added that the 'contractor cannot recover damages for delay in circumstances where [it] would have suffered exactly the same loss as a result of causes within [its] control or for which [it] is contractually responsible.'

The same practical approach – that if there is an event for which the employer is responsible and another for which the contractor is responsible, and both are causes of delay, then the contractor will be entitled to an extension of time but not costs – was also taken in Thomas Barnes & Sons plc v Blackburn with Darwen Borough Council [2022] EWHC 2598 (TCC).

The delaying events and their effects must be determined, and a contractor must show that the employer's act has rendered it 'impossible or impracticable for the other party to do the work within the stipulated time'.

As stated in Adyard, the act relied on must actually prevent the contractor from carrying out the works within the contract period; or in other words must cause some actual delay.

Protocol helps define occurrence of delay

Good and detailed project records will be invaluable to support a claim. The Society of Construction Law (SCL)'s Delay and Disruption Protocol is widely accepted across a number of jurisdictions as the correct approach in assessing the existence of any concurrent delay.

This states that: 'True concurrent delay is the occurrence of two or more delay events at the same time, one an Employer Risk Event, the other a Contractor Risk Event, and the effects of which are felt at the same time.'

'For concurrent delay to exist, each of the Employer Risk Event and the Contractor Risk Event must be an effective cause of Delay to Completion (i.e. the delays must both affect the critical path).'

'Where Contractor Delay to Completion occurs or has an effect concurrently with Employer Delay to Completion, the Contractor's concurrent delay should not reduce any EOT due.'

Once concurrent delay is established, any delay for which the contractor is responsible should not reduce the extension of time to which it would be entitled as a result of the event for which the employer is responsible.

As to prolongation costs, the SCL protocol suggests that the contractor should only be entitled to these if it can distinguish the additional costs caused by the event for which the employer is responsible from those caused by the contractor.

In other words, the contractor cannot recover costs that it would have incurred as a consequence of its own breach.

Again, record-keeping plays a key part for both a contractor and employer in establishing the costs caused by a relevant event.

Contract provision prudent in dealing with risk

While jurisprudence on the handling of concurrent delay has developed significantly over recent years, the manner in which concurrent delay will be handled is also influenced by the parties' agreement in the contract.

Providing the relevant rules on contractual interpretation are followed, the English courts will uphold agreements to carve out or exclude the risk of concurrent delay by allocating the risk to one party or the other, without offending the prevention principle.

This was shown for instance in North Midland Building Ltd v Cyden Homes Ltd [2018] EWCA Civ 1744.

As an example, the FIDIC 2017 suite of contracts includes a clause that allows parties to agree how concurrent delay should be dealt with.

The guidance notes to the 2017 suite acknowledge that there is not an international consensus on this, but point to the SCL protocol as a suggested means of doing so.

'The contractor cannot recover costs that it would have incurred as a consequence of its own breach'

Good record-keeping advised

Further to the cases referred to above, the judge in Saga Cruises BDF Ltd v Fincantieri SpA [2016] EWHC 1875 (Comm) provided some helpful guidance with reference to the judgment in Adyard.

She identified the following points as being key.

  • Concurrent delay only exists where 'both events in fact cause delay to the progress of the works and the delaying effect of the two effects is felt at the same time'.
  • The event relied on must actually delay the contractor.
  • Neither party should rely on notional or theoretical delay, but must prove that the event or act causes actual delay to the progress of the works.

If concurrent delay arises, the contractor must rely on records or other substantive evidence to prove its case and support a claim for an extension time, and avoid any claim for damages for delay.

Parties may however want to pre-emptively avoid the uncertainty or difficulties of establishing concurrent delay by addressing this issue in the contract.

How this is done will very much depend on the circumstances and each party's appetite for risk – a contractor forgoing the opportunity to claim concurrent delay and an extension of time when concurrent delay occurs increases its risk of failing to complete the works on time.

A version of this article was originally published by Gowling WLG 

Mary Lindsay is legal director of construction and international arbitration at Gowling WLG

Contact Mary: Email

Mike Stewart is a partner specialising in construction and international arbitration at Gowling WLG

Contact Mike: Email

Related competencies include: Dispute management, Legal

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