CONTINUING PROFESSIONAL DEVELOPMENT

Maximum Period 3 Hours

CONCURRENT DELAYS

A Comprehensive Review

By

Roger Knowles

CONTENTS

What is the problem

Sources of knowledge

Causes of delay

Basic legal principles

1. Prevention principle

2. Burdon of proof

3. A party cannot benefit from it’s own errors

Theories derived from text books and legal cases

1. Devlin approach

2. Decision in Malmaison

3. First past the post

4. The dominant cause

5. Apportionment

6. But for test

7.

Society of Construction Law Delay and Disruption Protocol

Summary

Standard Questions

Model Answers

CONCURRENT DELAYS

What is the Problem?

Delays to the progress and completion of the works come in all shapes and sizes. The

delays can be attributed to many reasons with their affect on progress and completion

sometimes obvious or as is often the case somewhat obscure. Are they on the critical

path and how is progress and completion affected? This begs the question as to which

critical path is involved, the one included in the original programme; when the event

occurred or at the time of practical completion? Was there more than one cause of

delay and what was the effect of each one on progress and completion? It is unlikely

that the delays all began and ended at the same time. There is usually some element of

overlap at the beginning and end of the delaying events. How is this to be

accommodated?

How does the contract deal with delays? Which events entitle the contractor to an

extension of time only or provide an entitlement to both time and reimbursement of

associated financial losses?

It can easily be seen that administering a contract in relation to delays is not a straight

forward matter.

Delays can be excusable delays which may be either due to fault by the employer or

his agent such as late access or delay in issuing drawings or delays due to a neutral

event such as excessively adverse weather or force majeure. Inexcusable delays are

those which are due to fault on the part of the contractor or his agents.

Sources of Knowledge

There are several sources of information which provide advice as to how contractually

the problems relating to concurrent delays should be resolved. The three main sources

are:

• Legal principles explained in text books

• Caselaw

• The Society of Construction Law Delay and Disruption Protocol

Causes of Delay It can be seen from the following that there are several situations which may occur

and require unravelling.

Delays which are concurrent may result from one of the following sets of causes:

1. Both contractor and employer caused the delay where the employer delay

would normally entitle the contractor to more time and money.

2. The contractor’s delay and a neutral event where the neutral event would

normally entitle the contractor to more time but no additional cost

3. Employer’s delay and a neutral event

4. A neutral event and one which entitles the contractor to both time and

financial compensation

5. Employer’s delay and one which entitles the contractor to both time and

financial compensation

7. Contractor’s delay and one which entitles him to both time and financial

compensation.

Basic Legal Principles

In attempting to unravel the problem of concurrent delay it is necessary to examine

some legal principles which may be applicable which include

1. The Prevention principle

This was established over one hundred years ago as explained in the decisions in

Roberts v The Bury Improvement Commissioners (1870) and Wells v Army and

Navy Co-operative Society (1903). In the later of these two cases it was said:

“In the contract one finds the time limited within which the builder is to do his

work. This means, not only that he is to do it within that time but it means also that

he is to have that time within which to do it.”

Keith Pickavance in his book Delay and Disruption in Construction Contracts at p 352

states:

“Lastly , and this is a legal conceptual problem the rules which apply to recovery of

actual damages for delay are not the same rules that apply to the relief of liquidated

damages for delay . If Cs progress on the critical path has been interfered with by

Ds act of prevention then C must be given sufficient time to accommodate the effect

of that and be relieved for liquidated damages for a commensurate period”

In other words the employer must not prevent the contractor from completing on time

as if this occurs the contractor will be absolved from liability for late completion.

2. Burden of Proof

This requires the injured party to show that damage caused results from a breach of

contract by the other party. Where there is more than one cause of delay it may be

difficult to show that the cause of delay results from the breach. Keating On Building

Contracts 7th

Edition as at p 246 with regard to the burden of proof approach states:

“ If part of the damage is shown to be due to a breach of contract by the plaintiff,

the claimant must show how much of the damage is caused otherwise than by his

breach of contract, failing which he can recover nominal damages only”

3. A Party Cannot Benefit From It’s Own Errors

In the case of Alghussein Establishment v Eaton College (1988) it was held

“It has been said that as a matter of construction unless the contract clearly

provides to the contrary it will be presumed that it was not the intention of the

parties that either should be entitled to rely on his own breach of duty to avoid

the contract or bring it to an end or to obtain a benefit under it.”

This approach can be relevant when each party is responsible for delay. For example

there may be overrun due to a delay by the contractor and late instructions which

occur in parallel. The court in the USA have adopted a simplistic approach in

allowing the contractor an extension of time but not recovery of additional cost.

Employers will therefore not be entitled to deduct liquidated and ascertained damages

but on the other hand will have no obligation offer financial reimbursement to the

contractor. In other words the loss will lie where it falls.

Keith Pickavance in his book Delay and Disruption in Construction Contracts at p 352

states:

“Lastly , and this is a legal conceptual problem the rules which apply to recovery of

actual damages for delay are not the same rules that apply to the relief of liquidated

damages for delay . If Cs progress on the critical path has been interfered with by

Ds act if of prevention then C must be given sufficient time to accommodate the

effect of that and be relieved for liquidated damages for a commensurate period”.

Theories Derived From Text Books and Legal Cases

1. Devlin Approach

Keating On Building Contracts 7th

Edition at page 246 draws attention to the Devlin

Approach where it states:

“If a breach of contract is one of two causes of a loss both causes co-operating and

both of approximately equal efficacy the breach is sufficient to carry judgment for

the loss”

This would apply where for example there were two competing causes of delay which

entitled a contractor to an extension of time, one a neutral event such as excessively

adverse weather and the other being a breach such as late issue of instruction by the

architect. Applying this approach the contractor would be entitled to an extension of

time and also the recovery of additional cost.

2. Decision in Malmaison

The decision in the case of Henry Boot Construction (UK) v Malmaison Hotel

(Manchester) Ltd (1999) produced a theory similar to the Devlin theory but more

advantageous to the contractor. Judge Dyson in this case said:

“...it was 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 delays caused by the relevant event nothwithstanding the

concurrent effect of the other event. Thus to take a simple example if no work is

possible on a site for a week not only because of exceptionally inclement weather (a

relevant event), but also because the contractor has a shortage of labour (not a

relevant event) and if the failure to work during that week is likely to delay the work

beyond the completion date by one week, then if he considers it fair and reasonable

to do so, the architect is required to grant an extension of time of one week. He

cannot refuse to do so on the grounds that the delay would have occurred in any

event by reason of the shortage of labour”

This theory goes one step beyond that which gives a contractor an entitlement to

additional time where he is causing delay at the same time as a delay caused by the

employer. Adopting the Malmaison approach the contractor is entitled to more time

when he is causing delay if the parallel delay is a neutral event such as exceptionally

inclement weather.

This and the Devlin approach have reached their conclusions on the basis of who has

taken the risk of delay under the terms of the contract. If the employer has taken the

risk of delay by a neutral event such as excessively inclement weather and delay due

to the late issue of information then under a JCT type contract the architect will be

expected to use his or her discretion by granting an extension of time where delay is

caused by an employer risk event.

3. First Past the Post

This approach adopts the logic that where delays are running in parallel the cause of

delay which occurs first in terms of time will be used for adjusting the contract period.

Other causes of delay will be ignored unless they affect the completion date and

continue on after the first cause has ceased to have any delaying affect. In this case

only the latter part of the second delay will be relevant to the calculation of an

extension of time. For example delays may run in parallel due to the late issue of

drawings and excessively inclement weather. If the late issue of drawings causes a

delay commencing on 1 February and inclement weather makes work impossible

from 14th February the late issue of drawings is the first past the post and will take

precedence over inclement weather until the drawings are issued. If drawings are

issued on 21st February but the inclement weather continues until 28

th February the

contract completion date will be adjusted in respect of weather for the latter period.

On the assumption that both delays are on the critical path an extension of time for 3

weeks due to late issue of drawing and 1 week for excessively inclement weather

should be awarded. The Australian Building Works Contract JCC-E 1994 published

by the Joint Contracts Committee under clause 10.11 Predominant Causes of Delay

applies the first past the post approach.The first past the post would seem an

appropriate method of resolving the issue of concurrent delays in the UK provided

there were no delays caused by the employer. It seems that where one of the

concurrent delays can be attributed to the employer the courts are determined to

ensure the contractor does not incur liquidated and ascertained damages.

4. The Dominant Cause

4.1 Where the dominant cause applies it will be a matter of choosing the

dominant or predominant delay where more than one delay is responsible for late

completion. Keating On Building Contracts 7th

Edition at p 246 defines dominant

cause in the following terms:

“If there are two causes, one the contractual responsibility of the Defendant and

the other the contractual responsibility of the Plaintiff the Plaintiff succeeds if he

establishes that the cause for which the Defendant is responsible is the effective

dominant cause. Which cause is dominant is a question of fact, which is not solved

by the mere point of order in time but is to be decided by applying common sense

standards”

4.2 Keating On Building Contracts 6th

Edition at p.212 states:

“The burden of proof should require the plaintiff to establish that the loss resulted

from the cause on which he relies and that he will do so if he establishes that it was

the dominant cause. He should not be required additionally to disprove lesser

alternative causes altogether”

4.3 The court approved of the dominant cause in the case of John Doyle Ltd v

Laing Management (Scotland) Ltd (2004) when it was said:

“The question of causation must be treated by the application of common sense to

the logical principles of causation…..In this context it is frequently possible to say

that an item of loss has been caused by a particular event notwithstanding that

other events for which the employer is responsible can be described as the dominant

cause of an item of loss, that will be sufficient to establish liability notwithstanding

the existence of other causes that are to some degree at least concurrent”

4.4 The question of a dominant cause was considered in the Scottish case of

Musselburugh and Fisherrow Cooperative Society v Mowlem (Scotland) Ltd

(2005) in which the court seemed to like the dominant cause approach but it could

not be applied as there was no conclusive evidence as to whether any of the three

competing causes of loss was the dominant one.

4.5 In contrast to the aforementioned cases the court in the case of H Fairweather and

Co Ltd v London Borough of Wandsworth (1987) were not impressed with the

dominant cause. This case resulted from a contract to construct 478 dwellings

employing a JCT 63 contract. Work was delayed by strikes, late instructions on

the part of the Architect and variations. The Architect granted 81 weeks extension

in respect of strikes. It was argued before the arbitrator by the contractor that 18 of

those weeks should have been allocated to late instructions and variations. The

arbitrator disagreed and accepted the Architects decision on the basis that the

delay caused by the strikes was the dominant one. On appeal the court overruled

the decision of the arbitrator in rejecting the dominant cause approach where it

was said:

“Dominant has a number of meanings: Ruling, prevailing, most influential.

On the assumption that condition 23 is not solely concerned with liquidated or

ascertained damages but also triggers and conditions a right for a contractor to

recover direct loss and expense where applicable under condition 24 then an

architect and in his turn an arbitrator has the task of allocating where the facts

require it the extension of time to the various heads. I do not consider that the

dominant test is correct”.

This leaves the situation of dominant cause somewhat open. It would seem however

that the rejection in the Wandsworth case did not seem to have influenced the

more recent John Doyle and Musselburgh decisions.

5. Apportionment

5.1 Traditionally where breach of contract cases come before the courts it is

usual for any loss to be attributable to a single cause. The tendency being to

take the view that on a strict interpretation of the contract the intention of the

parties was for the winner to take all. Some variance on this approach was

evident in the case of Tennant Radiant Heat Ltd v Warrington Development

Corporation (1987) which involved the collapse of a warehouse roof due to

an accumulation of rainwater because of blocked outlets. The landlord had a

liability for damage and the tenant the responsibility for repair either of

which could have caused the collapse .It was decided by the court that the

losses which resulted from the collapse should be apportioned between the

landlord and tenant. Lord Justice Dillon explained the rationale as follows:

“The problem which this court faces on the claim and counterclaim alike is in my

judgement a problem of causation of damages. On the claim the question is how

far the damage to its goods which the lessee has suffered was caused by the

corporation’s negligence notwithstanding the lessee’s own breach of covenant.

On the counterclaim the question is how far the damage to the corporation’s

building which the corporation has suffered was caused by the lessee’s breach

of covenant notwithstanding the corporation’s own negligence. The effect is

that on each question apportionment is permissible”

5.2 Keating On Building Contracts 6th

edition at p 213 provides support for

apportionment where it is stated:

“Where the loss or damage suffered by the plaintiff results partly from his own

conduct and partly from the defendant’s breach of contract it is correct in

principle for the damages to be apportioned”

5.3 Support for apportionment can also be found in the case of John Doyle

Ltd v Laing Management (Scotland) Ltd (2004) when it was stated:

“ …even if it cannot be said that events for which the employer is responsible are

the dominant cause of the loss it may be possible to apportion the loss between

the cause for which the employer is responsible and other causes. In such a case

it is obviously necessary that the event or events for which the employer is

responsible should be a material cause of the loss. Provided that condition is

met however we are of the opinion that apportionment of loss between the

different causes is possible in an appropriate case. Such a procedure may be

appropriate in the case where the causes of the loss are truly concurrent in the

sense that both operate together at the same time to produce a single

consequence”.

This suggests that for apportionment to apply both causes of loss must begin and end

at the same time which would be unusual.

5.4 The case of Musselburgh and Fisherrow Cooperative Society Ltd v

Mowlem (Scotland) Ltd (2005) is a case which involved three significant defects in a

swimming pool, two of which were statute barred. One of the expert witnesses

considered that apportionment would be the most appropriate method of arriving at a

just settlement and suggested a straight three-way split. The court warmed to the idea

of apportionment but considered this suggestion a little too rough and ready. In

arriving at a figure to be awarded the court considered that some of the remedial

works amounted to betterment in respect of which an appropriate reduction was made.

The court apportioned the cost of replacing gratings and channels and also the

waterproofing. A sum was also added for loss of revenue due to the closure, interest

and costs which totalled £104,274. Where does this leave us with regard to causes of

action whether relating to defects or delays which run in parallel? The court approved

of both the dominant cause and apportionment approach but offered no lasting

suggestions on matters of principle.

6. But For Test

A but for test has been developed and if successful could be useful to contractors. The

argument often runs that but for the architect’s instructions a delay would not have

occurred. In the Australian case of Quinn v Burch Brooks (Builders) Ltd (1966)

auditors failed to identify that a company was in a substantial loss position. It was

argued that but for the auditor’s errors the loss making company would have ceased

trading and subsequent trading losses would therefore have been avoided. In the UK

case of Turner Page Music Ltd v Torres Design Associates Ltd (1997) an action was

brought against an architect for negligence when there was a severe financial overrun

on a construction project. The employer subsequently sold the building and alleged

that but for the architect’s negligence the sale would not have been necessary.

The courts in both cases rejected the but for argument.

Society of Construction Law Delay and Disruption Protocol

The Protocol does not produce anything new but lends support to some of the

methods already described above. It commences with an interpretation given in clause

1.4.4 of what is meant by concurrent delays. True concurrency is explained as

occurring when two or more delays begin and end at the same time but considered as

being a rare occurrence. Where this occurs the Protocol considers that the contractor

will be entitled to an extension of time if one of the delaying events is an employer

delay. This would apply even if one of the other delaying events was a contractor

delay. This is in line with a party not being entitled to benefit from its own errors.

The Protocol states that the term concurrent delay is often used to describe the

situation where two or more delay events arise at different times but the effects of

them are felt either in whole or in part at the same time. To avoid confusion the

Protocol explains this situation is more correctly termed the concurrent effect of

sequential delay events. Delays by the employer are not dealt with in any different

manner where the delays have concurrent effect, the contractor will be entitled to an

extension of time.

If and employer delay is truly concurrent with another cause of delay or merely has a

concurrent effect it will be a matter of analysis to establish whether the contractor is

entitled to any financial compensation.

Summary

It can be readily seen that there are numerous different approaches to deciding how to

deal with delays which run concurrently. There seems to be only one consistent rule

which applies and that is in the event of a delay being caused by the employer no

deduction of liquidated damages is allowable irrespective of what other cause is

contributing to the overall delay.

In the final analysis the outcome will no doubt depend upon the circumstances and the

wording in the contract.

Standard Questions

1. Which of the following causes of delay usually entitle the contractor to more

time and financial reimbursement

(A) Employer’s delays

(B) Delays caused by neutral events

(C) Delays caused by subcontractors

2. Which of the following are recognised as sources of knowledge relating to

concurrent delays

(A) Standard forms of contract

(B) Legal principle explained in text books

(C) Case law

3. Which of the following if causing delay can be attributable to the prevention

principle

(A) Interference by the employer

(B) Restricted access to the site caused by the Highway Authority

4. Which of the following legal cases support the dominant cause approach

(A) Fairweather v London Borough of Wandsworth (1987)

(B) John Doyle Ltd v Laing Management (2004)

(C) Musselborough and Fisherrow Cooperative Society Ltd v Mowlem

(Scotland) Ltd (2005)

5. Which of the following approaches to concurrent delays are unlikely to be

adopted by the UK courts

(A) But For Theory

(B) Apportionment

(C) First Part the Post

6. In which of the following legal cases was it held that where concurrent delays

occur due to a neutral event such as excessively inclement weather for which

the contractor is entitled to an extension of time together with a contractors

own delay an extension of time should be granted

(A) Henry Boot (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999)

(B) Quinn v Burch Brooks Builders Ltd (1996)

(C) Turner Page Music Ltd v Torres Design Associates Ltd (1997)

7. Which of the following are described in the Society of Construction Law

Delay and Disruption Protocol as delay having concurrent effect in contrast to

concurrent delays

(A) Delays which have the same start and finish date

(B) Delays which arise at different times but whose effects are felt at the

same time.

Model Answers

1. (A)

2. (B) and (C)

3. (A)

4. (B) and (C)

5. (B) and (C)

6. (A)

7. (B)