Delays and Disruption

Dr. Larry Wilkinson ( Module Leader_ UK)

Dr. Praneeth Wickramarachchi (Lecturer_ SL)

Delays and Acceleration

The objectives of this lecture are

 To differentiate between delay and disruption

 How they can arise
 To understand what considerations are necessary when
delays are experienced
 To discuss , in some detail, the term Concurrent Delay and
how it arises.
 Delays and disruption

 Delays are inevitable on the majority of projects

 Can be reduced by a properly considered programme

 The programme should be updated to record actual progress

and any extensions of time

 If these are followed then the programme is a good tool for

managing change and delay
Delays and Disruption

Delays( in the contractual context)

 Generally some item or event that leads to a delay in the

start ,regular progress of the works or completion of the
project

 Delays in the start or regular progress do not necessarily

mean completion will be delayed

 Students – why might that be the case?

Delays and Disruption

Students

 If there has been delay to the works but the completion is not
affected can

 a contractor claim an extension of time

 a client claim L&A damages

Delays and Disruption

Disruption

 “Disruption is a disturbance,hinderance or interruption of a

Contractors normal working methods, resulting in lower
efficiency.

 If caused by the Client, it may give rise to the right of

compensation either under the contract or as a breach of
contract”
Delays and Disruption

Disruption

 Generally affects a contractors intended labour or plant output

 It is distinctly different from delay in that a contract may be

disrupted but the completion date not affected.
Delays and Disruption

Examples of Delay

Client Responsibility
 Late possession of the site (students examples of how that
might occur))
 Access to the site
 Variations to the contract
 Late receipt of information from his design team
 Failure to pay on time – determination.
 Discrepancies in contract documents
Delays and Disruption

Examples of delay

Contractors responsibility
 Incorrect programme and methodology
 Weak site management
 Delays by the supply chain
 Unforeseen site conditions
 Poor health and safety
 Poor quality of workmanship
 Sometimes the weather
Delays and Disruption

Examples of disruption

 Out of sequence working caused by a change in design

 Late information requiring trades to move on to something
else or leave site
 Large volume of variations that require additional resources or
resources working on top of each other.
 Generally leads to a loss of efficiency
Extension of time

 If the client has delayed the contractor from completing the

works by the completion date then the contractor is usually
entitled to an extension of time, dependant on the form of
contract agreed

 If the contractor prevents the completion of the works by the

agreed completion date then the contractor will be liable to
pay Liquidated and Ascertained Damages to the Client.
Liquidated and ascertained damages (LAD’s)

 Predetermined calculation of loss on the part of the client if

the contractor does not complete on the agreed completion
date.

 Usually expressed as a cost per week.

 Client does not have to prove his actual losses.

 Contractors liability is limited to the agreed damages.

Extension of time

 Most contracts will have a clause allowing the client to award

an extension of time to the contractor for the reason of the
occurrence of a relevant event(JCT2011) or compensation
event(NEC3)

 Important to the contractor because it protects him from the

client levying liquidated damages.

 If the contractor does not have an extension of time then the

client may levy L&A damages ( providing the contact
administrator has issued a Certificate of Non Completion)
Extension of time

 The extension of time award may allow the contractor to

claim for financial Loss and Expense (depending on the
relevant or compensation event).

 Grounds for an extension of time may vary on different types

of contract.

 These grounds can be removed if both parties agree and the

contractor , usually, is prepared to take on the risk.

 A common one is removing the normal entitlement due to

exceptionally inclement weather
Extension of time

 The contractor is normally expected to give notice of a delay

and request an EOT, providing that the delay is likely to
extend the completion date.

 The contractor should also notify if he intends to claim loss

and expense.

 The contract administrator should award an EOT , if he

believes one is due swiftly, so that a revised completion date
can be agreed.

 Not easy as it could be over or under awarded

Examples of relevant or compensation events that
attract loss and expense

 Late possession of the site

 Access to the site

 Variations to the contract

 Late receipt of information

 Discrepancies in contract documents

 Instruction to delay the works

 Delays by the clients artists and tradesmen

 Unforeseen works
Examples of relevant or compensation events that do
not attract loss and expense

 Exceptionally adverse weather.

 Strikes, civil commotion.

 Shortage of labour or material.

 Delay on the part of utility companies.

 Force majeure.

 Damage to the works

Concurrent delay

 We are considering a simple contract to build an office block

 The duration is 12 months from January 2013 to December
2013
 The form of contract is JCT 2005 ( with quants).
 Contract overruns by exactly 1 month to end of January 2014.
 Two causes of delay
1. Carrying out of remedial work to rectify the contractors poor
workmanship.
2. Variations ordered by the architect.

 Lets assume that they are of equal potency.

Concurrent delay

 The considerations are;

1. Should the contractor be granted a months extension of time?

2. Is the contractor entitled to recover a months worth of

prolongation costs?

3. Is the employer entitled to recover a months worth of

liquidated damages?

 JCT 2005 does provide for all of these if appropriate.

Concurrent delay – what is it?

 “The expression concurrent delay is used to denote a period

of project overrun which is caused by two or more effective
causes of delay which are of approximately equal causative
potency”

Marrin QC, Society of Construction Law, February 2013

 “ Two or more delay events occurring within the same time

period each independently affecting the Completion Date”

Judge Seymour – Royal Brompton Hospital NHS Trust v

Frederick Hammond & Ors.
Concurrent delay

 There is no real legal definition.

 Not addressed specifically in the main forms of contract (JCT,

NEC)

 Extremely complex part of dispute resolution

 Most simply put when two events happen at the same time,
one the responsibility of the contractor and the other the
responsibility of the client.
Concurrent delay – why is it important?

 No one wants to accept responsibility for the late delivery of a

contract

 Client – will have to pay the contractors loss and expense as

well as receiving the project late. That may mean he has to
also compensate another party ( incoming tenant).

 Contractor – will may be open to L&A damages as well as his

own prolongation costs.
 Concurrent delay
 Different ways of determining the extension of time which
have different degrees of success in the courts

 Apportionment
 The “ but for “ test
 Dominant cause
 Malmaison v Henry Boot known simply as Malmaison
 Concurrent delay

 Apportionment

 If there are two causes of equal potency it may be possible to

“apportion” the delay relatively.
 Seems a sensible approach
 Not one favoured by the courts
 They often require the “ all or nothing “ approach.
 Concurrent delay

 Apportionment -difficulties

 How to agree on what is a fair and reasonable apportionment

 Difficulties can arise in the split between time and cost
 Might get thrown out by the courts if one party decided to
take the litigation route.
 Was agreed in City Inns v Shepherd Construction Ltd (2007)
 Concurrent delay

 The “ but for approach”

 Generally a favourite of contractors

 Used when a clients administrator instructs extra works (
variations)
 Contractor argues that he would have finished on time “ but
for” the variations
 Usually arises where the contractor has taken longer to
complete and does not acknowledge any delay on his part
 Concurrent delay

 The “ but for approach”- difficulties

 Not liked by the courts

 Not normally used unless expressly included in a contract.

 Concurrent delay

 The Dominant Cause approach

 Could be used if there are two causes of delay and one could
be analysed as the dominant or predominant cause for delay.

 Was used as the most popular method of dealing with delays

in the 80’s and early 90’s.

 Relies on fact finding proving that there is only one major or

dominant cause for delay

 Was used in H . Fairweather & Co V LB of Wandsworth (1987)

 Concurrent delay

 The Dominant Cause approach -difficulties

 There may be two delays with equal potency.

 Becomes difficult or impossible to determine which is the

dominant one.

 This is not an approach that is currently favoured by the

courts.
 Concurrent delay

 Malmaison approach

 Came from a high court decision in case of Henry Boot

Construction v Malmaison Hotel (Manchester) Ltd 1999.

 Basis of findings were “ 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 the concurrent effect of
the other event”
 Concurrent delay
 You are the contractor for construction works at an arts centre in Manchester. The contract involves the
refurbishment of an ancient listed building together with a state of the art extension which is to be a new
art gallery.
 The refurbishment is complicated involving a lot of structural alteration, new lifts and lift shafts as well as
the repair and refurbishment to the internal and external aspects of the building.
 The contract has been procured on a traditional JCT contract with design being retained by the client.
 The project is half way through the contract period but already 12 weeks behind programme.
 There have been a number of client variations that have caused delay which you estimate at being 12
weeks. However you have had procurement issues with the lift as well as a contractual problem with your
Groundworkers which together have caused a delay of approximately 12 weeks.


 Define the term delay, giving examples of the types of delay that may be experienced on a typical
construction project and who, from the key stakeholders, may be responsible for them.
 (10 marks)


 You have asked for an extension of time of 12 weeks citing the relevant event as delay caused by the
variations to the contract and have notified the client of your intent to claim for loss and expense.
 The client has responded by saying that, whilst he maybe responsible contractually for the delays
associated with the variations, your own delays have run concurrent with the variation delay and as a
result he will not be granting an extension of time.


 Define the term concurrent delay and critically review your situation and the options available to you.


 look at exam question for SL

(15 marks)
