concurrent delay

The Global Leader in Managing Construction Risk ™

Concurrent Delay – A Contractor’s Entitlement to an Extension of Time

Keith TregunnaDirector, Knowles, Winchester

[email protected] 147586

November 2012

mailto:[email protected]


CORPORATE OVERVIEW

• Hill International (NYSE:HIL) is a publicly traded construction consulting firm providing project management, construction management and construction claims services to public and private clients in every major construction market sector around the world.

• Knowles is a wholly owned subsidiary of Hill International. Together, our combined resources of over 3,300 professionals in 110 offices across 5 continents form the world’s largest construction claims consultancy.

• As a global leader in construction disputes, with a portfolio of some of the world’s largest and most prestigious projects in every major construction market sector; we continue our commitment to excellence, providing an unrivalled range of resources, experience and services, including construction claims, construction management and project management services.


About the Speaker

Keith Tregunna, a Director of Knowles, has worked in the construction industry for some 40 years. He has been employed in the UK and overseas in preparing, defending and negotiating claims including delay analysis and the provision of expert reports on a wide range of small and large, engineering and building projects.

The Global Leader in Managing Construction Risk ™4

Extension of Time – Why?

• Why have contracts got E.O.T. clauses?• Contracts fix Completion Date• Contractor fails to complete = Breach=Damages• Replace Damages with LADs – Employer does not need to prove

loss• Employer delays completion

– Extra work– Late instructions – Restricted access

• Contractor needs protection from LADs• Employer needs to protect right to deduct LADs


The Problem

• During the same period of the contract:

• An Employer culpable event occurs causing delay which would entitle the Contractor to an Extension of Time

• A Contractor culpable or other event for which the Employer is not culpable occurs causing delay which would not entitle the Contractor to an Extension of Time

• Is the Contractor entitled to an Extension of Time?


The Problem Illustrated

ID Task Name Duration Start Finish0 The Problem 46 days 22/09/09 24/11/091 Excavation 5 days 22/09/09 28/09/092 Piling 5 days 29/09/09 05/10/093 Concrete Foundations 5 days 06/10/09 12/10/094 Walls 5 days 13/10/09 19/10/095 Windows 5 days 20/10/09 26/10/096 Roof 5 days 20/10/09 26/10/097 Weathertight 0 days 27/10/09 27/10/098 M&E First Fix 5 days 28/10/09 03/11/099 Finishes 5 days 04/11/09 10/11/0910 M&E 2nd Fix 5 days 11/11/09 17/11/0911 Final Clean 5 days 18/11/09 24/11/0912 PC & Handover 0 days 24/11/09 24/11/09

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21 Sep 28 Sep 05 Oct 12 Oct 19 Oct 26 Oct 02 Nov 09 Nov 16 Nov 23 Nov 30 Nov


The Problem Illustrated

ID Task Name Duration Start Finish0 The Problem 46 days 22/09/09 24/11/091 Excavation 5 days 22/09/09 28/09/092 Piling 5 days 29/09/09 05/10/093 Concrete Foundations 5 days 06/10/09 12/10/094 Walls 5 days 13/10/09 19/10/095 Windows 5 days 20/10/09 26/10/096 Windows Delay Contractor 1 day 27/10/09 27/10/097 Roof 5 days 20/10/09 26/10/098 Roof Delay Employer 1 day 27/10/09 27/10/099 Weathertight 0 days 27/10/09 27/10/0910 M&E First Fix 5 days 28/10/09 03/11/0911 Finishes 5 days 04/11/09 10/11/0912 M&E 2nd Fix 5 days 11/11/09 17/11/0913 Final Clean 5 days 18/11/09 24/11/0914 PC & Handover 0 days 24/11/09 24/11/09

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8

The Answer

Keating on Building Contracts 7th Edition:

“…the claimant 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”


The Answer


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Keating on Building Contracts 7th Edition

If Roof Delay is “Dominant” Contractor receives Extension of Time


Must be a cause need not be the causeHenry Boot Construction Ltd v Malmaison Hotel

(Manchester) Ltd (1999)

“…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.”

The Answer


The Answer

ID Task Name Duration Start Finish0 The Problem with Delays 46 days 22/09/09 24/11/091 Excavation 5 days 22/09/09 28/09/092 Piling 5 days 29/09/09 05/10/093 Concrete Foundations 5 days 06/10/09 12/10/094 Walls 5 days 13/10/09 19/10/095 Windows 5 days 20/10/09 26/10/096 Windows Delay Contractor 1 day 27/10/09 27/10/097 Roof 5 days 20/10/09 26/10/098 Roof Delay Employer 1 day 27/10/09 27/10/099 Weathertight 0 days 27/10/09 27/10/0910 M&E First Fix 5 days 28/10/09 03/11/0911 Finishes 5 days 04/11/09 10/11/0912 M&E 2nd Fix 5 days 11/11/09 17/11/0913 Final Clean 5 days 18/11/09 24/11/0914 PC & Handover 0 days 24/11/09 24/11/09

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Henry Boot Construction Ltd v Malmaison Hotel (Manchester) Ltd (1999)

Contractor Delay is dominant but Contractor still receives an Extension of Time


Which came first?Royal Brompton Hospital NHS Trust v Hammond (2000)“…it is I think necessary to be clear what one means by events

operating concurrently, it does not mean, in my judgement, a situation in which, work already being delayed, let it be supposed, because the contractor has had difficulty in obtaining sufficient labour, an event occurs which is a relevant event and which, had the contractor not been delayed would have caused him to be delayed, but which in fact, by reason of the existing delay made no difference. In such a situation although there is a relevant event, “the completion of the works is [not] likely to be delayed thereby beyond the Completion Date”. The relevant event simply has no effect upon the completion date.”

The Answer


Royal Brompton Hospital NHS Trust v Hammond (2000)The Answer

ID Task Name Duration Start Finish0 The Problem Contractor Delay 46 days 22/09/09 24/11/091 Excavation 5 days 22/09/09 28/09/092 Piling 5 days 29/09/09 05/10/093 Concrete Foundations 5 days 06/10/09 12/10/094 Walls 5 days 13/10/09 19/10/095 Windows 5 days 21/10/09 27/10/096 Windows Delay Contractor 1 day 20/10/09 20/10/097 Roof 5 days 20/10/09 26/10/098 Weathertight 0 days 27/10/09 27/10/099 M&E First Fix 5 days 28/10/09 03/11/0910 Finishes 5 days 04/11/09 10/11/0911 M&E 2nd Fix 5 days 11/11/09 17/11/0912 Final Clean 5 days 18/11/09 24/11/0913 PC & Handover 0 days 24/11/09 24/11/09

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Contractor Delay causes delay to Completion Date



Employer Delay causes no further delay to Completion Date therefore no Extension of Time

ID Task Name Duration Start Finish0 The Problem Employer Delay 46 days? 22/09/09 24/11/091 Excavation 5 days 22/09/09 28/09/092 Piling 5 days 29/09/09 05/10/093 Concrete Foundations 5 days 06/10/09 12/10/094 Walls 5 days 13/10/09 19/10/095 Windows 5 days 21/10/09 27/10/096 Windows Delay Contractor 1 day 20/10/09 20/10/097 Roof 5 days 20/10/09 26/10/098 Roof Delay Employer 1 day? 27/10/09 27/10/099 Weathertight 0 days 27/10/09 27/10/0910 M&E First Fix 5 days 28/10/09 03/11/0911 Finishes 5 days 04/11/09 10/11/0912 M&E 2nd Fix 5 days 11/11/09 17/11/0913 Final Clean 5 days 18/11/09 24/11/0914 PC & Handover 0 days 24/11/09 24/11/09

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Royal Brompton Hospital NHS Trust v Hammond (2000)

“This situation obviously needs to be distinguished from a situation in which, as it were, the works are proceeding in a regular fashion and on programme, when two things happen, either of which, had it happened on its own, would have caused delay, and one is a relevant event, while the other is not. In such circumstances there is real concurrency of causes of the delay.”

The Answer



Real concurrency of Employer delay with Contractor delay – Contractor receives Extension of Time


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ApportionmentCity Inn Ltd v Shepherd Construction Ltd [2010]“….the architect or in litigation the court, must apply judgement to

determine the extent to which completion has been delayed by relevant events. In an appropriate case apportionment of the delay between relevant events and contractor risk events may be appropriate …. Apportionment enables the architect to reach a fair assessment of the extent to which completion has been delayed by relevant events .…. That leads on to the question of how the exercise of apportionment is carried out. That exercise is broadly similar to the apportionment of liability on account of contributory negligence or contribution among joint wrongdoers…..”

The Answer


City Inn Ltd v Shepherd Construction Ltd [2010]

The Answer

ID Task Name Duration Start Finish0 The Problem 46 days 22/09/09 24/11/091 Excavation 5 days 22/09/09 28/09/092 Piling 5 days 29/09/09 05/10/093 Concrete Foundations 5 days 06/10/09 12/10/094 Walls 5 days 13/10/09 19/10/095 Windows 5 days 20/10/09 26/10/096 Roof 5 days 20/10/09 26/10/097 Weathertight 0 days 27/10/09 27/10/098 M&E First Fix 5 days 28/10/09 03/11/099 Finishes 5 days 04/11/09 10/11/0910 M&E 2nd Fix 5 days 11/11/09 17/11/0911 Final Clean 5 days 18/11/09 24/11/0912 PC & Handover 0 days 24/11/09 24/11/09

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City Inn Ltd v Shepherd Construction Ltd [2010]The Answer

Neither delay is dominant therefore Extension of Time is determined by apportionment between the competing causes of delay

ID Task Name Duration Start Finish0 The Problem Apportionment 55 days 22/09/09 07/12/091 Excavation 5 days 22/09/09 28/09/092 Piling 5 days 29/09/09 05/10/093 Concrete Foundations 5 days 06/10/09 12/10/094 Walls 5 days 13/10/09 19/10/095 Windows 5 days 20/10/09 26/10/096 Windows Employer Delay 10 days 27/10/09 09/11/097 Roof 5 days 20/10/09 26/10/098 Roof Contractor Delay 5 days 27/10/09 02/11/099 Weathertight 0 days 09/11/09 09/11/0910 M&E First Fix 5 days 10/11/09 16/11/0911 Finishes 5 days 17/11/09 23/11/0912 M&E 2nd Fix 5 days 24/11/09 30/11/0913 Final Clean 5 days 01/12/09 07/12/0914 PC & Handover 0 days 07/12/09 07/12/0915 Extension of Time 8 days 24/11/09 03/12/0916 Contractual Completion Date 0 days 03/12/09 03/12/09

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City Inn Ltd v Shepherd Construction Ltd [2010]Keith Pickavance - Const. L. J. 637“Although there is nothing in the decision of the Outer House to show that the judge was aware of it, the Courts difficulty was not brought about by the absence of factual evidence, conflicting expert evidence, different delay analysis techniques, or having to unravel what in retrospect appeared to be the effects of concurrent events. The difficulty was self inflicted and brought about by the Court’s attempt to deal with delay in the same way as it customarily deals with loss and expense. It was the failure to recognise the impossibility of dealing with time, as though it were money, which caused the Outer House to reach an irrational decision.”

NOT The Answer ????


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Keating on Building Contracts 9th Edition:

“…it is now generally accepted that under the Standard Form of Building Contract and similar contracts a contractor is entitled to an extension of time where delay is caused by matters falling within the clause notwithstanding the matter relied upon by the contractor is not the dominant cause of delay, provided only that it has at least equal “causative potency” with all other matters causing delay.”

Approved in Steria Ltd v Sigma Wireless Communications Ltd – [2008]

The Answer - Or Is It ????



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If Roof Delay is of equal potency to the Window Delay the Contractor receives Extension of Time




If Window Delay is of equal potency to the Roof Delay the Contractor receives Extension of Time of 10days. If not then 5days.

ID Task Name Duration Start Finish0 The Problem Equal 55 days 22/09/09 07/12/091 Excavation 5 days 22/09/09 28/09/092 Piling 5 days 29/09/09 05/10/093 Concrete Foundations 5 days 06/10/09 12/10/094 Walls 5 days 13/10/09 19/10/095 Windows 5 days 20/10/09 26/10/096 Windows Employer Delay 10 days 27/10/09 09/11/097 Roof 5 days 20/10/09 26/10/098 Roof Contractor Delay 5 days 27/10/09 02/11/099 Weathertight 0 days 09/11/09 09/11/0910 M&E First Fix 5 days 10/11/09 16/11/0911 Finishes 5 days 17/11/09 23/11/0912 M&E 2nd Fix 5 days 24/11/09 30/11/0913 Final Clean 5 days 01/12/09 07/12/0914 PC & Handover 0 days 07/12/09 07/12/0915 Extension of Time 10 days 24/11/09 07/12/0916 Contractual Completion Date 0 days 07/12/09 07/12/09

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Walter Lilly & Co Ltd v Giles Mackay [2012]

“364 - In Balfour Beatty Building Ltd v Chestermount Properties Ltd (2003) 62 BLR 1, Mr Justice Colman had to address several issues ….. The argument was run that, if towards the end of a period of culpable delay a variation order is issued which delays completion, the Contractor was entitled not simply to an extension for the period of delay actually caused by the variation but (by reason of its timing) to a full extension up until the time that the variation was executed. The learned judge said that the "net" method was correct. …. “Fundamental to this exercise is an assessment of whether the relevant event occurring during a period of culpable delay has caused delay to the completion of the Works and, if so, how much delay.“”

The Summary


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366 – “……The two schools of thought, …. are the English approach that the Contractor is entitled to a full extension of time for the delay caused by the two or more events (provided that one of them is a Relevant Event) and the Scottish approach which is that the Contractor only gets a reasonably apportioned part of the concurrently caused delay. …. Inner House case of City Inn Ltd v Shepherd Construction Ltd [2010] BLR 473.

The Summary


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367 – “In Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999) 70 Con LR 32, Mr Justice Dyson ………..It could thus be said that the learned judge was simply repeating the common ground between the parties rather than reach a considered decision on the issue. That said, the judge seems to have "run with the ball" in his second and third sentences and appears to have endorsed that common ground.”

The Summary


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368 – “Mr Justice Edwards Stuart said in De Beers v Atos Origin IT Services UK Ltd [2011] BLR 274:“177. The general rule in construction and engineering cases is that where there is concurrent delay to completion caused by matters for which both employer and contractor are responsible, the contractor is entitled to an extension of time …………………..””

The Summary


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369 – “In a shipbuilding contract dispute in Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 Comm, Mr Justice Hamblen quoted as good law what Mr Justice Dyson said at Paragraph 13 in the Henry Boot case (above):“277. It is to be noted that this example involves a relevant event which caused a period of actual delay to the progress of the works – no work could be done for a week due to the weather. If that is established then the contractor is entitled to his extension of time even if there is another concurrent cause of that same delay. ………………..””

The Summary


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370 – “In any event, I am clearly of the view that, where there is an extension of time clause such as that agreed upon in this case and where delay is caused by two or more effective causes, one of which entitles the Contractor to an extension of time as being a Relevant Event, the Contractor is entitled to a full extension of time. ….. The fact that the Architect has to award a "fair and reasonable" extension does not imply that there should be some apportionment in the case of concurrent delays. The test is primarily a causation one. It therefore follows that, although of persuasive weight, the City Inn case is inapplicable within this jurisdiction.”

The Summary


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378 – “….. had regard to the likely longest sequence of the outstanding work on a monthly basis as being the primary pointer to what was delaying the work at any one time. This was a wholly logical approach and, indeed is the approach used by most delay experts when there is a usable baseline programme from which to work.

………..it is necessary to have regard to how long individual items actually took to perform and not just have regard to what one party or the other at the time was saying it would take.”

The Summary


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459 – “In my judgement, WLC is and was entitled to an extension of time through to the date of Practical Completion, 7 July 2008. The issues of concurrent and co-effective delays do not arise because none of the actual causes of delay after that date were the fault, risk or responsibility of WLC. The only occasions when there were concurrent causes of delay arose where such causes were all the contractual risk of DMW. Most of the actual or alleged major causes of delay …….. were positively not the contractual responsibility of WLC. Whilst some of the plasterwork and the Lift complaints raised in 2007 were the responsibility of WLC, they had no impact on the overall delay.”

The Summary


Royal Brompton Hospital NHS Trust v Hammond (2000)Possible Answers

Employer Delay causes no further delay to Completion Date therefore no Extension of Time

ID Task Name Duration Start Finish0 The Problem Employer Delay 46 days? 22/09/09 24/11/091 Excavation 5 days 22/09/09 28/09/092 Piling 5 days 29/09/09 05/10/093 Concrete Foundations 5 days 06/10/09 12/10/094 Walls 5 days 13/10/09 19/10/095 Windows 5 days 21/10/09 27/10/096 Windows Delay Contractor 1 day 20/10/09 20/10/097 Roof 5 days 20/10/09 26/10/098 Roof Delay Employer 1 day? 27/10/09 27/10/099 Weathertight 0 days 27/10/09 27/10/0910 M&E First Fix 5 days 28/10/09 03/11/0911 Finishes 5 days 04/11/09 10/11/0912 M&E 2nd Fix 5 days 11/11/09 17/11/0913 Final Clean 5 days 18/11/09 24/11/0914 PC & Handover 0 days 24/11/09 24/11/09

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If Window Delay is of equal potency to the Roof Delay the Contractor receives Extension of Time of 10days. If not then 5days.


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Possible Answers


The Contractor receives Extension of Time of 10days.


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Possible AnswersWalter Lilly & Co Ltd v Giles Mackay [2012]


SIMPLES!

concurrent delay

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