Significant time and print are devoted to the discussion of concurrent delay. But what is it? How is it dealt with by different contracts and the courts? How often is it encountered? And can parties agree to amend the balance of risk when concurrent delay is demonstrated to exist?

What is concurrent delay?

In 1999, in his judgment from Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999) 70 Con LR 32 (TCC), Dyson J set out an agreement between the parties in dispute 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.”

HHJ Seymour QC suggested an alternative, narrower, definition in 2000 in the case of Royal Brompton Hospital NHS Trust v Hammond (No 7) (2000) 76 Con LR 148:

“It is, I think, necessary to be clear what one means by events operating concurrently. It does not mean, in my judgment, 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 on the completion date. 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 a real concurrency of causes of delay.”

J Marrin QC suggested in 2002 that “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.” [1] In his subsequent paper, ‘Concurrent Delay Revisited’, published in 2013, J Marrin QC noted that it had been pointed out that true concurrency would only arise in exceptional factual situations.[2]

The second edition of the Society of Construction Law (SCL) Delay and Disruption Protocol, published in February 2017, suggests that one such situation might be at the project commencement date, “where, for example, the employer fails to give access to the site, but the contractor has no resources mobilised to carry out any work,” but notes that it can arise at any time.[3] The SCL protocol also provides guidance on the more typical situation, as follows:

“In contrast, a more common usage of the term ‘concurrent delay’ concerns the situation where two or more delay events arise at different times, but the effects of them are felt at the same time.”[4]

An example of where concurrent effects of delays are experienced is also provided.[5] Hence, ‘concurrent delay’ is more likely to arise. The term is more typically applied in situations where different causes, at least one being an employer and the other a contractor risk event, arise at different times (whether or not they might have occurred concurrently, in whole or in part) but the effects of those events are felt on the project at the same time, and both events are effective causes of delay; i.e. they fall on the actual critical path at the relevant time.

Alternative approaches to concurrent delay

In the UK, it appears to be generally accepted that where the concurrent effect of valid delay events is demonstrated to exist, the contractor will be entitled to an extension of time. This arises as the result of the critical delay to completion caused by the employer risk event, even if such event is not the dominant but only an effective cause of delay with at least equal ‘causative potency’ with all other events causing critical delay.[6]

In such circumstances, the employer will not be entitled to recover liquidated damages from the contractor by reason of its entitlement to an extension of time. Similarly, the contractor will not, normally, be entitled to claim prolongation costs. This is commonly referred to by the phrase ‘costs lie where they fall’ and is known as the Malmaison approach.[7]

The rationale for this approach has been described as being that where the parties have provided in the contract for an extension of time in the event that certain events occur:

“…the parties must be taken to have contemplated that there could be more than one effective cause of delay (one of which would not qualify for an extension of time) but nevertheless by their express words agreed that in such circumstances the contractor is entitled to an extension of time for an effective cause of delay falling within the relevant contractual provision.”[8]

This principle was endorsed in Steria Ltd v Sigma Wireless Communications Ltd (2008) BLR 79, De Beers UK Ltd v Atos Origin IT Services UK Ltd (2010) EWHC 3276 (TCC), and Walter Lilly & Co Ltd v Mackay (2012) EWHC 1773 (TCC).

In Walter Lilly, Akenhead J said: “the English approach [is] 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 provided the following rationale:

“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. Part of the logic of this is that many of the relevant events would otherwise amount to acts of prevention and that it would be wrong in principle to construe clause 25 [of the JCT Standard Form Building Contract, 1998 edition, Private Without Quantities] on the basis that the contractor should be denied a full extension of time in those circumstances. More importantly however, there is a straight contractual interpretation of clause 25 which points very strongly in favour of the view that, provided the relevant events can be shown to have delayed the works, the contractor is entitled to an extension of time for the whole period of delay caused by the relevant events in question.”

By contrast, in the Scottish case of City Inn Ltd v Shepherd Construction Ltd (2008) BLR 269, (2010) BLR 473, Lord Drummond-Young was required to consider the assessment of an extension of time,[9] where concurrent delay events were identified to exist, some of which were relevant events and some were not. As a consequence, he proposed a means of quantifying matters that may be considered when assessing an extension of time. In his judgment, he stated:

“Where there is true concurrency between a relevant event and a contractor default, in the sense that both existed simultaneously, regardless of which started first, it may be appropriate to apportion responsibility for the delay between the two causes; obviously, however, the basis for such apportionment must be fair and reasonable.”

It is noted that the reference here to ‘true concurrency’ is different to that identified by J Marrin QC, which referred to the situation where both the relevant event and contractor event start and finish at the same times.

Keating comments that the court held that “where there are concurrent causes of delay, none of which can be described as dominant, the delay should be apportioned as between the relevant events and the contractor’s risk events.” The justification being that the terms of the contract required the architect “to fix such new completion date as it considers to be ‘fair and reasonable’ in the circumstances.”[10] Whilst the Inner House of the Court of Session confirmed the decision by a majority, Keating suggests “that in approaching the matter in this way, the Scottish Court of Session placed too great a weight on the words ‘fair and reasonable’ and it has been held that it probably does not reflect English law.”[11]

It seems that other countries variously follow either the Malmaison or the apportionment approach.[12]

How prevalent is concurrent delay?

In some jurisdictions, particularly in the Middle East in my experience, some contractors are keen to identify incidents of concurrent delay as a potential means to offset their liability to pay liquidated damages due to critical delays arising from their own default.

As noted previously, however, true concurrent delay is likely to occur only in extremely rare situations. In my experience, concurrent delay at any time is a rare event. This is generally because, with sufficient contemporaneous records and a detailed analysis of the critical path and potentially critical delay events, it is frequently possible to identify that critical delay was caused by a particular event that became critical prior to, and therefore generated float in, an alternative but alleged concurrent critical delay caused by another event.

In such circumstances and as recommended by the SCL protocol,[13] where it is established, let us assume that a contractor risk event caused an ongoing critical delay to a project on a particular date and some days later an employer risk event occurred which would have caused critical delay but for the continuing critical effect of the contractor risk event, then the employer risk event should not be considered to have caused delay to completion and, therefore, no concurrent delay may be said to exist.

This approach reflects the narrower interpretation provided by the court in Royal Brompton,[14] which was endorsed recently in Saga Cruises BDG Limited and Anor v Fincantieri Spa (2016) EWHC 1875 (Comm) where the court rejected the Malmaison and Walter Lilly approaches relied upon by Saga and state “unless there is concurrency actually affecting the completion date as then scheduled the contractor cannot claim the benefit of it. Causation in fact must be proved based on the situation at the time as regards delay. The Yard’s approach is over broad.”

Treatment in standard forms of contract and bespoke conditions

Neither the New Engineering Contract (NEC) third or fourth edition standard forms make any specific reference to concurrent delay. Consequently, it is likely that incidents of concurrent delay would be treated in the manner suggested previously.

The International Federation of Consulting Engineers (FIDIC) standard forms, particularly the Red Book (construction projects) and Silver Book (EPC/turnkey projects), provide at clause 8.5 of the general conditions as follows:

“If a delay caused by a matter which is the employer’s responsibility is concurrent with a delay caused by
a matter which is the contractor’s responsibility, the contractor’s entitlement to EOT [extension of time] shall be assessed in accordance with the rules and procedures stated in the special provisions (if not stated, as appropriate taking due regard of all relevant circumstances).”

The special provisions may then be drafted in a way that specifies how incidents of concurrent delay should be treated. Alternatively, if no specific rules or procedures are identified, then it is suggested that concurrent delay would be treated in the manner suggested previously.

Similar to the NEC forms, the Joint Contracts Tribunal (JCT) standard forms of contract do not make any special provisions for how concurrent delay should be treated. As some of the cases referred to above have demonstrated, the courts in England and Scotland treat concurrent delay differently. This does not have to be the case, however.

In the recent case of North Midland Building Ltd v Cyden Homes Ltd (2018) EWCA Civ 1744, (2017) EWHC 2414 (TCC), the Court of Appeal considered the effect of bespoke amendments to the JCT Design and Build Contract 2005, agreed by the parties, including clause 2.25, which was amended at sub-clause 1.3(b) to read:

“2.25. 1. Any of the events which are stated to be a cause of delay is a relevant event; and 2. Completion of the works or of any section has been or is likely to be delayed thereby beyond the relevant completion date; 3. And provided that (a) the contractor has made reasonable and proper efforts to mitigate such delay; and (b) any delay caused by a relevant event which is concurrent with another delay for which the contractor is responsible shall not be taken into account; then, save where these conditions expressly provide otherwise, the employer shall give an extension of time by fixing such later date as the completion date for the works of section as he then estimates to be fair and reasonable.”

Notwithstanding their agreement to these terms, in response to Cyden’s defence to North Midland’s extension of time claim, the contractor argued that the amendment contravened the prevention principle such that time became at large.

At first instance, Fraser J disagreed, relying on the judgment from Jerram Falkus Construction Ltd v Fenice Investments Inc (No.4) (2011) EWHC 1935 (TCC), which established that:

“For the prevention principle to apply, the contractor must be able to demonstrate that the employer’s acts or omissions have prevented the contractor from achieving an earlier completion date and that, if that earlier completion date would not have been achieved anyway, because of concurrent delays by the contractor’s own default, the prevention principle will not apply.”

The Court of Appeal agreed with this assessment, stating amongst other things, that the amended clause was an agreed term and was intended solely to reverse the normally accepted approach, as approved in Walter Lilly.[15] This was that where concurrent delay is found to exist, the contractor will be entitled to a full extension of time. This was simply a different allocation of risk that the parties were entitled to agree between themselves, such that it should be given full effect.

Conclusions

It would seem that the English and Scottish courts remain divided in their approach to the treatment of concurrent delay, as between the Malmaison and the apportionment approaches. Such division appears to reflect the alternative positions taken by courts in other jurisdictions.

More recently, the second edition of the SCL protocol recommended the narrower approach, previously stated in Royal Brompton and endorsed in Saga Cruises v Fincantieri, although this depends upon the facts, the availability of sufficient contemporaneous records, and the ability to undertake a detailed critical path analysis. Notwithstanding, it now appears that parties to construction contracts can alter the balance of risk in relation to concurrent delay, in the rare circumstances where it may be demonstrated to exist, and that the courts will give effect to any reasonable amended terms.

[1] J Marrin QC, Society of Construction Law paper, 2002, note 1, page 2
[2] J Marrin QC, Society of Construction Law paper, 2013, page 2 and note 10
[3] Society of Construction Law Delay and Disruption Protocol, 2nd Edition, February 2017, paragraph 10.3
[4] At paragraph 10.4
[5] At paragraphs 10.7 – 10.9
[6] Keating on Construction Contracts, First Supplement to the Tenth Edition, 2017, paragraph 8-026
[7] J Marrin QC, Society of Construction Law paper, 2013, page 15 and note 62
[8] Keating, note 8
[9] JCT Standard Form of Building Contract, Private Edition with Quantities, 1980
[10] Keating on Construction Contracts, Tenth Edition, 2016, paragraph 8-027.
[11] Walter Lilly v Mackay, note 13.
[12] M Cocklin, Society of Construction Law, ‘International Approaches to the Legal Analysis of Concurrent Delay: Is there a solution for English Law?’, 2013
[13] At note 5, paragraph 10.7 – 10.10
[14] At note 2
[15] At note 13

This article was originally published in the CICES Construction Law Review 2019.