True concurrent delay is the occurrence of two or more delay events at the same time, one an Employer Risk Event and the other a Contractor Risk Event, the effects of which are felt at the same time.
This article is part of our ongoing Back to Basics series, which sets out the basics of English law, as they relate to key construction topics. The series provides practical insights on key construction topics in relation to English law for non-English law qualified in-house lawyers, contract managers and construction industry professionals.
In this article in our series, we discuss the topic of concurrent delay in construction projects.
True concurrent delay will be a rare occurrence
The term "concurrent delay" is often used to describe the situation where two or more delay events arise at different times, but their effects are felt at the same time. In this situation, the contractor will claim the employer's risk event entitles it to an extension of time and sometimes prolongation costs. The employer will claim the contractor's risk event entitles it to liquidated damages for delay.
It is normally more accurate to refer to the"concurrent effect" of delay events, where the focus should be on the simultaneous effects of the events rather than the events themselves. If an employer risk event and a contractor risk event 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". Alternatively, they may occur at different times, but could still give rise to concurrent delay if the effects are felt at the same time.
It is therefore necessary to be clear as to what is meant by "concurrent delay". The correct way to establish and deal with concurrent delays in English law extension of time claims is set out within Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd 70 Con LR 32. The case has been widely accepted in academic writing and in case law as the correct approach to assess claims arising from concurrent delay. In Malmaison, 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 [2012] EWHC 1773 (TCC). In Walter Lilly v Mackay, the judge explained that where there are two or more events giving rise to delay and one of them entitles the contractor to an extension of time then the extension of time will be granted. The judge went on to explain why this should be the case – the reasoning being based on "the prevention principle". The English law prevention principle is based on the premise that it would be wrong to deprive a contractor of its entitlement to the extension of time to which it would have been entitled, but for another relevant event occurring for which the contractor is responsible. In abstract terms, party A cannot require party B to adhere to its contractual obligations in circumstances where party A prevented party B from complying with its obligations.
The approach to concurrent delay was expanded upon in De Beers UK Ltd (formerly Diamond Trading Co Ltd) v Atos Origin IT Services UK Ltd [2010] EWHC 3276 (TCC). This was that "the contractor is entitled to an extension of time but he cannot recover in respect of the loss caused by the delay". This is explained as:
"…the rule where delay is caused by the employer is that not only must the contractor complete within a reasonable time but also the contractor 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 he is entitled to have the time within which to complete which the contract allows or which the employer's conduct has made reasonably necessary."
Explaining further as to the damages that a contractor may be able to recover:
"…the contractor cannot recover damages for delay in circumstances where he would have suffered exactly the same loss as a result of causes within his control or for which he is contractually responsible".
The same practical approach, that if employer and contractor responsible events are both 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 practical assessment of a contractor's entitlement
The delaying events and their effects must be established 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". 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". At this point, good and detailed project records will be invaluable to support a claim.
The Society of Construction Lawyers' Delay and Disruption Protocol (the "SCL Protocol") is widely accepted across a number of jurisdictions as the correct approach in assessing concurrent delay. The SCL Protocol 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 concurrent delay for which the contractor is responsible for should not reduce the extension of time that the contractor would be entitled to as a result of the event for which the employer is responsible.
As to damages, the SCL Protocol suggests that the contractor should only be entitled to damages if it can separately identify the additional costs caused by the event for which the employer is responsible from those caused by the contractor. In summary, the contractor cannot recover costs that it would have incurred as a consequence of its own breach. Again, record keeping can play a key part for both a contractor and employer establishing the costs caused by a relevant event.
Parties can agree how to deal with concurrent delay
While jurisprudence on the handling of concurrent delay has developed significantly over recent years, the manner in which concurrent delay will be dealt with is also influenced by the parties' agreement in the contract. Providing the relevant rules on contractual interpretation are met, 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.
As an example, the FIDIC 2017 suite includes a clause which provides parties with the ability 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 how concurrent delay should be dealt with but point to the SCL Protocol, referred to above.
Final thoughts
Further to the cases referred to above, the judge in the 2016 case of Saga Cruises BDF Ltd v Fincantieri SpA [2016] EWHC 1875 (Comm) provided some helpful guidance with reference to the judgment in Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm) and other. She highlighted:
- The requirement to show concurrency, 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 cause delay to the contractor.
- Rejection of "the idea of reliance on"notional or theoretical delay" as contrasted with proof that the event or act causes actual delay to the progress of the works".
If concurrent delay arises, the party wishing to establish the fact of concurrent delay will wish to be able to rely on records or other substantive evidence to prove its case and support a claim for time (and to avoid any claim for damages for delay).
Parties may however want to take pre-emptory steps to avoid the uncertainty or difficulties of establishing concurrent delay by addressing the issue in the contract. This, however, will very much depend on the facts and each party's appetite for risk – a contractor foregoing the opportunity to claim concurrent delay, increases the risk to it of a failure to complete the works on time.
If you have any questions about the points raised in this article, please contact Mike Stewart or Mary Lindsay.
Please also see our recent article in this series, which discussed the topic of liquidated damages.
Footnotes
[] Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm)
[] Back to Basics: How to use liquidated damages clauses effectively
[] Royal Brompton Hospital NHS Trust v Hammond (No. 7) [2001] EWCA Civ 206.
[] Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd [2007] EWHC 447 (TCC).
[] Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm).
[] North Midland Building Ltd v Cyden Homes Ltd [2018] EWCA Civ 1744.
[] With reference also to Royal Brompton Hospital NHS Trust v Hammond (No. 7) [2001] EWCA Civ 206.