Jonathan Parker unpicks the complex issues that can arise with concurrent delay and extensions of time.
Jonathan Parker
Perhaps the answer to the title of this column is obvious. After all, if it were clear, then this would be a short column and to be honest this topic has kept me on my toes (and, thankfully, others) for years:
“Extra time is an endless source of disputes. Nineteen of the 20 teams in the English Premier League are convinced that the extra time Manchester United gets at the end of each game at Old Trafford (so called “Fergie time”) never makes a fair and reasonable allowance for the delay and disruption that took place in the preceding ninety minutes. Awards of extra time in construction and engineering contracts cause almost as much trouble.” (Time For Completion, Michael Curtis QC, Construction Law Journal)
So what are we talking about here? Let’s imagine that a main contractor is building a hotel under a JCT Standard Building Contract and there are delays arising from late provision of design information from the employer and inability to resource materials by the contractor. These delays have overlapping impact. On the face of things, you might say there is concurrent delay. The question would then be whether the contractor is entitled to an extension of time for the employer risk event given that they were in delay too.
The first point is fairly easily dealt with – there is no such thing as concurrent delay. It would be incredible for two events to occur at precisely the same time that cause delay. The SCL Delay and Disruption Protocol describes this as “true concurrent delay”.
The Protocol helpfully also adds: “The term ‘concurrent delay’ is often used to describe the situation where two or more events arise at different times, but the effects of them are felt (in whole or in part) at the same time. To avoid confusion, this is more correctly termed ‘the concurrent effect’ of sequential delay events.”
That terminology suits the purpose, so let’s have a think about “the concurrent effect” of two events and how the law deals with them.
For several years there has been debate about whether the consequences should be apportioned, whether the “dominant cause” approach is the correct one and many other weird and wonderful solutions to this conundrum. Yet as interesting as those are, there isn’t room to weigh them up here.
What we do have though is the courts following an “effective cause” approach (for example, in Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm)). In very broad terms this means that where there are two sequential delay events, one being employer risk and the other contractor risk and the delay effect runs concurrently, the one that occurred first is considered the “effective cause”.
The contractor will be sitting pretty if the effective cause was the employer risk event since they will be entitled to the extension of time. Not so though if their risk event reared its head beforehand.
Some might be choking on their coffee whilst reading this and screaming “what about Walter Lilly v MacKay?”. It was a recent tussle over that case that led me to write on this very subject. The Walter Lilly case was dependent on the wording of the contract:
“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. Part of the logic of this is that many of the Relevant Events would otherwise amount to acts of prevention …” Walter Lilly & Co Ltd v Mackay and anor (No.2) [2012] BLR 503, per Akenhead J.
So it won’t always follow that where there is concurrent effect the contractor will be entitled to an extension of time. Unfortunately, that is the often held belief.
But what does all of this really mean?
First, it could be the case that the contractor will get extra time if the same contract is used as in Walter Lilly, or one with similar provisions. However, under a different contract this may not necessarily be the case.
Some brighter people than me have also identified that the authorities have left open the possibility for causation to be considered (in the sense of showing, as a matter of fact and law, what caused the delay), irrespective of which event occurred first. This is partly due to the leading authorities not considering causation at length, but also partly due to the wording of the contracts in question.
There is also room for arguing an “intervening cause”, if an event that occurred after the first event (the effective cause) then took over as the effective cause. Again, this is something that has foundations in English law but has not yet been applied to this type of scenario.
Until then, what can I say in summary? Well, in short, the Walter Lilly case doesn’t mean that a contractor will always be entitled to an extension of time where there are two concurrent effects. And it’s also worth noting that this all becomes a whole lot easier with the right contract clauses.
Jonathan Parker is director of Quigg Golden Solicitors
Image: Johannes Hansen/Dreamstime.com
