This month’s contract clinic comes from a contractor worried about the SCL Delay and Disruption Protocol, which its client wishes to introduce on their contract. Anthony Hayes provides an answer.
The question
Our client wants to incorporate the Society of Construction Law (SCL) Delay and Disruption Protocol into the building contract and make it a contract. Are they entitled to do so, and what are the risks of doing so?
The answer
The SCL Delay and Disruption Protocol provides guidance on how to manage and resolve construction project delays and disruptions. The latest version is the second edition, which was published in February 2017.
It is an established legal principle that the parties involved in a contract have the freedom to negotiate the terms of an agreement. Therefore, if your client wants to incorporate the protocol into their building contract, they are free to do so, if the other party agrees.
However, there are some risks to incorporating the protocol into the building contract:
- A lack of clarity. Because the protocol is a relatively complex document, some of its provisions may be unclear or ambiguous. This could lead to disagreements and delays in resolving issues. In addition, while the document is well written so anybody can understand it, those not familiar with delay and disruption may misinterpret its provisions.
- The costs of incorporating the protocol into the contract. Incorporating the protocol into the contract may incur additional costs, both in terms of legal fees and the costs of implementing the protocol itself. The standard building forms are complex enough as they are. Adding further terms to these standard provisions inevitably makes a contract more administratively burdensome.
- Inflexibility. The protocol is a prescriptive document that outlines specific procedures and requirements for dealing with delays and disruptions. This may limit the parties’ ability to adapt to changing circumstances. It may also hinder resolution of issues in the most appropriate manner for the project. For example, the protocol lists six ways in which delay analysis should be performed. But it’s possible that another method may be more suitable.
- Inconsistencies or conflicts with other contract provisions. Including the protocol in a building contract may cause inconsistencies or conflicts with other contract provisions. This could lead to misunderstandings and disagreements about how to interpret and apply the contract.
For example, the NEC guidance notes provide prescriptive direction on how delays should be calculated using prospective analysis (time impact analysis – TIA). If a delay arises which has not been assessed using the NEC guidance, the protocol may recommend a retrospective analysis be applied.
Before incorporating the SCL Delay and Disruption Protocol into the building contract, these risks should be carefully considered and balanced against the potential benefits.
I would advise you and your client to seek legal advice to ensure that the protocol is incorporated in a clear, unambiguous and appropriate manner for the specific project at hand.
Anthony Hayes is an associate specialising in delay analysis at Decipher.
