When works run late the employer and contractor need to know who is responsible and whether the contractor is entitled to an extension of time or whether the employer can claim liquidated damages. Often there will be more than one delaying event and the contract administrator must therefore:
- Identify the event that has caused the actual delay to completion.
- Where there are truly concurrent delaying events which both delay completion, determine whether the contractor is entitled to an extension of time.
- How to identify the event that has caused the actual delay to completion.
The question is which delaying event caused the completion date to be delayed. While it may initially seem that there are concurrent delays, on analysis it may be clear that in fact only one of the delaying events affected the completion date. The example given by the judge in Brompton Hospital NHS Trust v Hammond (No 7) (2001) was where a contractor is in delay because he cannot obtain sufficient labour, and a delay event then occurs, which would, if it had been the only cause of delay, have entitled the contractor to an extension of time. However, due to the existing delay, it had no effect on the completion date and in that situation the contractor is not entitled to an extension of time. This was thrown into some doubt by the dissenting judgment in a recent Scottish case City Inn v Shepherd Construction Limited (2010). The dissenting judge may have been seeking to suggest a different test namely simply to look at the delaying event which would entitle the contractor to an extension of time in isolation and consider whether that alone would have caused delay to the completion date. In a subsequent English case (Adyard Abu Dhabi v SD Marine Services (2011)), Adyard tried to argue on the basis of this dissenting judgment. The court did not agree and confirmed that the Royal Brompton analysis is correct.
- If there are truly concurrent delaying events that both delay completion, is the contractor entitled to an extension of time?
This issue arises where the test set out at point 1 above has been considered and it has been determined that there are in fact two delaying events, which have caused delay to the completion date and neither event is dominant. The legal position in England in such a situation was set out in the case of Henry Boot (Construction (UK) Limited v Malmaison Hotel (Manchester) Limited (1999). It said that in this situation the contractor is entitled to an extension of time. This was thrown into doubt by the City Inn case. In that case the Scottish courts decided that it may be appropriate to apportion responsibility for delay between the employer and the contractor. There has been much conjecture that the English courts will follow this decision. It seems however from recent cases that Malmaison remains the position in England. In De Beers UK Ltd (formerly Diamond Trading Co Ltd) v Atos Origin It Services UK Ltd (2010) the court confirmed that where there is concurrent delay the contractor is entitled to an extension of time and in the Adyard case the court confirmed that Malmaison sets out the English legal position.
It should be noted that most of the cases relate to construction contracts based on JCT. The JCT suite of contracts simply requires the contract administrator to make a fair and reasonable assessment of an extension of time and therefore (unless there are amendments to the contract) the case law referred to above applies. Other forms of contracts may contain different provisions that have a different effect on concurrent delays.