My previous post on legal transplants covered endeavours clauses. In this article, I am addressing concurrent delays, which is another interesting topic from the perspective of international construction projects.
Concurrent Delay – The Phenomenon
Delays in general are a tricky business. As opposed to other types of contractual changes, such as variations, delays always imply negative consequences. These consequences are imposed on either the employer or the contractor of the project, depending on which is responsible for causing the delay. It is safe to say that neither party welcomes these consequences with open arms, but will rather try to avoid them at all cost. This being the case, delays usually carry the risk of conflict with them.
The risk of conflict tends to increase in the event of concurrent delays. A concurrent delay means a delay that has been caused by two or more events or circumstances at the same time. Even without one of these events, the delay would still have materialised. The problem with concurrent delay arises if both the employer and the contractor are each (at least partially) responsible for one of the events causing delay.
An example of this would be a scenario where (1) the employer delays the review process of critical design documents (or delivery process of the same, depending on the type of project) and, meanwhile, (2) the contractor performs repairs on deficiently performed works, whilst (3) both of these actions affect the critical path of the project and delay its completion, events or circumstances at the same time. Even without one of these events, the delay would still have materialised. The problem with concurrent delay arises if both the employer and the contractor are each (at least partially) responsible for one of the events causing delay.
Does the contractor get an extension of time for the concurrent part of the delay despite the fact that, even without the employer’s delay, the project would have suffered an equal delay that the contractor is responsible for?
Concurrent Delays under English and Finnish Law
Unless the construction contract specifically addresses concurrent delays, the issue is subject to contractual interpretation. Under common law, there are at least two alternative approaches for handling concurrency (see link below): the ‘Malmaison Approach’ leans towards the contractor being granted an extension of time, whereas the ‘Apportionment Approach’ implies that the responsibility for the delay could be apportioned between the two causes.
English courts have generally adopted the Malmaison Approach, and so under English law, unless otherwise agreed in the contract, the contractor would be granted an extension of time despite concurrency.
Under Finnish law, ultimately, the effect of concurrency will depend on the contract. The problem is that the wording can be very ambiguous as to concurrency. If the contract states that the Contractor shall be entitled to an extension of time if and to the extent that completion of the works is or will be delayed by acts of the Employer, the relevant question is has the completion in fact been delayed by the acts of the Employer considering that the same delay would have materialised independent of the Employer’s delay.
It is worth noting that ‘real’ concurrent delays are, in fact, quite rare. Sometimes, events only seem concurrent, because the programme (detailed schedule of the works) is not sufficient for verifying the actual critical path and the impact of each delay event on said critical path. This is important to keep in mind, since after all, in most large scale projects, it is not the delay as such that entitles the contractor to an extension of time; only delays to the completion of the project are relevant in this context.
In these circumstances, the question of concurrency could be avoided by both parties paying sufficient attention to drafting the programme initially and then keeping it up to date during the project execution. It may show that only one of the delays affected completion.
Since delays in general tend to be a rather volatile topic, there is really no magic wording which would eliminate all risk of disputes relating to delays in a construction project. A good starting point, however, is to specify in the contract – and, importantly, to do so unambiguously – how concurrent delays are to be resolved, along with drafting a sufficiently detailed programme and keeping it mutually up to date at all times.
The programme should show the current critical path at any given time, all dependencies between the various phases of execution (also for those phases that are not on the critical path at that particular time), and the float included in the programme. This way, upon each delay causing event, the programme can be updated without unnecessary argumentation as to, for instance, the alternative chain of dependencies that form the new critical path as a result of the delay.
For common law discussion, see e.g.: