The decision in July 2012 in the Technology and Construction Court in the case of Walter Lilly & Company Limited v Giles Patrick Cyril Mackay and DMW Developments Limited is important in a number of respects.
The law on concurrent delays in relation to JCT contracts in England and Wales has a history. It really started with the 1999 Malmaison case in which the parties agreed that where there were two concurrent causes of delay; one was a Relevant Event and one was not. The contractor was then entitled to an extension of time. The judge accepted this, but it was never entirely clear whether he reached his own conclusion or simply went along with what the parties had agreed between them.
In 2010, a Scottish case, City Inn Ltd v Shepherd Construction Ltd, suggested that a contractor should only get an extension of time for a reasonably apportioned part of the concurrent delay.
Since then, the English courts have suggested that Malmaison remains the law of England and Wales.
That has now been categorically confirmed to be the case after the judge in Walter Lilly said: "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."
The Walter Lilly case also provided a useful summary, with some new nuances, on the treatment of global claims.
A “global claim” or “total cost claim” is a generic description of claims typically relating to delay and/or disruption events where the individual cause and effect for each issue is not demonstrated, but the alleged cumulative effect is claimed instead. In other words, where either there has been delay to the completion date caused by a number of different events and the claimant (normally the contractor) is unable to link each event to a specific period of delay, or where there is clearly delay but the claimant cannot link its costs to each item of delay. In the past, global claims have rarely been accepted by the courts because claimants struggle to provide evidence linking the events on site with the delay, or the delay incurred with the costs incurred.
This case confirms that claims advanced on a global basis are not automatically “wrong” in principle and can still succeed if the circumstances merit it. Even, it seems, if a comprehensive and detailed assessment could have been (but has not been) carried out which would show individual cause and effect.
The judgment provides a useful summary of the court's treatment of global claims to-date and refines them into a number of key points. The claimant still has to prove:
- The events occurred which entitle it to loss and expense
- Those events caused delay and/or disruption
- That that delay and/or disruption caused it to incur loss and/or expense
The judgment did note that a contract, by specific wording, can make it difficult or prevent global claims from succeeding.
Mr Mackay has applied for permission to appeal. At the time of writing the court has not yet decided whether he should be granted permission.