The Society of Construction Law’s (SCL) Delay and Disruption Protocol was first published in 2002. The intention was to provide a scheme whereby delay could be better controlled and managed during the construction process. The SCL has always said that, overall, the Protocol aims to set out and be consistent with good practice (rather than best practice). Following the publication of an intermediary update, known as Rider 1, on 1 July 2015, in February 2017 the Second Edition of the Protocol was released.1
In updating the Protocol, there were eight specific terms of reference:
- whether the expressed preference should remain for time-impact analysis as a programming methodology where the effects of delay events are known;
- the menu and descriptions of delay methodologies for after the event analysis;
- whether the Protocol should identify case law (UK and international) that has referenced the Protocol;
- record keeping;
- global claims and concurrent delay;
- approach to consideration of claims (prolongation/disruption – time and money) during currency of project;
- model clauses; and
The Second Edition helpfully builds on the guidance provided in the First Edition and Rider 1. We set out below one or two of the key elements.
Legal status of the Protocol
The Protocol has no force of law (unless it is adopted into a contract, which is a very rare occurrence). However, it has been used as a benchmark for how to approach delay analysis. This is more the case in Australia than the UK. HHJ Toulmin CMG QC in the case of Mirant Asia-Pacific Construction (Hong Kong) Ltd v Ove Arup and Partners International Ltd & Anr2 noted that:
“The first problem with this method is that it is not an accepted method of delay analysis for construction programming practitioners…It is not mentioned in the Protocol as a recognised method of delay analysis.”
In 2017, in the Queensland case of Santos Ltd v Fluor Australia Pty Ltd3, the extent of the disruption was calculated using the measured mile approach which Flanagan J noted by reference to the brand new Second Edition of the Protocol as an accepted method of calculating lost productivity.
Forms of delay analysis
The Second Edition of the Protocol makes it clear that prompt, indeed contemporary, evaluation is to be preferred. There is a new Core Principle 4 which notes as follows:
“4 Do not ‘wait and see’ regarding impact of delay events (contemporary analysis)
The parties should attempt as far as possible to deal with the time impacts of Employer Risk Events as the work proceeds (both in terms of EOT and compensation). Applications for an EOT should be made and dealt with as close in time as possible to the delay event that gives rise to the application…”
If this is not possible, the Protocol also considers the most appropriate form of delay analysis after the event. Here, the original Protocol recommended that one particular form of delay analysis, namely the time-impact form of delay analysis methodology, be used wherever the circumstances permitted, “both for prospective and (where the necessary information is available) retrospective delay analysis”. This was not universally supported and was one of the main reasons for the review of the existing Protocol. One particular issue with the time-impact analysis can be its reliance upon theoretical modelling and not the actual sequence of events. At the same time, the original Protocol made no mention of the “windows” form of delay analysis which has certainly become one of the most used forms of delay analysis, arguably because it is considered to be one of the most reliable.
This omission has now been rectified and under the Second Edition of the Protocol, no one form of delay analysis is preferred, where that analysis is carried out some time after the delay event or its effect. Instead, the Second Edition of the Protocol sets out the factors that need to be taken into account in selecting the most appropriate form of delay analysis as well as providing a helpful explanation of many of the delay analysis methodologies currently in common use. It begins with the prudent comment that:
“Irrespective of which method of delay analysis is deployed, there is an overriding objective of ensuring that the conclusions derived from that analysis are sound from a common sense perspective.”
The Protocol then lists a number of criteria which should help determine the choice of the appropriate method of delay analysis. These include: the Contract terms, the circumstances of the project, the nature of the relevant or causative events, the claim or dispute, the value of the project, the time available and the available project records, as well as the need to ensure that a proportionate approach is taken. There is an emphasis on what actually happened and a recognition that a theoretical delay analysis which is divorced from the facts and common sense can be unhelpful in ascertaining whether in fact the relevant delay event caused critical delay to the completion date and the amount of that delay. The key to establishing the critical path to completion is often the practical analysis of the relevant facts including production and/or resource data, not what the software says.
The 2016 pre-release version of the FIDIC Yellow Book included at sub-clause 8.5 the following new provision:
“If a delay caused by a matter which is the Employer’s responsibility is concurrent with a delay caused by a matter which is the Contractor’s responsibility, the Contractor’s entitlement to EOT shall be assessed in accordance with the rules and procedures stated in the Particular Conditions (if not stated, as appropriate taking due regard of all relevant circumstances).”
The SCL say that the approach to concurrent delay in the original Protocol has been amended in the Second Edition to reflect recent case law. The Second Edition defines concurrent delay in this way:
“True concurrent delay is the occurrence of two or more delay events at the same time, one an Employer Risk Event, the other a Contractor Risk Event, and the effects of which are felt at the same time. For concurrent delay to exist, each of the Employer Risk Event and the Contractor Risk Event must be an effective cause of Delay to Completion (i.e. the delays must both affect the critical path). Where Contractor Delay to Completion occurs or has an effect concurrently with Employer Delay to Completion, the Contractor’s concurrent delay should not reduce any EOT due.”
Where concurrent delay occurs, then any Contractor Delay should not reduce the amount of an extension of time that may be due to the Contractor as a result of the Employer Delay. The Second Edition of the Protocol recognises that true concurrency is rare4, and this definition is clearly based on the English approach where concurrency is said to arise only where there are events that are equally causative of critical delay. In other words, if one of the events was the dominant cause of delay, then the other would not be truly concurrent because it would not be an effective cause of delay.
When discussing contemporary delay analysis, the Second Edition of the Protocol also notes that, where Employer Risk Events and Contractor Risk Events occur sequentially but have concurrent effects, the delay analysis should determine whether there is concurrent delay and, if so, whether an extension of time is due for the period of that concurrency.
The Second Edition of the Protocol gives the following example. A Contractor Risk Event will result in five weeks’ Contractor Delay to Completion, delaying the contract completion date from 21 January to 25 February. Independently and a few weeks later, a variation is instructed on behalf of the Employer which, in the absence of the preceding Contractor Delay to Completion, would result in Employer Delay to Completion from 1 February to 14 February. The Protocol takes the position that the Employer Delay will not result in the works being completed later than would otherwise have been the case because the works were already going to be delayed by a greater period because of the Contractor Delay to Completion. The only effective cause of the Delay to Completion is the Contractor Risk Event.
The approach to notices
We have previously discussed in IQ the importance of complying with project notice procedures and time bars. This is, unsurprisingly, endorsed by Rider 1 which stresses that:
“The parties and the CA should comply with the contractual procedural requirements relating to notices, particulars, substantiation and assessment in relation to delay events...”
This will become ever more important under the new FIDIC Forms which have an increased emphasis on time limits for notices and the provision of further particulars.
The Second Edition says this of global claims:
“The not uncommon practice of contractors making composite or global claims without attempting to substantiate cause and effect is discouraged by the Protocol, despite an apparent trend for the courts to take a more lenient approach when considering global claims.”
Again, the reference to courts really means “English Courts”. The Second Edition continues that Contractors should be aware that there is a risk that a global claim will fail entirely if any material part of the global loss can be shown to have been caused by a factor or factors for which the Employer bears no responsibility. The Contractor must try to provide adequate records to enable the Engineer or other adjudicator to establish a causal link between the Employer’s Risk Event and any resultant costs or delay.
This further confirms the importance of maintaining records. The new FIDIC Form will impose a greater burden on all parties. Both the Employer and Contractor must keep such contemporary records as may be necessary to substantiate a Claim. Sub-clause 20.2 notes that:
“‘contemporary records’ means records that are prepared or generated at the same time, or immediately after, the event or circumstance giving rise to the Claim.”
Appendix B of the Protocol lists record types relevant to delay and disruption. Further, Core Principle 1 of the Second Edition notes that:
“Contracting parties should reach a clear agreement on the type of records to be kept and allocate the necessary resources to meet that agreement.”
Under the new FIDIC Form, the Engineer may monitor the record keeping and/or instruct the Contractor to keep additional contemporary records. Here the Protocol provides guidelines on the keeping of records and advises that in order to avoid disputes, where practicable, records should be signed by representatives of the Employer and Contractor. The Protocol recognises that there is a cost here (the benefit being that better records mean, in theory, fewer disputes) and specifically notes that:
“Good record keeping requires an investment of time and cost, and the commitment of staff resources by all project participants. It is therefore recommended that, prior to preparing the tender documents, the Employer considers its requirements of the Contractor in relation to record keeping and includes these within the tender documents.”
Whether that becomes a standard feature, remains to be seen.
As noted above, the Second Edition of the Protocol has no legal effect (and so is not binding on any Tribunal) unless it is specifically incorporated into a contract. It has also primarily been prepared from a common law perspective. Of course, its fundamental starting point, namely “that transparency of information and methodology is central to both dispute prevention and dispute resolution”, is universal. Where, however, the Protocol continues to have value and an increasing influence is by providing guidance as to good (and even best) practice