The Race To See Who Gets There First

02/02/2021

The Space Race which gripped the USA and the Soviet Union throughout the 1960s primarily focussed on who would complete the first successful manned mission to land on the Moon. When Apollo 11 touched down and Neil Armstrong confirmed “the eagle has landed” on July 20, 1969 the race was won. Had the Soviet Union turned up a week later no one would have been watching. Timing is everything!

In the vast majority of instances, delay analysis undertaken by Pyments, whether seeking to substantiate entitlement or sitting in judgement of same, there are issues of concurrency. Again, timing is everything!

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. In this scenario, the question of whether the contractor is entitled to additional time is often the subject of great contention. The current position in English Law appears to focus on which delay wins the race to start impacting the Completion Date.

If the contract does not expressly address the issue of concurrency, the position in England and Wales is that the contractor is entitled to an extension of time for employer delay, even if that delay runs concurrently with a contractor delay. In Henry Boot v Malmaison (1999) the Judge determined:

“If there are two concurrent causes of delay, one of which is a Relevant Event, and the other is not, then the contractor is entitled to an extension of time for the period of delay notwithstanding the concurrent effect of the other event.”

Whilst this principle appears generally accepted within English Law the primary area of debate concerns the definition of concurrent delay when applying the “Malmaison” principle. One such definition applied by the Courts requires two delaying events to be of “equal causative potency”. This is where timing is everything.

In Adyard v SD Marine (2011), Adyard presented its case on the basis that causation could be established by just considering the variations (design changes) in isolation regardless of what other events might have been delaying the works and regardless of whether the variation would have any impact on actual progress (i.e. Adyard argued that the Court should only look at the event cited in relation to the contractual completion date; a theoretical delay would suffice, rather than an actual delay).

The Judge found that as a matter of fact the project was already in critical delay well before the design changes occurred and that Adyard was not entitled to additional time simply because the events did not actually cause delay. The Judge said that concurrent delay is:

“…a period of project overrun which is caused by two or more effective causes of delay which are of approximately equal causative potency.”

In more recent years the test for concurrency has been narrowed considerably by focussing on the point in time at which the delaying events occur. Such analysis will typically demonstrate true concurrent delay is rare (the pace Race equivalent of the USA and Soviet Union landing on the Moon at the same time!).

In Saga Cruises v Fincantieri (2016) there were a number of delays to the scheduled completion date (2nd March 2012). As a matter of fact, Fincantieri were responsible for delay prior to the scheduled completion date, and which delayed actual completion until 16th March 2012. Saga were responsible for delays from 2nd March 2012 and which would have prevented completion up to 14th March 2012.

Saga claimed liquidated damages for the entire delay period, whilst Fincantieri argued it was entitled to an extension of time for the period of delay caused by the relevant event. The Judge concluded that unless there is a concurrency actually affecting the completion date as then scheduled, the contractor cannot clam the benefit of it. Causation in fact must be proved based on the situation at the time as regards delay. Timing is everything!

This emphasis on the timing of delay events is supported by the SCL Delay & Disruption Protocol 2nd Edition (2017). A working example is provided which identifies a similar scenario to that which arose in Saga v Fincantieri in that there was a contractor risk event which started first and lasted the longest. The Protocol recommends the view 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. Thus, the only effective cause of the Delay to Completion is the Contractor Risk Event.”

The Adyard and Saga cases cited were both heard in the Commercial Courts. Whether the Technology and Construction Court follows the same approach remains to be seen. However, the timing of delay events and the issuing and recording of notices contemporaneously is now more important than ever.

Relying on a retrospective approach to clarify the intricacies of concurrent delay….?! …Houston we have a problem!!!

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