Extension of time assessment - Don’t wait and see
Sam Playford explores the potential pitfalls of not adhering to the contractual timeframes when assessing extensions of time. Read on to find out more.
One of the most elusive and slippery of concepts surrounding delay analysis is that of concurrency. Look concurrency up in a dictionary and you will find a relatively straightforward definition along the lines of:
Concurrency: - Two or more events or circumstances happening or existing at the same time.
The standard meaning of the word is simple and can be easily understood. A common usage is in relation to prison sentences handed down in criminal courts. If a criminal is sentenced for two separate crimes the sentences will often be served concurrently, in other words at the same time. When sentenced to say 5 years and 4 years for two separate crimes, the prisoner will only serve 5 years before being released having served both sentences.
But to practitioners of construction law and delay analysis, the entire concept of concurrency has become a complex series of theoretical circumstances which are carefully picked over, weighed and measured in the search for the elusive true meaning of ‘Concurrency’. I have a colleague who helpfully differentiates the dictionary definition from the construction delay concept by the respective use of the phrases concurrency with a small ‘c’ (the dictionary term) and concurrency with a big ‘C’, (the construction delay concept). In the remainder of this article I will adopt that very useful differentiation. This article is about Concurrency, not concurrency.
There is of course guidance on what defines true Concurrency. There is also guidance on what is not Concurrency. Let us start with the 2nd edition of the SCL Protocol. Item 10 under the heading Core Principles reads:
10. Concurrent delay – effect on entitlement to EOT.
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.
Further guidance on the subject was provided in the judgment of Henry Boot v Malmaison, which included a relatively simple (and often cited) example:
Thus, to take a simple example, if no work is possible on a site for a week not only because of exceptionally inclement weather (a relevant event), but also because the contractor has a shortage of labour (not a relevant event), and if the failure to work during that week is likely to delay the works beyond the completion date by one week, then if he considers it fair and reasonable to do so, the architect is required to grant an extension of time of one week. He cannot refuse to do so on the grounds that the delay would have occurred in any event by reason of the shortage of labour.
This example was later commented upon in the judgement of Royal Brompton Hospital v Hammond and others:
It is, I think, necessary to be clear what one means by events operating concurrently. It does not mean, in my judgment, a situation in which, work already being delayed, let it be supposed, because the contractor has had difficulty in obtaining sufficient labour, an event occurs which is a relevant event and which, had the contractor not been delayed, would have caused him to be delayed, but which in fact, by reason of the existing delay, made no difference. In such a situation, although there is a relevant event, the completion of the works is not likely to be delayed thereby beyond the Completion Date. The relevant event simply has no effect upon the completion date.
The Scottish case City Inn V Shepherd provided an alternative and much wider view of Concurrency based broadly on the dictionary definition of concurrency, that is events (or their effects) occurring at least partially at the same time.
The intention of this article is not to provide further analysis of the potential for Concurrency, but rather to examine concurrency in an applied sense, that is to examine practical examples of when Concurrency might actually be a realistic answer to a delay analysis.
The concept of Concurrency is popular and has led to many articles being published examining the precise nature and meaning of Concurrency. It is not unusual to have the concept of Concurrency advanced, often as part of an initial briefing. A client or instructing solicitor will often mention that it is possible that we are looking at Concurrency, or that the claim advanced by a claimant includes Concurrency.
I have often been asked to investigate alleged or apparent Concurrent delays. Closer examination of the factual matrix surrounding the alleged concurrent events nearly always reveals that the apparent Concurrency was actually not Concurrency but that one or other of the delaying events was dominant, or that the impact of one had preceded the other. As can be seen from the section of the Royal Brompton Hospital judgement reproduced above, the sequence in which delaying events impact progress is important and can (and will) prevent Concurrency.
Often Concurrency appears to exist because there is a lack of detail. That isn’t to say that those who propose Concurrency have not taken the time to review the documents but rather that only when one carefully picks apart the detail does it become apparent that the two events do not fulfil the requirement of Concurrency within construction law.
Delays on a construction project can broadly be divided into two types of delay as follows:
The first of these, the isolated event is an event that suddenly impacts a delay on the project programme. The delay caused by it effectively comes to impact the programme at the point in time the delaying event occurs. This might typically be a variation order, or perhaps physical damage to completed works.
The second is an event which continues to cause delay whilst it is in progress over a period of time. These events often (though not always) stop the works on some or all of the project. Typically events like this might be a lack of labour, or a lack of access to a work site (or as section thereof).
Considering these two types of delay I find it difficult to come up with a practical example of delay in a construction environment that would lead to true Concurrency.
Take the first type of delay, the isolated impact. Let us consider that a VO (a variation order) was issued, requiring that a set of glazing units be re-manufactured using a superior quality of glass. The units have already been manufactured and delivered to site. Once the VO is issued the glazing units are effectively scrap. This will set in train a series of new activities (procurement, manufacture and delivery of the new units) that are definable in terms of duration and therefore the delay that would arise to the project as a result of the VO can also be defined. The required additional activities are defined and their durations (and therefore the delay caused) could reasonably be estimated when the VO was issued. Before the VO was issued there was no delay, once the VO was issued a delay existed that could reasonably be measured.
Now consider a second isolated event, a lorry reverses into the frame holding the same glazing units on site, breaking them all. As with the issuing of the VO, before the incident no delay existed, immediately after the event a delay caused by the need to remanufacture the glazing units was to be expected. As with the VO, It would be readily apparent that the units needed to be re-manufactured and the work involved could reasonably be programmed allowing a measure of delay arising to be established.
How could these events be concurrent? I don’t believe that they can be. Let us assume that the re-manufacturing process in each case would be the same, that the higher spec glass required by the VO is as readily procured as the glass used in the original units. So the delay caused by each event would be identical. Inevitably one of the events, the issue of the VO or the careless manoeuvering of a lorry on site must have occurred first, setting an identical re-manufacture process in train. Whichever event occurred first would become the dominant cause of delay. If the lorry struck first the VO would effectively become an instruction simply to use a different type of glass during the re-manufacturing process which in any case would have to be undertaken to replace the damaged units. If the VO landed first, the careless driving incident would simply have brought forward the inevitable scrapping of the unwanted glazing units. Unless the VO was delivered at the very instant the lorry was reversed into the glazed units, one of the events impacted progress before the other. As can be seen in the Royal Brompton Hospital judgement, the second of the two events would not cause any further delay as the first event had already precipitated the delay.
Alternatively, let us assume that glass required by the VO took an extra 2 weeks to procure rather than standard glass. If the VO was the first event then clearly it would be the dominant event and the Contractor would acquire a full extension of time. Had the lorry struck first then the Contractor would be liable for the delay caused by re-manufacturing. The delays were definable and one was clearly going to last longer than the other. In none of these circumstances would the delays be Concurrent.
Let us consider the second type of delay, the ongoing event. This I feel does give more scope for Concurrency. The example within the Boot v Malmaison judgement reproduced above, of exceptionally inclement weather and a shortage of labour, is an example of this. This is a relatively simple example because both lead to a complete halt on site. But even then the extract from Royal Brompton makes clear that if the Contractor’s delay was already operable, (the shortage of labour) then applying a subsequent relevant event would not have made any difference to the already existing delay arising from the shortage of labour. Consequently it would not represent a Concurrent critical delay. This seems to suggest therefore that the two events would need to start or at least to impact progress simultaneously. Again in these circumstances it is possible that the labour shortage and the poor weather could have both occurred during the same night, and they would both effectively impact the works at the same time, when the site was due to start work at 8 the next morning. So this appears to provide a limited set of circumstances in which Concurrent delay might occur. Two ongoing events occurring effectively simultaneously.
But most delays to a construction contract do not cause a complete stoppage of the works. If the specific circumstances described above did not occur would it be possible to have two ongoing delaying events causing critical delay? What would be needed is two ongoing events, the impact of which was felt at the same time, both impacting the critical path of the project (almost certainly the same work activity therefore) and having the same effect on that activity. Whilst not impossible, this is a very specific set of circumstances which could only occur very infrequently.
What if both an isolated event and an ongoing event occurred at the same time? Again looking at Royal Brompton the effects would need to be felt at the same time, otherwise one would already be an operable delay before the other delay came about. If the isolated event had already occurred, then only if the ongoing delay continued to cause delay once the isolated delay had concluded would it become a critical cause of delay. The commentary in Royal Brompton appears to preclude any conclusion of Concurrency.
If the ongoing event had already occurred and was causing ongoing delay then at the point the isolated event occurred it would either:
Once these scenarios are considered it appears to me that true Concurrency is rare.
Not impossible but rare.
Which brings me to an example of concurrency which I have identified myself. I was recently considering delays on a project which included a substantial basement of several floors. The basement had been constructed using a secant piled wall, with a capping beam and a basement slab. The programme envisaged the fit out of the basement, however the basement became flooded. The flooding effectively prevented fit out works from commencing. On investigation it became apparent that there were several causes of water ingress, some related to poor design, some related to poor workmanship. The causes of delay were equally related to both design and workmanship. By this I don’t mean that the number of defects were equally divided between design and workmanship defects but rather that the effective cause of delay was water ingress and that the water ingress resulted from both workmanship and design defects. Until all causes of water ingress had been addressed the flooding would still prevent any further progress on the project. Both the workmanship and the design issues were causing the same delay at the same time. This is an example of a single delay (standing water) caused by various events, some of which each party to the contract was liable for. Until all of the causes of delay were resolved the delay would continue. Resolution of any individual cause of delay in isolation would not reduce the delay at all. This appears to fit all of the criteria for a Concurrent cause of delay.
Andrew Farrer is a director of GT Fairway, providing expert advice on delay and scheduling within the construction industry.