Since its publication last year the SCL delay protocol(Footnote1) has generated extensive comment across the industry. Most of this has been concerned with the protocol's ideas on the best way to programme and document ongoing projects and this has led to a lively debate about the cost and feasibility of the protocol's approach, especially for smaller jobs. The protocol is also successfully raising awareness of the wide variety of available programming techniques and their very different functions and outcomes.
One area which has received less attention is how the protocol deals with the vexed question of concurrent delay. This is a phenomenon which can cause significant problems in particular for the proper assessment of extensions of time and loss and expense on substantial or complex projects where, whether by accident or design, a number of activities overlap or trades are working in parallel. The term "concurrent delay" is however commonly used in a number of different ways. Before we look at how the protocol approaches the subject, we therefore need to disentangle these different strands. Probably the key feature of concurrent delay is that it arises where there are two or more delay events, completely independent of each other in terms of causation, which have each delayed completion at the same time. Concurrent delay therefore only arises where any one of these separate delay events would on its own have operated to put back the date of practical completion.
The example of concurrent delay which is usually given is where at the start of a job the employer could not give access to the site (perhaps because of a delay in completing its purchase) while at the same time the contractor was not ready to start because, for example, he had failed to appoint the ground works sub-contractor in time. This is of course the most straightforward possible fact situation where both the fact of concurrent delay and its length can be assessed without the need for sophisticated programming of any kind. If all concurrent delay was as easy to analyse, it would not have caused the problems which it has.
It is worth adding here that this simple scenario is an example of so-called true concurrence. This is where two or more separate and independent delay events have each delayed completion from the same point in time onwards. According to many commentators the key distinction to be drawn is between this form of concurrent delay and what the protocol calls "the concurrent effect of sequential delay events". This latter variant arises where the effects on the completion date of two or more such delay events are felt at the same time for a period but where those effects do not necessarily begin at the same time. This distinction is important because as discussed below, on the basis of the current case law the type of concurrent delay concerned may help determine whether the contractor is entitled to an extension of time or not.
It is important to pause there, however, and recognise the significance of the contract terms which apply. Though earlier drafts of the protocol were widely read as suggesting that it should have contractual force, the final published version makes clear that: "It is not intended that the protocol should be a contract document. Nor does it purport to take precedence over the express terms of a contract or be a statement of the law…" (Introduction, Paragraph B).
Indeed, in its final version one of the main purposes of the protocol is expressed to be as a guide to how delay issues should be tackled at the time that the contract is being drafted and negotiated. In the meantime, its drafters accept "that the protocol may have limited application to contracts that have been drafted and negotiated without the Protocol in mind, particularly contracts in existence at the time the Protocol was published." (Introduction, Paragraph D).
In other words, according to its drafters, the protocol does not necessarily apply to any of the current standard forms of construction or engineering contract, all of which were of course "in existence at the time the Protocol was published." In order to decide in any particular case whether the protocol is of any value, the reader will therefore have to consider the express wording of the contract concerned and decide whether the approach advocated by the protocol complies with it or not.
There is also the crucial question of compliance with the law. Given that the protocol in its final form makes no claim to represent the current state of the law, it is again essential to give careful thought to whether or not it complies with the law before making use of it in any individual case.
As will be appreciated, the combined effect of these limitations on the protocol represents a potentially significant restriction on its usefulness for current contracts and disputes arising under them. If it cannot be used without prior investigation as authoritative guidance not only to practice but also to the law governing delay and if it may fall foul of the terms of the contract which the construction professional is trying to administer, then it could be said for present purposes at least to fall between every possible stool.
A good example of this is, I believe, provided by the position relating to concurrent delay.
The case widely thought of as the leading modern decision on concurrent delay is Boot v Malmaison(Footnote 2). The Malmaison case was concerned with an appeal from an arbitrator's award concerning the scope of his jurisdiction to decide issues relating to an extension of time claim raised on the defendant's pleadings. The relevant contract was JCT 80. In the opening paragraphs of his judgment the judge recorded certain matters which had previously been agreed between the parties for the purposes of those proceedings. These included the following: "it is agreed that 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 caused by the relevant event notwithstanding the concurrent effect of the other event…"
The judge, Dyson J, records this agreement without expressing a view as to its validity and it forms no part of the ratio of his judgment – in other words, of his decision for precedent purposes. Also, as a commentator has noted: "Different people have reached completely opposite conclusions about the significance of this case"(Footnote 3)
These difficulties are compounded by the small number of reported cases in which Malmaison has been applied. It is the case however that the so-called Malmaison principle has gained wide currency as authority for the proposition that a contractor is entitled to more time wherever there is concurrent delay – what one might call the broad approach to Malmaison. The true position may however be slightly less straight-forward.
In essence, the broad approach throws up two main questions. First, according to one view Malmaison only applies to true concurrency as defined above. The case cited in support of this view is Brompton Hospital v Hammond.(Footnote 4) Brompton Hospital too was concerned with a contract based on a JCT 1980 contract incorporating clause 25 in identical form to those in Malmaison. Clause 25 provides that a fair and reasonable extension is to be granted where as a result of a Relevant Event as defined "the completion of the Works is likely to be delayed thereby beyond the Completion Date."
In assessing the Malmaison decision, the judge, Judge Seymour, draws a distinction between different types of concurrency. In his judgment, Malmaison was not concerned with 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 that situation, observed the judge, the Relevant Event "simply has no effect upon the completion date." Judge Seymour contrasts this with a stuation in which: "the works are proceeding in a regular fashion and on programme, when two things happen, either of which, had it happened on its own, would have caused delay, and one is a Relevant Event, while the other is not. In such circumstances there is a real concurrency of causes of delay. It was circumstances such as these" concludes Judge Seymour: "that Dyson J was concerned with in… his judgment in Boot v Malmaison…"
Arguably, though, Judge Seymour's analysis is not entirely consistent with that of Colman J in the leading case of Balfour Beatty v Chestermount(Footnote 5), to which Dyson J refers with approval in Malmaison(Footnote 6) Balfour Beatty too was decided on the basis of clause 25 of the JCT 1980 form with its emphasis on the need for any extension to be fair and reasonable. In the Balfour Beatty case Colman J was asked to rule on two questions arising from an arbitrator's award. Both questions related to the grant of an extension of time "in respect of a Relevant Event occurring during a period of culpable delay." As is well known, Colman J concluded that in granting such an extension, the architect ought to award a so-called "net" extension of time by adding to the existing Completion Date as extended any period which he considers fair and reasonable by way of extension for the Relevant Event concerned.
In Colman J's decision there is no discussion whatever of concurrent delay. It could be said, however, that the whole premise of the Chestermount case, and Colman J's decision, rested on the principle that under JCT 1980 the architect could properly grant an extension of time for a delay caused by a Relevant Event at a time when the contract was already being delayed by a contractor delay – arguably the opposite of the conclusion reached by Judge Seymour on the basis of the same contract form, and in a judgment in which he cites the Chestermount decision with approval.
So where does this apparent conflict take us? One point to note is that, while Mr Justice Colman may be anticipating the
broad approach to Malmaison, he does see some limits to the contractor's right to time. Specifically, he notes that: "There may well be circumstances where a relevant event has an impact on the progress of the works during a period of culpable delay but where that event would have been wholly avoided had the contractor completed the works by the previously fixed completion date. For example, a storm which floods the site during a period of culpable delay and interrupts progress of the works would have been avoided altogether if the contractor had not overrun the completion date. In such a case it is hard to see that it would be fair and reasonable to postpone the completion date to extend the contractor's time." From his discussion of this issue it is clear that Colman has in mind here Relevant Events which are not an act of prevention – in other words not events for which the employer is responsible and which cause delay to the contractor.
So why did Colman J's storm, a Relevant Event, not qualify for an extension? Because, as will be seen from the above passage, the Judge decided that such a conclusion would not be "fair and reasonable" in the circumstances. The JCT family of contracts provides that even where a Relevant Event has delayed or is likely to delay completion, any extension must in the opinion of the architect be "fair and reasonable". In appropriate circumstances, the discretion accorded to the architect may therefore mean that a delay, despite qualifying as a Relevant Event which delayed completion, will not result in the grant of an extension of time. This is, then, the second potential limit to the scope of Malmaison. It may indeed be by this means (and subject always to the express provisions of the relevant contract) that we will see the re-emergence of the principle of so-called "dominant" delay which Malmaison was thought by some to have laid to rest.(Footnote 7)
As ever, though, (with the exception of Mr Justice Colman's flood) the decided cases provide little or no guidance as to how any such broad discretion should be applied by the certifier or indeed the court. In practice, the results of this approach could be arbitrary and unpredictable, while Judge Seymour's "first in time" philosophy does at least have the merit of simplicity.
Given the current uncertainties of the law, how does the protocol match up? Its guidance in relation to concurrency is set out in Section 1.4 of the protocol which begin at 1.4.1 with the general statement: "Where Contractor Delay to Completion occurs concurrently with Employer Delay to Completion, the contractor's concurrent delay should not reduce any EOT due." Contractor and Employer Delay to Completion are each defined as delays which will cause a contract completion date not to be met.
The protocol then goes on to draw a distinction, as discussed above, between true concurrent delay and what it terms "the concurrent effect of sequential delay events". (Paragraphs 1.4.4 and 1.4.6). In both cases, the protocol concludes that the contractor should be entitled to an extension of time for the employer delay to completion (paras. 1.4.5 and 1.4.7) subject to one exception which is considered below.
Apart from that exception, the protocol has therefore endorsed the broad approach to Malmaison as a principle of universal application without apparently any allowance for the certifier's discretion or the relative weight of the delays. This too has the merit of simplicity but, as we have seen, may not fully reflect the law.
And the exception? This is set out in paragraph 1.4.8 of the guidance which tackles a Balfour Beatty v Chestermount type situation where (in the words of the protocol) "an employer risk event occurs after the contract completion date, in a situation where failure to complete by the contract completion date has been caused by contractor delays."
In these circumstances, the protocol suggests that an extension should be granted as above except where that event is "a non-compensible employer risk event". In that case, suggests the protocol, no extension should be granted. This is, it would seem, an attempt to take account of the issue raised in the extract from the judgment in Balfour Beatty v Chestermount quoted above. Certainly the judge's example in Balfour Beatty v Chestermount of a storm which floods the site after PC would as exceptionally adverse weather and/or a specified peril give rise under JCT 1998 to a claim for time but no money. At least under the JCT form it is likely that most of the relevant events falling into Colman J's category of events which are not acts of prevention and which "would have been wholly avoided had the contractor completed the works by the previously fixed completion date" would also fall into the protocol's exception. Other examples from the JCT forms include strikes or works by statutory undertakers.
Given the complexity of this subject, any sweeping conclusions – however tempting – would be unwise. As we have seen, the decided cases are arguably impossible to reconcile. This may be because each of them was concerned with specific issues which did not require the judge to express a view on concurrent delay as a whole. In addition the scope of a certifier's discretion is in any case difficult to define, and it is probably unwise to try to do so exhaustively. In the circumstances the protocol's approach to the issue represents one way forward but it ignores or seeks to supplant the certifier's discretion and is therefore potentially a blind alley. It cannot (and in fairness does not seek to) plug the gap left by the unhappy present state of the law.
Footnotes
Footnote 1
The Delay and Disruption Protocol, published by the Society of Construction Law, October 2002 and revised March 2003
Footnote 2
Henry Boot Construction (UK) Limited v Malmaison Hotel (Manchester) Limited 1999, 70 CLR page 32
Footnote 3
Paper by Jeremy Winter, Chairman of the SCL Delay Protocol working group, January 2002
Footnote 4
The Royal Brompton Hospital NHS Trust v Hammond and others (No 7) 2000, 76 Con LR p148 at p173
Footnote 5
Balfour Beatty Building Limited v Chestermount Properties Limited (1993) 62 BLR 1
Footnote 6
It may also be at odds with his conclusion later in this substantial judgement that in the event of concurrent delay the contractor "would be entitled to extensions of time by reason of… relevant events notwithstanding its own defaults" (Brompton Hospital, p127)
Footnote 7
A more up to date test has been proposed by John Marrin QC – namely, whether the two causes of delay have what he calls "equal causative potency" (2002 18 Construction Law Journal, p436)
For further information please contact Henry Sherman at henry.sherman@cms-cmck.com or on +44 (0)20 7367 2526
