Law and regulation of concurrent delay in Scotland

Similar to the position under English law, the general concept of concurrent delay is well developed and understood.  It can however be a difficult concept to apply in practice and it is frequently disputed when arising in construction claims for additional time.

There is no single definition of concurrent delay.  This was discussed in a leading case in Scotland, City Inn Ltd v Shepherd Construction Ltd [2010] CSIH 68, which is a decision of the Scottish Court of Appeal (known as the Inner House of the Court of Session – see more on this case below).  There the court noted that “concurrent delaying events” may refer to a number of different situations.  This included in the broad sense i.e. where two delaying events both have a causative influence upon a subsequent event such as completion, even though they do not overlap in time; and in the narrow or “true sense” i.e. where two delaying events both exist simultaneously, which may or may not also require a coincidence of start and/or end points.  (The latter is perhaps more akin to the definition in the Society of Construction Law’s Delay and Disruption Protocol 2nd Edition, which says that true concurrent delay is the occurrence of two or more delay events at the same time, the effects of which are felt at the same time and which are an effective cause of delay to completion.)  What may be applicable in the circumstances of a particular contract must always be looked at in the context of that contract’s terms. 

As per many other jurisdictions, there are no overarching statutory provisions setting out how concurrent delay shout be treated.  The applicable contract terms are always the starting point, to be considered in the relevant circumstances.  

In the event that a contract does not specifically deal with concurrent delay, parties turn to case law to establish their resulting rights and obligations. 

English law cases, although not binding on Scottish courts may be considered.  However the leading case in Scotland mentioned above, City Inn Ltd v Shepherd Construction Ltd, differs from the English law position.  City Inn found that one must firstly consider whether there was a “dominant” cause of delay i.e. 

If a dominant cause can be identified as the cause of some particular delay in the completion of     the works, effect will be given to that by leaving out of account any cause or causes which are not material. 

Depending on whether or not the dominant cause of delay is one for which the employer is responsible or not, a contractor’s claim for an extension of time to complete the works will or will not succeed.  

If however where there are two causes of delay, one being an event for which the employer is responsible and the other being an event for which the contractor is responsible and neither could be described as the dominant cause of delay, the court found that one should then turn to the concept of “apportionment” i.e. 

… it is open to the decision maker to apportion the subsequent delay in the completion of the     works as between both events and a claim for an extension of time by the contractor would not     necessarily fail.  In such a situation, which could, as a matter of     language, be described as one     of concurrent causes, in a broad sense … it will be open to the decision-maker, whether the     architect, or other tribunal, approaching the issue in a fair and reasonable way, to apportion the     delay in the completion of the works occasioned thereby as between the [event for which the     employer is responsible] and the other event.

In how the exercise of apportionment is carried out, the lower court in City Inn Ltd v Shepherd Construction Ltd [2007] CSOH 190, said that the degree of culpability involved in each of the causes of the delay and the “causative significance” of each (including the length of the delay caused and the significance of each) were important.  When it comes to approaching that apportionment in a “fair and reasonable way”, the Appeal Court in City Inn also noted that the background, in particular the possibility of a claim for liquidated damages (i.e. fixed damages which may be applied when a contractor does not complete the works by the completion date), must be borne in mind.  

It is worth noting that the City Inn decision was specific to standard form wording (the 1980 JCT standard form building contract) which expressly refers to the granting of a “fair and reasonable” extension of time, however it is considered as a leading case on concurrent delay in Scotland and has been the subject of much commentary. 

The English courts have subsequently considered and specifically rejected this application of apportionment (as per Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm) and Walter Lilly & Company Limited v Giles Patrick Cyril Mackay, DMW Developments Limited [2012] EWHC 1773 (TCC))

Much like in England, parties will typically each appoint programming experts/delay analysts as independent expert witnesses.  Such experts, although appointed by a party, owe a duty to assist the court and to remain independent of the parties.  They will review factual evidence (such as documentary and witness evidence) and again similar to the position in England they will usetheir preferred method of analysis out of a number of possible methods. 

The various methods of analysis are outlined in the Society of Construction Law’s Protocol. If the relevant contract specifies which method should be used, this should be adopted, but it is rare for a contract to specify this. Otherwise, there is no authoritative guidance as to which method is correct.  Again the commentary in English cases (for example those noted under in the England section above) as to the different possible methods of analysis may be considered, but would not be binding authority in Scotland. 

If a contract contained a provision which allocated the risk of concurrent delay to one or other party this would be effective, provided always that the provision was sufficiently clearly drafted.  Such clauses are not uncommon in Scottish law contracts. 

An event that is at the Contractor’s risk under the contract (a “Contractor Risk Event”) will result in five weeks 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 Risk Event, would result in delay to completion from 1 February to 14 February.

7.1 Is the Contractor entitled to an extension of time in respect of the variation? If so, for how long?

Assuming that the contract contains an extension of time clause entitling the Contractor to an extension of time for variations, here there is both an event for which the Employer is responsible and an event for which the Contractor is responsible.  The starting point would be to look at the contract, to see if there is any definition of concurrent delay and any provisions as to how a claim by the Contractor for additional time in such a situation should be treated. 

If the contract is silent, one would then look to which event may be described as the “dominant cause” of delay.  This is often done with reference to the event’s “causative potency”, which may involve looking at a critical path analysis of the works and applying a common sense approach.  For example, here it may be that in carrying out such an exercise, the Contractor Risk Event appears to be the dominant cause, because the causative potency of the variation instructed by the Employer is “weaker”.  In that case the Contractor would not be awarded any extension of time for the period 21 January to 25 February.  If however neither event could be described as a dominant cause, one would then apportion the delay between the two events, taking a fair and reasonable approach, in light of the degree of culpability and causative significant of each.  In that case it is likely that the Contractor would be awarded a partial extension of time, but not for the full period from 21 January to 25 February. 

7.2 Assuming the Contractor is contractually entitled in principle to recover delay-related costs relating to the variation, for what period (if any) could it recover those delay-related costs?

Again the starting point would be to look at the contract, to see if there is any definition of concurrent delay and any provisions as to how a claim by the Contractor for additional monies in such a situation should be treated. 

Assuming there is not, City Inn confirmed the general principle is that even if the Contractor is entitled to an extension of time, it is not automatically entitled to delay-related costs for an identical period.  

Where however the Contractor has incurred such delay-related costs which were caused both by the Contractor Risk Event and the variation instructed by the Employer, the case of John Doyle Construction Limited v Laing Management (Scotland) Limited 2004 S.C. 713 as confirmed by City Inn, found that it is possible to apportion these between the two causes.  This would again involve a balancing exercise of the degree of culpability and causative significance of each of the sources of delay.