Law and regulation of concurrent delay in Spain

Under Spanish Law, there is not a specific definition or regulation of “concurrent delay”. Concurrent liability concept is extensively used in Spanish case precedent albeit the specific definition and consequences of the same are analysed by the Courts on a case by case basis.

No, there is no a generally understood and accepted definition. It shall be contractually determined between the parties in the relevant construction agreement when a “concurrent delay” event occurs. In any case, if a concurrent delay event takes place and any of the parties judicially claims its rights before the relevant Court, the judge will discretionally construct the concurrence of faults, the damages caused, the relevant penalties and their moderation (i.e. adjustment), if applicable. By this means concurrent delay is implicitly accounted for. 

The relevant construction agreement shall contain the delay causes attributable to each of the parties and the allocation of risks. Thereafter, in the event of judicial claims, the Court, at its sole discretion will be entitled to construct the agreement and to determine the penalties (and its moderation, if applicable). In this sense, the agreement shall expressly define (i) which delays are attributable to each of the parties; (ii) the possibility or not to extend the term of the works in the event of concurrent delay event and (iii) the costs/penalties applicable in case of fault or delay in the works attributable to each of the parties.  

Under Spanish law, there are no specific general principals applicable to the concurrent delay. Thus, the contractor would not have an automatic extension for any period of concurrent delay. However, it is recommendable to include and duly regulate in the relevant construction agreement the causes and consequences of delays in the handover of any specific works attributable to each of the parties and any possible penalties applicable to the same. Moreover, under Spanish common market practice the following causes may imply an extension of the works term: 

• force majeure events: however, the relevant contract shall duly define which events are considered a “force majeure event”.
• variations requested by the owner which were not included in the initial project.

There is not a legal provision by means of which the contractor is entitled to claim for a compensation in the event of delays. However, when said delays are caused by the owner (either when it is a concurrent delay or not), the contractor will be entitled to judicially claim for a compensation of the damages effectively caused by it.  

Generally, the contract shall clearly define which causes may be considered as an admitted delay and which of the parties shall be liable on each case. However, if a delay occurs, and the parties do not reach an agreement regarding the (i) possible extensions; (ii) compensation applicable or (iii) the party who is liable for said damage, an independent expert clause is usually included in the relevant agreement. In this sense, the agreement usually states that in case of unsolved discrepancy an independent technical expert will determine the relevant damages caused (to be elected between three or four different experts to be appointed by the parties or at random).

It could be included in the agreement but in the event any of the parties file a claim before the relevant Court, the judge may determine that the clause has been included in benefit only of one of the parties, and thus, there is a risk that the judge will declare this clause null and void.

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?

In our understanding, the Contractor is not entitled to get an extension of the term. Note that the works have been already delayed until 25 February (“New Handover Date”) due to a contractor’s default (or, at least, due to an event which risk should be covered by the Contractor). Therefore, to the extent that the variation requested by the developer does not imply an increase of the New Handover Date, we understand that the Contractor may not request an extension of the handover date.

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?

The Contractor is entitled to recover any costs that have risen as consequence of a developer's variation which was not initially included or requested in the works projects. However, if the variation in the above example has not caused any additional delay to completion, the contractor would not be entitled to claim for additional delay cost.