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Concurrent Delay in Construction Contracts

What is concurrent delay?

The term “concurrent delay” means a situation where a construction project is delayed by two events at
the same time, one being an event for which the employer takes responsibility under the contract and the
other for which the contractor takes responsibility. Under a typical construction contract, the contractor
would claim for an extension of time and possibly damages for delay caused by an employer risk event.
The employer would claim liquidated damages for delay caused by a contractor risk event.

The definition of concurrent delay put forward by John Marrin QC in a paper produced for the Society of
Construction Law in 2002 has been used by the courts and was confirmed in Adyard Abu Dhabi v SD
Marine Services [2011] EWHC 848 (Comm) as a useful working definition:

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

It is generally accepted that the effects of an employer risk event and a contractor risk event must be
simultaneous for a delay to be classified as a concurrent delay. The two separate events do not have to
have occurred at the same time but the delaying effects of the events must occur at the same time. Each
event needs to have caused delay in its own right. A narrow definition of concurrency, also known as
“true” concurrency, used in The Royal Brompton Hospital NHS Trust v Hammond (2001) 76 Con. L.R.
148, where the two events in question should start and finish at the same time, was subsequently
criticised as too narrow.

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Parties free to allocate risk in contract
Construction contracts often do not address the issue of concurrent delay but the parties can set out an
express provision in the contract to deal with this situation. In North Midland Building Ltd v Cyden Homes
Ltd [2017] EWHC 2414 (TCC), the Technology and Construction Court (TCC) clarified that the parties to
a contract are free to allocate the risk of concurrent delay.

In this case, the court upheld a clause that disallowed a contractor's claim for an extension of time in
cases of concurrent delay. The contract was an amended JCT Design and Build Contract, 2005 edition,
which stated that any delay caused by a relevant event (that is an employer risk event) which is
concurrent with another delay for which the contractor is responsible shall not be taken into account when
assessing a claim for an extension of time. The wording was found to be “crystal clear” and the
contractor’s claim that the prevention principle invalidated the clause did not succeed (see below for
analysis of the prevention principle in the context of concurrent delay). The Court of Appeal upheld the
decision of the TCC and concluded that the clause in the contract, that did not allow the contractor an
extension of time in circumstances of concurrent delay, was valid and could not be said to be
uncommercial. It had been agreed by the parties to amend the JCT contract in this regard and place the
benefit of concurrent delay on the employer.

The Malmaison case – contractor granted extension of time

Where there is no provision in the contract to cover concurrent delay, Henry Boot Construction (UK) Ltd v
Malmaison Hotel (Manchester) Ltd [1999] 70 Con. L.R. 32A is a leading case under English law. In this
case, often referred to as the Malmaison case, the contract was the JCT Standard Form of Building
Contract, Private with Quantities, 1980 edition that was not amended to refer to the risk of concurrent
delay. The court granted the contractor an extension of time for the period of delay caused by a relevant
event under clause 25 of the standard form of contract, notwithstanding the concurrent effect of another
delaying event caused by the contractor.

The judge gave an example where 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). 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. The architect cannot refuse to do so on the grounds that the
delay would have occurred in any event by reason of the shortage of labour.

The Malmaison case set out the rationale that, provided one of the concurrent causes of the delay was at
the employer's risk, the contractor will receive a full extension of time for the whole period of delay, even
though the delay was partly caused by an event for which the contractor was responsible. The courts
went on to adopt an approach which has become known as the Malmaison approach whereby, when
determining the delay caused by an employer risk event under a contract, the existence of a contractor
risk event is irrelevant to the assessment of an extension of time entitlement.

In Walter Lilly & Co Ltd v Mackay [2012] EWHC 1773 (TCC), the Malmaison approach was taken and the
judge was of the view that where two or more events caused delay and one of them was a relevant
event, the contractor was entitled to a full extension of time on the terms of the extension of time clause,

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in this case under the JCT Standard Form of Building Contract, Private Without Quantities, 1998 edition.
It was held that the straight contractual interpretation of clause 25 of the contract points very strongly in
favour of the view that, provided that the relevant events can be shown to have delayed the works, the
contractor is entitled to an extension of time for the whole period of delay caused by the relevant events
in question. There was nothing in the wording of clause 25 which expressly suggested that there was any
proviso to the effect that an extension of time should be reduced if the causation criterion was
established.

Time but no money

Although the courts have allowed the contractor an extension of time in circumstances of concurrent
delay, a contractor has not usually been entitled to a payment for loss and expense in respect of an
employer risk event in such circumstances, as set out in the Society of Construction Law Delay and
Disruption Protocol. In claiming for loss and expense caused by the delay, the contractor would find it
hard to satisfy the “but for” test of causation. This general rule was outlined in De Beers UK Ltd (formerly
Diamond Trading Co Ltd) v Atos Origin IT Services UK Ltd [2010] EWHC 3276 (TCC). The contractor is
entitled to an extension of time where delay is caused by the employer because although the contractor
must complete within a reasonable time, he must have a reasonable time within which to complete. It
therefore does not matter if the contractor would have been unable to complete by the contractual
completion date if there had been no breaches of contract by the employer (or other events which entitled
the contractor to an extension of time), because he is entitled to have the time within which to complete
which the contract allows or which the employer's conduct has made reasonably necessary. By contrast,
the contractor cannot recover damages for delay in circumstances where he would have suffered exactly
the same loss as a result of causes within his control or for which he is contractually responsible.

Apportionment
A significantly different approach to resolving the issue of concurrent delay was taken in City Inn Ltd v
Shepherd Construction Ltd [2010] ScotCS CSIH_68, where the Scottish appeal court decided that
apportioning the delay between the parties would be appropriate where there was no dominant cause of
delay. If a dominant cause of delay to completion of the works can be identified and the dominant cause
is a relevant event under the contract then the contractor will be entitled to an extension of time. If there
are two causes of delay which are concurrent and one is a relevant event and the other is an event for
which the contractor is liable, but neither is dominant, then the delay can be apportioned between the two
causes in a fair and reasonable manner by the architect or person responsible for such decisions. If
liquidated damages are payable then this is a factor which should come into the equation. The exercise
of apportionment should be similar to apportionment of liability in cases of contributory negligence and
account should be taken of relative culpability in the causes of delay and the significance of each of the
factors in causing delay. The apportionment approach was justified by the fact that under clause 25 of the
JCT 1980 Standard Form of Building Contract the architect is required to fix such new completion date as
it considers to be “fair and reasonable” in the circumstances.

In the Malmaison case, it was maintained that it was wrong to suggest the architect could not consider
the impact of other events on progress and completion when deciding whether there was a delay caused
by a relevant event. However, in Walter Lilly & Co Ltd v DMW Developments Ltd [2012] EWHC 1773

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(TCC), it was held that the approach of the Scottish Courts in this situation to permit an apportionment of
the relevant period of delay between the parties so as to permit a partial award of an extension of time to
the contractor probably does not reflect the law of England.

The prevention principle

The "prevention principle" provides that no party may require the other to comply with a contractual
obligation in circumstances where that party has itself prevented such compliance.

In the recent case of North Midland Building Ltd v Cyden Homes Ltd [2017] EWHC 2414 (TCC) the
contractor claimed that the wording in the contract, which disallowed an extension of time where there
was concurrent delay, could not be valid due to the prevention principle and therefore time was at large
and any liquidated damages provision void. At first instance, the court confirmed that the prevention
principle does not apply to cases of concurrent delay, citing previous authorities on the point. In Adyard
Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm), the court maintained that the act of
prevention must render it impossible or impractical for the other party to do his work within the stipulated
time. The logic is that such an outcome cannot occur when the contractor is already in culpable delay.
Jerram Falkus Construction Ltd v Fenice Investments Inc [2011] EWHC 1935 (TCC) set out a summary of
the law on prevention and concurrent delay and emphasised that for the prevention principle to apply, the
contractor must demonstrate that the employer's acts or omissions prevented the contractor from
achieving an earlier completion date. If that earlier completion date would not have been achieved
anyway, because of concurrent delays caused by the contractor's own default, the prevention principle
will not apply.

The contractor appealed the decision in North Midland Building Ltd v Cyden Homes Ltd on the grounds
that the prevention principle would apply to negate the concurrent delay clause as a matter of legal policy.
This argument did not succeed as the appeal court stated that the prevention principle is not an
overriding rule of public or legal policy and there is no authority to back this claim. The clause in question
was an agreed term of the contract and there is no suggestion in any previous case that the parties
cannot contract out of some or all of the effects of the prevention principle.

In appealing North Midland Building Ltd v Cyden Homes Ltd, the contractor went on to argue, that if the
relevant clause was found to be enforceable, so that he was not entitled to an extension of time for
concurrent delay, there was an implied term which would prevent the employer in those circumstances
from levying liquidated damages. It would be bizarre if the employer could recover liquidated damages for
a period of delay for which it was responsible. This ground for appeal did not succeed. The extension of
time provisions were inextricably linked to the provisions relating to liquidated damages and there could
be no basis for arguing for a result in respect of liquidated damages that was different to the result in
respect of extensions of time. As the concurrent delay clause was an effective clause, it expressly
permitted the employer to levy liquidated damages for periods of concurrent delay, because it would not
grant the contractor relief against such liability by extending the completion date.

Avoiding disputes on concurrent delay

We have seen a number of disputes on unamended JCT contracts in particular, which do not address
concurrent delay in the contract terms. The standard forms of construction contract used in the UK, such

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as JCT and NEC do not refer to concurrent delay. The new FIDIC 2017 rainbow suite of contracts does
however include a sub-clause on concurrent delay, leaving it to the parties to set out rules and
procedures to cover this situation in the Special Provisions. Although there are a number of common law
principles that have been developed in the English courts to apply in circumstances of concurrent delay, it
can be advisable to address the issue when negotiating a contract rather than risk a dispute if the matter
arises.

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This document (and any information accessed through links in this document) is provided for information purposes only and
does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a
result of the contents of this document.

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