International Construction Law Review
CONCURRENT AND SEQUENTIAL CAUSES OF DELAY
PAUL TOBIN
Senior Associate, Clayton Utz, Sydney, Australia 1
Delays to progress and to completion inevitably occur on the majority of building and construction projects. There are a multitude of potential causes of those delays. The risk of bearing the effects of those causes are allocated, under the terms of the contract or at law, between the owner2
and contractor. Factual and legal complexity arises when more than one cause of delay overlaps with, or is concurrent with, another cause of delay. There may also be concurrent effects attributable to delaying events that have arisen at different times.
The difficulties when analysing entitlement to both extensions of time and damages due to numerous overlapping causes and effects of delay have been described by commentators as “conceptually challenging”3
and a problem with “no easy solution”.4
Consideration of this factual and legal complexity is an area of construction law that has continued to develop in the last two decades. In Australia, however, there is still no clear judicial guidance on the principles that govern the correct approach.
This paper seeks to explain the concepts of concurrency of causes and effects of delay. The manner in which the issue is addressed by certain Australian standard form agreements will be discussed as will relevant case law, both in the context of extensions of time and damages for delay. In particular, this paper will outline the various possible approaches for addressing causation of delay damages in concurrency situations.
The purpose of this paper is to propose a preferred approach to be taken in Australia (and in other jurisdictions where the law regarding concurrent delay is uncertain), in the absence of clear and enforceable contractual terms, when determining entitlements for extensions of time and liability for delay damages in circumstances of concurrency. The main submissions of that proposal are:
- (1) It is appropriate to award a contractor a full entitlement to an extension of time in situations of true concurrency.
- (2) Where there are sequential causes of delay with a concurrent effect, entitlement to extensions of time should be assessed by conducting critical path analysis on properly updated programmes with the resulting delay to be apportioned in accordance with the identified causes.
- (3) Failing the ability to separate properly the financial effects of concurrent delay, in certain circumstances apportionment of liability may be an applicable approach in Australia.
I. DEFINING CONCURRENCY
1. True concurrency
As a starting point, it is necessary to consider what is meant by concurrent delay and other related concepts.
The Society of Construction Law Delay and Disruption Protocol (“SCL Protocol”) defines “true concurrent delay” as “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”.5
The SCL Protocol acknowledges that true concurrency will only occur rarely.6
The example given in that document is a situation where, at the commencement date of the contract, the owner fails to grant access to the site but the contractor does not have the resources to mobilise and commence work.
The difficulty in identifying a situation of true concurrency is that the two causes of delay must be independent of each other.7
In practice, however, there may be a causal link between two causes of delay and therefore one cause is dependent on the other. For example, if an owner causes delays to construction of the foundations for a bridge, the contractor may opt to reduce its resources for the construction of the precast concrete elements of the superstructure in the knowledge that its rate of progress can be slower than initially programmed. In such a situation, the contractor’s delay could be considered a side-effect of the owner’s delay rather than a truly concurrent cause.
In the USA decision of MCI Constructors, Inc
8
the Appeals Board rejected the owner’s claim that the contractor should be responsible for concurrent delays. The Board stated:
5 Society of Construction Law, Delay and Disruption Protocol
(2002), para. 1.4.4: http://www.eotprotocol.com.
6 Ibid
. See also Pickavance, op. cit
. n. 3, 623. But see Gerry McCaffrey, “Practical Planning and the SCL Delay and Disruption Protocol—The Devil is in the Detail” (2003) 10 Society of Construction Law EOT Protocol
http://www.eotprotocol.com/pdfs/The%20Devil%20is%20in%20the%20Detail.pdf at 22 October 2006. Mr McCaffrey concludes that the Protocol’s statement that true concurrent delay is a rare occurrence is a “mind boggling statement” and suggests that “there can be several per day”.
7 Pickavance, op. cit
. n. 3, 623.
8 [1996] DCCAB No D–294, 1996 Westlaw 331212.
[2007
The International Construction Law Review
144