International Construction Law Review
PROLONGATION COSTS IN THE FIDIC YELLOW AND GREEN BOOKS: AN ENGLAND AND WALES AND GERMANY ANALYSIS1
Benjamin Hicks
LLB, B Com, M Const Law, Lawyer
I. INTRODUCTION
Prolongation costs (PGCs) are time-related costs suffered by a contractor as a result of a compensable event impacting on the works which lead to critical-path delay to the completion date.2 There are three components:
“The contractor has to demonstrate on a balance of probabilities, that, first, events occurred which entitle it to loss and expense, secondly, that those events caused delay … and thirdly that such delay … caused it to incur loss and/or expense (or loss and damage as the case may be).”3
Ordinarily a compensable event is an Employer Risk Event which may include events such as a variation, breach of contract or other identified provision in the contract such as unforeseen latent conditions.4 The International Federation of Consulting Engineers (FIDIC) contract suite defines “Employer Risk” and provides which are compensable events by expressly providing if entitled to an extension of time (EOT) and additional “Cost Plus Profit” or “Cost”.5
Assuming the contractor can establish a contractual entitlement to a compensable event, there is ordinarily no automatic entitlement to loss or expense in PGCs.6 This is because the contractor may need to meet notice and time bar requirements (condition precedent), substantiate amounts
1 This paper is based on an academic research paper submitted in the M Const Law (International Construction Law LAWS70139) at the University of Melbourne. It is a submission following the valuable feedback of the unit coordinators, Dr Donald Charrett and Ms Sharon Vogel, and editors of the ICLR. The author sends gratitude and thanks to the unit coordinators, Dr Matthew Bell, all staff and presenters during his M Const Law course and the editors of the ICLR. The author can be contacted on ben@hickses.net.au to discuss this article. Please address your email in the subject line – Prolongation Costs in the FIDIC Yellow and Green Books: England and Germany Analysis – ICLR article.
2 Keating on Construction Contracts (11th Edition) paragraph 9-046 (“Keating”).
3 Walter Lilly & Company Ltd v Mackay (QBD (TCC)) [2012] EWHC 1773 (TCC); [2012] BLR 503, paragraph 486 (per Mr Justice Akenhead) (“Walter Lilly”).
4 SCL Delay and Disruption Protocol (2nd Edition, February 2017) 20.3 (“Protocol”).
5 FIDIC Green Book (2nd Edition, 2021) cl 11.1.3 (“Green Book”); FIDIC Yellow Book (2nd Edition, 2017) cl 8.5 (“Yellow Book”).
6 Keating, paragraph 9-048; Costain Ltd v Charles Haswell & Partners Ltd (QBD (TCC)) [2009] EWHC 3140 (TCC); 128 Con LR 154, paragraphs 183–184 (per Richard Fernyhough QC sitting as a Deputy High Court Judge).
Pt 3] Prolongation Costs in The FIDIC Yellow and Green Books
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