Thus, again, with the SCL Protocol definition in mind, concurrent delay will occur only where:
- at least two events occur, with the employer responsible for at least one and the contractor responsible for at least one other;
- those two events cause delay, the effects of which occur at the same time; and
- each delay is critical – and the criticality assessment is carried out taking account of all circumstances and not by assessing one delay in isolation from the other.
This gives rise to three practical points:
• the timing of the events themselves (as distinct from the resulting delays) is technically irrelevant to the determination of concurrent delay. However, the timing of the events is likely to be relevant to the timing of the delays and that in turn is a key criterion;
- it is important to consider the order in which the delays occur because that will have a significant impact on whether there is critical delay; and
- two events cannot each delay the critical path unless the two resulting delays either start at the same time or end at the same time.
Of course, if the SCL Protocol recommended definition is not used, then the above criteria and practical points may not have application.
Demonstrating concurrent delay
To demonstrate critical delay (one of the criterion for concurrent delay where there are two or more relevant events), it is necessary to:
- identify the critical path;
- establish where it has been delayed; and
- determine what events caused these critical delays.
In doing so, a delay analysis is carried out using any number of different methods, each with their own advantages and disadvantages. The use of modern planning technology for applying these methods allows greater precision in a delay analysis. Such an analysis is likely to be more forensic in a disputes context and hence drives a desire for greater precision. However, there tends to be an inherent element of imprecision in a delay analysis because of the practical limitations to the contemporaneous collection of as-built progress data on which that delay analysis is likely to be heavily dependent. For example, a baseline programme might have 10 concrete activities in a particular section of the works. At a particular time during construction when the status of those activities, which are all at different stages of completion, is checked for the purposes of updating the baseline programme, the project controls team member might wrap them up and assess them together at 45 per cent complete. Someone else doing this exercise might conclude those activities collectively are 40 per cent complete. Hence, there can be subjectivity and summarising in the progress data. That progress data will typically be used by the planner in the analysis, as supplemented by other contemporaneous clarifying records (most common methods make use of the as-built progress data in some form). So, if there is imprecision in, there will be imprecision out.
Given the above, it is naive to expect that a delay analysis will always permit precision down to the day when a delay starts and ends. Hence, there needs to be some calibration regarding the tolerance for imprecision within the delay analysis. For example, in a major project with tens of thousands of scheduled activities, the tolerance for imprecision might be 1–2 weeks. Thus, if the second delay under consideration from a concurrent delay assessment perspective commenced within three days of the first delay (and is shown in the delay analysis to impact a very near critical path), it would be sensible to conclude that the two paths are co-critical and so each event caused critical delay at the same time and hence are concurrent. This calibration exercise is part of ensuring that the conclusions of a delay analysis are sound from an industry and common sense perspective.
Burden of proof
There is often a question around who bears the burden of proof when it comes to concurrent delay. In answering that question, it is relevant to first consider the relevant evidentiary principles. In both civil law and common law jurisdictions, the party that raises a positive case bears the burden of proving that case (although the standard at which this burden is met differs between jurisdictions). Applying this principle to the question of concurrent delay, whichever party raised concurrent delay as their positive case bears the burden of proving that case. Often that is the employer, given they commonly raise concurrent contractor culpability in defending the contractor's claim for prolongation compensation. However, as a matter of practice, the factual circumstances underpinning a concurrent delay case are often addressed by the claimant, which is frequently the contractor, because they will present a delay analysis to support their claims and good practice requires that that delay analysis accounts for all relevant factual circumstances, including any other delay events asserted by the respondent.
Arbitral tribunals, whether seated in civil or common law jurisdictions, tend to take a pragmatic approach to the assessment of the evidence. Nonetheless, it is worth the parties bearing in mind whether any strategic mileage can be gained from burden of proof issues where the party asserting concurrent delay fails to put forward a robust delay analysis to support that case.
Liability where there is concurrent delay
There is much conflicting commentary and case law concerning concurrent delay. As a result, it is difficult to unequivocally state the position likely to be adopted at law in the common and civil law jurisdictions discussed below. However, liability for concurrent delay is often approached in one of two ways:
- the contractor is awarded an extension of time for the period of concurrent delay (thereby extinguishing the employer's right to liquidated damages for that period) but not prolongation costs; or
- an exercise of apportioning liability between the parties is conducted so that the contractor receives a partial extension of time and some prolongation costs, and the employer is entitled to some liquidated damages.
These approaches of 'time but not money' and apportionment respectively have been adopted to different extents dependent upon jurisdiction. Set out below is a summary of how concurrent delay is treated across a number of common and civil law jurisdictions.
Common law jurisdictions
There is no uniform treatment of concurrent delay under the common law, and both the 'time but not money' and apportionment approaches have been endorsed by courts in different jurisdictions. The judicial precedent that exists in at least some common law jurisdictions, however, provides a relatively stable platform from which to assess the likely approach to be adopted in the treatment of concurrent delay.
England and Wales
The genesis of judicial authority for the treatment of concurrent delay in England and Wales is often cited to be the Malmaison case. This case concerned a contractor's claim for an extension of time under the JCT 1980 Conditions (Private Edition with Quantities); part of a set of standard form contracts commonly used in the United Kingdom. The issue of concurrent delay arose, and the approach of how any concurrency (if it existed) ought to be treated was agreed between the parties, as recorded in the judgment:
It is agreed that if there are two concurrent causes of delay, one of which is a relevant event, and the other is not, then the contractor is entitled to an extension of time for the period of delay caused by the relevant event notwithstanding the concurrent effect of the other event.
Despite no judicial consideration or decision on the treatment of concurrent delay in the Malmaison case, this agreed approach (i.e., an extension of time for the full period of concurrency) has been subsequently adopted as English law, often with reliance on the Malmaison case. The rationale for this approach, which was accepted by the English court in the case of Steria v. Sigma Wireless, is described by commentators as follows:
[…] it now appears to be accepted that a contractor is entitled to an extension of time notwithstanding the matter relied upon by the contractor is not the dominant cause of delay, provided only that it has at least equal 'causative potency' with all other matters causing delay. The rationale for such an approach is that where the parties have expressly provided in their contract for an extension of time caused by certain events, the parties must be taken to have contemplated that there could be more than one effective cause of delay (one of which would not qualify for an extension of time) but nevertheless by their express words agreed that in such circumstances the contractor is entitled to an extension of time for an effective cause of delay falling within the relevant contractual provision.
In addition to this rationale, John Marrin QC notes that the Malmaison approach has the following notable features:
- It respects the prevention principle. This is a common law doctrine which provides that 'a promisee cannot insist upon the performance of an obligation which he has prevented the promisor from performing'. This would arguably be contravened if the contractor were not awarded an extension of time for a delay (effectively) caused the employer.
- It prevents inconsistent cross-claims for prolongation costs and liquidated damages.
- It represents an appropriate relaxation of the 'but for' test of causation, which had been criticised for permitting the (absurd) possibility that where multiple events caused delay to the critical path, none of those events would be found to be the putative cause of the delay.
Case law subsequent to the Malmaison case and Steria v. Sigma Wireless, however, disagrees on the first point. In North Midland Building Ltd v. Cyden Homes Ltd, the English Court of Appeal stated 'the prevention principle has no obvious connection with the separate issues that may arise from concurrent delay'.
An alternative approach, that some commentators have argued may exist under English law, is that apportionment is carried out in respect of the relevant delay events. However, this was firmly rejected by the English court in the first instance decision of Walter Lilly v. Mackay:
In any event, I am clearly of the view that, where there is an extension of time clause such as that agreed upon in this case and where delay is caused by two or more effective causes, one of which entitles the Contractor to an extension of time as being a Relevant Event, the Contractor is entitled to a full extension of time. […] The fact that the Architect has to award a 'fair and reasonable' extension does not imply that there should be some apportionment in the case of concurrent delays. The test is primarily a causation one.
As a matter of English law, therefore, it appears that a contractor may be entitled to an extension of time for the full period of any concurrent delay, barring any contrary contractual provision. However, that 'is not entirely free from doubt'. The English Court of Appeal recently recognised that there is a 'potential difference of opinion' in the case law on whether the contractor can demonstrate that the employer delay event 'caused' the critical delay, a prerequisite for an extension of time, where there is concurrent delay.
There is less judicial authority regarding the treatment of a contractor's prolongation costs claims when there is concurrent delay. The SCL Protocol suggests that, for periods of concurrency, a contractor is not entitled to recover prolongation costs, except to the extent that it can separately account for the costs of the employer delay event that would not have otherwise been incurred as a result of the contractor delay event. In other words, a contractor cannot recover prolongation compensation in circumstances where it would have suffered the same loss as a result of causes within its control or contractual responsibility. The English courts have recognised this approach as the 'general rule in construction and engineering cases'.
In summary, therefore, where there is concurrent delay, the position under English law is that a contractor should not recover prolongation compensation and, it appears, that an employer should not recover liquidated damages (although the latter is not without doubt). This difference between the approach on time and money might be explained on the basis that the 'but for' test of legal causation has not been made out when considered through the prism of a claim for the monetary consequences of delay: Where there is concurrent delay, the employer cannot, on a liquidated damages claim, demonstrate that the legal cause of the delay was the contractor given the employer itself was also an effective cause of the delay as a matter of fact. Similarly, the contractor cannot demonstrate, on a prolongation compensation claim, that the legal cause of the delay was the employer given the contractor itself was also an effective cause of the delay. If the employer cannot recover liquidated damages for the period when it was an effective cause of the delay, the contractor is essentially securing an extension of time, thereby achieving the outcome of 'time but not money' for the contractor.
The Scottish approach to concurrency represents a marked contrast to the English approach, in that the courts apportion liability as between the relevant events where there is concurrent delay. This approach was first advanced in John Doyle Construction v. Laing Management, where the court determined that apportionment may be appropriate in cases of concurrency based on the evidence and when carried out on a basis that is reasonable in all the circumstances.
The jurisprudence was further developed in City Inn v. Shepherd, where the court endorsed this approach so that, where two causes are operative, the decision-maker may apportion the period of concurrent delay between the relevant contractor event and the employer event. This decision was upheld on appeal:
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 relevant event and the other event. In that connection, it must be recognised that the background to the decision making, in particular, the possibility of a claim for liquidated damages, as opposed to one for extension of time, must be borne in mind and approached in a fair and reasonable manner.
The Scottish approach of apportioning responsibility for concurrent delay adopts a rationale similar to the apportionment of liability for contributory negligence; that is, based on considerations of culpability and causative potency.
The American discourse on delay tends to focus on whether delays are excusable and, if so, compensable. An excusable delay is one for which the contractor is entitled to an extension of time, and where excusable delays also entitle the contractor to prolongation costs, these delays are also considered compensable. As a general proposition, concurrent delay is considered to be excusable but non-compensable in the United States, meaning that the contractor is entitled to an extension of time for the full period (thereby extinguishing the employer's entitlement to liquidated damages), but is not entitled to prolongation costs.
Essentially this is a 'time but not money' approach and neither party can benefit monetarily from periods of concurrent delay. The courts do not tend to engage in apportionment between the different delay events unless the delays are linear in nature and factually lend themselves to apportionment. Concurrent delay has been described by commentators in the United States as a risk allocation principle to distribute the costs associated with contemporaneous delays on a status quo basis – with each responsible party bearing its own costs for periods of concurrent delay.
The Canadian position in relation to concurrent delay may be described as a hybrid time-and-cost approach. The contractor will be entitled to an extension of time for the full period of concurrent delay, thereby extinguishing an employer's entitlement to liquidated damages. As to prolongation costs, there is a lower evidentiary threshold borne by the contractor in identifying the costs attributable to the employer delay event, rather than costs that would have been incurred anyway. As a result, there is likely to be 'an almost indistinguishable exercise of apportionment' when it comes to prolongation costs. One of the rationales for this approach is an extension of the concept of 'contributory negligence' to contractual claims, which some commentators suggest is evident in the decisions of courts in certain provinces.
Also relevant to the treatment of concurrent delay in Canada is that the courts exercise a flexible discretion and apply a 'broad brush' or 'do the best it can' approach when it comes to assessing quantum. The upshot of this is that where concurrent delay arises, the contractor will be entitled to an extension of time for the full period and, likely, may recover some of its prolongation costs.
Concurrent delay is not well-defined in Hong Kong jurisprudence, although the English approach has traditionally been favoured by commentators. Having said that, the apportionment approach in the Scottish case of City Inn Limited v. Shepherd was expressly endorsed by the Hong Kong court in the first instance decision of W Hing Construction Co Ltd v. Boost Investments Ltd.
The legal position in Singapore traditionally draws on Commonwealth case law, particularly that of England and Wales, yet there has been no clear indication through local case law of the general approach adopted by the Singapore courts. However, in a local case where concurrent delay was held to have occurred, the court awarded the contractor an extension of time but, in doing so, did not define concurrent delay or rely on any Commonwealth jurisprudence.
Commentators suggest that the position under Australian law reflects that under English law, although the Australian courts adopt a 'common sense' approach to causation (rather than endorsing the 'effective cause' or 'but for' tests) and there have been a couple of diverging cases addressing how concurrent delay ought to be treated. Many Australian standard form contracts expressly deal with concurrent delay – and do so in a manner different from the English approach. For those contracts, it is unnecessary to have regard to the position at law. Instead, the contractual position prevails. This is perhaps one of the main reasons why Australia does not have a wealth of jurisprudence unequivocally expressing the position at law.
Civil law and shariah jurisdictions
In contrast to the common law approach, civil codes tend to adopt a more flexible approach to causation, known as the 'adequate cause' theory. Coupled with the lack of case law precedent rules in common law jurisdictions, civil law courts have a much greater discretion in determining how concurrent delay ought to be treated. As most civil codes do not expressly address the concept of concurrent delay and there is limited jurisprudence on the topic in many civil law jurisdictions, it is difficult to discern a defined approach to concurrent delay.
Against this backdrop, the 'time but not money' approach could be pursued on the basis of general good faith principles thereby facilitating an argument that the parties cannot have intended for the employer to receive liquidated damages for delay periods caused (at least concurrently) by its own acts. Alternatively, apportionment of liability may be considered more consistent with express civil code provisions relating to the allocation of liability for contributory fault and general principles of fairness. Civil law jurisdictions therefore provide a challenging and uncertain context within which to advance arguments regarding the treatment of concurrent delay and much will turn on the specific facts of each case.
There is no clearly prescribed position for dealing with concurrent delay under Swiss law (and it is unusual for Swiss construction contracts to expressly grapple with this issue). That said, commentators suggest that the Swiss courts may have a tendency to follow the 'time but not money' approach, although this will turn on the circumstances of the case. It is possible to argue that apportionment should apply, on the basis of general contractual legal principles applicable to the reduction of damages and the general apportionment of liability under Article 44(1) of the Swiss Code of Obligations.
It is not clear how the German courts might address concurrent delay as the concept is not expressly dealt with in the German Civil Code (BGB). Commentators suggest that the contractor will be entitled to an extension of time for the full period of concurrent delay (or 'parallel hindrances'). On the question of prolongation costs, the courts have a broad discretion ('free discretion' or 'free belief') when assessing quantum pursuant to Section 287 of the BGB. Regardless, commentators suggest that German courts are unlikely to award prolongation costs to the contractor for periods of concurrent delay. However, like other civil law jurisdictions, arguments can be made for the apportionment of liability between the parties on the basis of the principle of contributory fault (articulated in Section 254 of the BGB).
Similar to Switzerland and Germany, the French Civil Code does not address concurrent delay and there is no uniformly accepted view among practitioners regarding the treatment of concurrent delay. It is possible that the French courts would apportion liability as between the employer and the contractor delay events. This approach would be premised on:
- the requirement of good faith in the performance of contractual obligations; and
- the principle of full compensation, enshrined in Article 1231-2 of the French Civil Code, whereby a party is 'compensated for the loss he has suffered – no more and no less – and for the gain of which he has been deprived'.
The Turkish Code of Obligation applies to construction contracts, but makes no explicit reference to concurrent delay. However, given that the Turkish Code of Obligations is modelled on the Swiss Code of Obligations, Swiss jurisprudence and commentary are persuasive in Turkey.
As noted above though, there is a paucity of guidance from Switzerland but nonetheless the same leaning towards a 'time but not money' approach may be accepted under Turkish law. Like Switzerland, there are arguments available for apportionment under the Turkish Code of Obligations based on the following articles:
Article 51(1): the judge determines the nature and the amount of the compensation taking particular account of the degree of fault; and
Article 52: regarding the reduction of damages: '[w]here the injured person consented to the action which caused the damage or circumstances attributable to him helped give rise to or compound the damage or otherwise exacerbated the position of the person liable for it, the judge may reduce the compensation due or even dispense with it entirely.'
The Egyptian Civil Code does not expressly address concurrent delay and there is no judicial authority or persuasive commentary on this topic. Like French law, the Egyptian Civil Code emphasises the importance of observing good faith in carrying out contractual obligations, which may support an argument for an extension of time for full periods of concurrent delay. An argument for apportionment, in contrast, could be developed based on the principle of 'full compensation', along with Article 216 of the Egyptian Civil Code, pursuant to which the judge retains a discretionary power to either reduce or refuse to award any damages to the injured party if it had contributed, through its own fault, to the occurrence or increase of the harm.
In relation to liquidated damages, where there is concurrent delay, contractually specified damages may be reduced under Egyptian law if the judge is satisfied that:
• the agreed amount is 'greatly exaggerated' in comparison to the actual harm sustained by the creditor (the employer); or
• the original obligation has been partially performed.
A contractor may succeed in denying an employer's claim for liquidated damages altogether if it is able to prove that the employer suffered no harm as a result of the contractor's breach. A contractor could rely on these provisions to argue that it ought not be liable for liquidated damages for periods of concurrent delay, given the employer was itself responsible for the event causing delay.
United Arab Emirates
The United Arab Emirates Civil Code is largely inspired by the Civil Code of Egypt, and, similarly to the position in Egypt, the concept of concurrent delay is not expressly provided for in the United Arab Emirates Civil Code. From a contractual perspective, there is no objection, on grounds of United Arab Emirates public policy, for parties to address concurrent delay in their contract. This is consistent with the general principle that contracting parties are free to allocate risk and adjust the default rules of contractual liability provided they do not exclude or otherwise limit liability for fraud or gross negligence. Notwithstanding, concurrent delay is rarely dealt with in contracts performed in the United Arab Emirates as a matter of practice.
An argument for apportionment could be made based on the following United Arab Emirates Civil Code provisions:
- Article 290 (which is found in the tort section of the United Arab Emirates Civil Code but has been determined to have application in the context of a contractual claim): if the employer contributes to the occurrence of the harm, the judge may take into account the level of involvement of the injured party when assessing compensation, and may reduce or deny compensation in accordance with the degree of its contribution;
- Article 246(1): enshrining the duty of good faith in the performance of a contract; and
- Article 106: sets out the criteria for the unlawful exercise of a right.
However, equally, an argument in favour of an extension of time for the full period of concurrent delay can be developed based on the very same provisions of the United Arab Emirates Civil Code.
It is also worth noting that, on the question of liquidated damages, the United Arab Emirates courts retain a power to revise contractually specified damages upward or downward pursuant to Article 390(2) of the United Arab Emirates Civil Code. The court has full discretion to ensure that compensation reflects actual losses, and this provision may be relied on to adjust the liquidated damages downward where there is concurrent delay.
Again, there is no provision for concurrent delay in the Qatari Civil Code. As the Qatari Civil Code is closely aligned with its Egyptian counterpart, the same arguments available in Egypt and the United Arab Emirates for the treatment of concurrent delay are likely to be persuasive in Qatar. For instance, Article 257 of the Qatari Civil Code regarding reduction of compensation due to the claimant's contribution to harm is almost identical to Article 216 of the Egyptian Civil Code, referred to above. Similarly, the provisions on liquidated damages in the Egyptian Civil Code have been reproduced almost verbatim in the Qatari Civil Code.
The Kingdom of Saudi Arabia is one of few countries to embrace a legal system derived almost solely from the Islamic shariah. Saudi Arabia has not promulgated a civil code, and there are no codified rules in other laws that address concurrency in Saudi Arabia. Analyses of contractual obligations are therefore usually made by reference to general principles derived from the Quran and the Sunnah (teachings) of the Prophet.
Where there is a breach by the aggrieved party's counterparty but the aggrieved party participated in the breach, prevailing opinion in Saudi Arabia is that the breaching party is relieved from liability. This is a general rule based on the assumption that the aggrieved party's conduct makes it impossible for the breaching party to perform its obligations. This type of reasoning could be applied in cases of concurrency, leading to an apportionment of time and money. However, arguments could also be made for alternative outcomes, such as an extension of time for the full period of concurrent delay on the basis of good faith principles. The treatment of concurrent delay in Saudi Arabia will therefore be highly context- and fact-specific.
It is rare that two events will both cause critical delay, and as a result, the circumstances in which concurrent delay arises are narrow. Yet despite this reality, project participants routinely allege that concurrent delay is a live issue worthy of instructing scheduling experts and engaging in lengthy claims processes. Even if, after all of that arguing, there is a rare situation where concurrent delay is found to exist, the only certainty that is then available for project participants is that there is limited (and sometimes scarce) legal authority across any one jurisdiction that unambiguously explains how concurrent delay should be treated. In fact, the position seems to vary wildly across jurisdictions. This has been recognised in the most recent FIDIC suite of standard form contracts, where the topic of concurrent delay is now expressly recognised, but left to the parties to regulate through the special provisions, given there is no international industry norm. It is also because of the rich opportunity for debate afforded by the topic of concurrent delay that there is an increasing trend in major projects to include express contractual language defining concurrent delay and explaining how it will be treated. Clarity through contractual drafting would be a welcome development to avoid the ubiquitous concurrent delay debate.