Concurrent delay in construction projects: An ongoing conundrum

Ask any experienced construction professional and they will tell you that delay is likely to be a feature of even the very best run project.

The usual stick which an employer/developer will have to secure timely completion will be the imposition on the contractor of liquidated damages at a particular rate per day/week/month for the period of delay. The imposition of liquidated damages works well where blame for the delay can fairly and squarely be laid at the contractor’s door. However, if the fault lies with the employer/developer, as a matter of law he can neither insist on the specified completion date (insofar as he has prevented completion), nor can he levy liquidated damages. Most construction contracts therefore incorporate detailed extension of time provisions, allowing the completion date to be extended where the existence of delay has not been caused by the contractor.

The position where both the contractor and the employer/developer are responsible for delays, occurring in the same period of time, is called ‘concurrent delay’. It has been the subject of legal debate for a number of years. The generally accepted principle in this situation follows the judgment of the court in a case named Henry Boot Construction Ltd v Malmaison Hotel (Manchester) Ltd – that the contractor is entitled to an extension of time (notwithstanding its own fault), and is not liable to the deduction of liquidated damages. It is not however entitled to recover its time-related costs.

Whilst the position seems clear, there remains an issue (discussed in the recent case of Saga Cruises BDF Ltd v Fincantieri SpA) as to what is actually meant by ‘concurrency’. The courts have found that there is only concurrency if both events cause delay to the progress of the works and the delaying effect of the two events is felt at the same time. In summary, the act relied upon must actually prevent the contractor from carrying out the works within the contract period, or, in other words, must cause some delay. If the contractor is unable to establish this, he is unlikely to obtain an extension of time notwithstanding the Malmaison principle.