Extensions of time - concurrent delay and Covid-19 from a contractor's perspective

Extensions of time in relation to concurrent delay

Concurrent delay occurs where an Employer risk event and a Contractor risk event both cause delay to the construction project at the same time: 

• The Contractor argues that it is entitled to an EOT in respect of the Employer risk event; and
• The Employer argues that it is entitled to liquidated damages in respect of the contractor risk event.

Who is right? The starting point is the wording of the Contract. However, liability will depend on whether the two risk events started on the same date or whether one preceded the other.

The Society of Construction Law, Delay and Disruption Protocol (2nd ed, 2017) (the SCL Protocol) defines ‘true concurrency’ as follows:

“True concurrent delay is 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. For concurrent delay to exist, each of the Employer Risk Event and the   Contractor Risk Event must be an effective cause of Delay to Completion (i.e. the delays   must both affect the critical path).” 

However, “true concurrent delay” (i.e. where the delay events start and end at exactly the same time) is unusual and as such the SCL Protocol observes that:

"…, a more common usage of the term ‘concurrent delay’ concerns the situation where two or more delay events arise at different times, but the effects of them are felt at the same time."

Numerous case law has considered the meaning of concurrent delay and how it works in practice. In the case of the Royal Brompton Hospital NHS Trust v Hammond (No.7) [2001] EWCA Civ 206, HHJ Seymour QC commented as follows: 

“It is, I think, necessary to be clear what one means by events operating concurrently. It does not mean, in my judgment, a situation in which, work already being delayed, …because the contractor has had difficulty in obtaining sufficient labour, an event occurs which is a relevant event and which, had the contractor not been delayed, would have caused him to be delayed, but which in fact by reason of the existing delay makes no difference. …”

Assuming normal JCT contract wording, where the Employer risk event starts first & then there is a Contractor risk event afterwards and a period of concurrency the Employer risk event is to be regarded as the only effective cause of the delay and therefore the Contractor is entitled to an EOT. In this situation, assuming normal JCT contract wording, there is to be no apportionment between the two events as outlined in the case of Walter Lilly & Co Ltd v Mackay 2012 whereby Akenhead J stated at para 370:

“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.”

Extensions of time in relation to Covid-19

Whilst most standard form construction contracts do not include an express provision entitling the Contractor to an EOT for delays incurred due to the Covid-19 pandemic many entitle the Contractor to an EOT due to events that can encompass those experienced due to Covid-19.

Under the JCT suite of contracts the Contractor is entitled to claim an EOT if a Relevant Event causes delay to the progress of the works. Although such matters are always fact specific the following Relevant Events are often accepted as applying to delays caused by Covid-19 under the JCT Design and Build Contract, 2016 Edition:

• The exercise after the Base Date by the UK Government or any Local or Public Authority of any statutory power that is not occasioned by a default of the Contractor or any Contractor’s Person but which directly affects the execution of the works (clause 2.26.12).
• A Statutory Undertaker carrying out work pursuant to its statutory obligations in relation to the Works, or a failure to carry out such work (clause 2.26.7).
• Force majeure (clause 2.26.14). The JCT does not define what amounts to force
  majeure and as such there has been much debate around whether Covid-19 amounts to a force-majeure event. Dependent on when the parties entered into the contract it may be possible to argue that Covid-19 is a force majeure and as such is a Relevant Event.
• An instruction by the Employer to postpone any work to be executed under the contract (clause 2.26.2.2). This may be relevant where an Employer postpones work because it cannot be carried out in accordance with guidance about safe working practices on site.
• Any impediment, prevention or default by the Employer or any Employer’s Person, except to the extent caused or contributed to by any default of the Contractor or any Contractor’s Person (clause 2.26.6). This may help where an Employer temporarily closes a construction site, changes working hours and methods or otherwise restricts access to the site as a result of guidance about safe working practices on site due to Covid-19.
• Any “Change” instructed by the Employer, defined as including “the imposition by the Employer of any… restrictions in regard to… access to the site… or limitations on working space… or working hours” (clauses 2.26.1 and 5.1.2).
• Any change in the Statutory Requirements after the Base Date that necessitates an alteration or modification to the Works is treated as a Change (clause 2.15.2).

For more information on this article, please contact our Construction & Infrastructure team.