Concurrent delay: a back-to-basics approach

Mischa Balen, barrister at Atkin Chambers, explores the court’s approach to concurrent delay in Saga Cruises BDF Ltd v Fincantieri SpA [2016] EWHC 1875 (Comm), 167 ConLR 29. In his view, the decision sees the application of the orthodox rules of causation, and there is an important distinction between one-off and continuing events.

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Background

This summer’s decision in Saga adopts a welcome back-to-basics approach to questions of concurrent delay. (The court also made some findings/observations concerning causation, contributory negligence, third party losses and liquidated damages – for more on those see LexisPSL’s case analysis of 9 August 2016.)

Saga was a case where the court had to consider the ‘concurrent effect of sequential delay events’, to borrow a phrase from the Society of Construction Law’s Delay and Disruption Protocol, in order to determine whether the employer was entitled to levy liquidated damages. The contractor submitted that because the project had been delayed by two causes, one of which was the employer’s fault and one of which was the contractor’s fault, the employer could not levy liquidated damages. The employer submitted that the project was already delayed by events which were the contractor’s fault and that the employer’s failings did not therefore actually affect the project’s completion date. As such, it should be entitled to levy liquidated damages when the contractor missed this date.

Sara Cockerill QC in the Commercial Court held for the employer, reasoning that: “unless there is a concurrency actually affecting the completion date as then scheduled the contractor cannot claim the benefit of it. Causation in fact must be proved based on the situation at the time as regards delay.

The application of orthodox rules of causation 

This is an application of the orthodox rules of causation. Delay must actually affect the completion date in order to count as relevant delay. This means there is an important distinction between ‘one-off’ and ‘continuing’ events so far as concurrent delay is concerned. If a one-off event, such as an employer’s instruction, causes delay to a project, and a second event causes delay while the effects of the employer’s instruction are still being felt, the delay is caused by the first event.

The second event does not actually affect the project and must be dismissed. However, if a continuing event, such as inclement weather, causes delay to a project, and a second event (say, shortage of labour) causes further delay while the effects of the inclement weather are still being felt, the delay is caused by both events, because, in this scenario, both events actually affect the project.

To illustrate this, imagine a wooden house situated half-way between forest A and forest B. Two fires are started, one in forest A and the other in forest B.
Now consider the following three scenarios:

  • The fire in forest A rips through the trees and destroys the house. By the time the flames from the fire in forest B reach the house, it is nothing more than a charred wreck.
  • The fire in forest A and the fire in forest B both reach the house at the same time and burn it to the ground.
  • The fire in forest A reaches the house first and destroys a third of the house. The fire in forest B then reaches the house and a short while later the house burns to the ground.

In the first scenario, the fire in forest B does not cause the house to burn down. The cause of the house burning down is the fire in forest A. This is similar to the delay in Saga: the employer’s actions did not actually delay the project; the project had already been delayed by the contractor.

In the second and third scenarios, both fires actually cause the house to burn down. Both are therefore relevant events for our causation analysis. Yet if we apply the traditional but-for test of causation we must conclude that neither fire caused the house to burn down (‘but for’ the fire in forest A, the house would still have burnt down due to the fire in forest B, and vice versa). The cause of the house burning down is ‘over-determined’, which is to say that the outcome has more than one cause, each of which would have been sufficient to create the outcome on its own. This is similar to my continuing event example above: the project is actually delayed both as a result of the inclement weather and the shortage of labour, and would have been delayed by either event even if the other had not occurred.

My view is that the problem of concurrent delay only arises in cases of over-determination, where two delay events cause actual, as opposed to potential delay to a project. This was not the case on the facts in Saga because the employer’s actions had no effect on the project’s completion date. They did not cause any actual delay to the project.

The starting point in any extension of time claim will usually be the parties’ choice of wording. Unusually, the contract in Saga did not contain a provision allowing the employer to grant the contractor an extension of time in the event of any act of prevention by the employer. But the various standard forms of contract offer little in the way of guidance. The JCT forms of contract, for example, oblige the employer to grant a ‘fair and reasonable’ extension to the completion date. Perhaps Saga represents a return to orthodoxy: if a contractor wants an extension of time, it must prove that the delay event which entitles it to an extension under the provisions of the contract has actually caused delay to the project.

For more information on concurrent delay, see Practice Note: Concurrent delay.

Filed Under: Construction

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