Concurrent Delay – Is The English Court Of Appeal's Clarification Conclusive?

Key Points

The Court of Appeal has held that a clause denying an extension of time to a Contractor if there is concurrent delay is enforceable and is not contrary to the so-called “prevention principle.” The Court of Appeal declined to go further and comment on what the position should be if there is no express term dealing with concurrent delay. On a practical level, Owners will now include in contracts an express term excluding an extension of time if there is concurrency and Contractors will want to define precisely what is meant by “concurrent delay” and steer delay analysis towards methods that undermine findings of concurrent delay. The Court of Appeal's position differs from that in the United States where if there is concurrent delay, the delay is held to be an excusable non-compensable delay entitling the Contractor to only an extension of time and no additional money. In North Midland Building Ltd v Cyden Homes Ltd [2018] EWCA Civ 1744, the Court of Appeal has resolved a key issue that often troubles tribunals in international construction arbitration. The subject of concurrent delay is important on many levels, and the Court of Appeal's decision and supporting analysis will have a tangible impact on how complex construction claims will now be articulated, pleaded, analyzed and decided by tribunals. The Court of Appeal focused on the enforceability of an express term freely negotiated and included in an agreement. Put simply, the clause stated that if there are two delaying events, Event X and Event Y, occurring at the same time and causing concurrent delay to completion of the works, with Event X otherwise entitling the Contractor to an extension of time, and Event Y being “another delay for which the Contractor is responsible”, then the Contractor would not be entitled to an extension of time in respect of those two delaying events. The Court of Appeal held that the clause was enforceable and was not contrary to an overarching principle of law - the so-called “prevention principle”. North Midland Building Ltd v Cyden Homes Ltd provides a long-awaited clarification and an important contribution to the common law. However, the position under U.S. law is different. Put simply, the Owner is not entitled to collect liquidated damages, and the Contractor is not entitled to loss/expense. Instead, where there is concurrent delay, the delay is held to be an excusable non-compensable delay entitling the Contractor to only an extension of time. Although a provision such as the one in North Midland Building Ltd would appear to be against U.S. public policy, it is still an open issue in the United States, as there does not appear to be any reported cases directly on this point.

Practical Effects

The Court of Appeal did not wish to comment on whether a Contractor would also be denied an extension of time where there is concurrent delay but no express term. On a practical level North Midland Building Ltd will encourage Owners to now include in contracts an express term excluding an extension of time if there is concurrency, and this in turn will encourage Contractors to define precisely what is meant byconcurrent and to analyze the precise effect of delay to completion in ways that undermine findings of concurrent delay. It is also likely that...