Burke ... concurrent delay not easily understood.
The finer points of concurrent delays
01 November 2016
STEPHEN BURKE* outlines the recent developments in concurrent delay in the UK which could have an influence on how concurrency is addressed in the region.
Concurrent delay is an issue frequently raised by participants in construction projects in the Gulf. Despite its popularity, it is a concept that is often misunderstood and regularly misapplied.
Part of the reason for this, of course, is the fact that there are competing (and markedly different) definitions of what constitutes concurrent delay in the first place. Two recent developments in the UK together may go some small way towards helping construction professionals in the Gulf successfully address issues of concurrency.
The first of these is a recent decision of the English commercial court, part of which addresses the proper definition of concurrent delay and related principles of causation. In the second development, the Society of Construction Law has issued a draft update to its Delay and Disruption Protocol, which deals with issues of concurrency in rather more detail that the widely used first edition.
The Sage Cruises decision
In the recent case of Saga Cruises BDF Ltd & Anor and Fincantieri SPA, the claimants sought to recover liquidated damages in respect of a delay to the completion of repairs to a cruise ship. The respondent contractor sought to avoid liability for liquidated damages on the grounds of concurrent delay. Specifically, the contractor relied upon a number of employer-culpable causes of delay as the basis for a full extension of time, even though there were also contractor-culpable events of delay during the same period.
The decision of the English commercial court addressed these issues relatively briefly and, unfortunately, without significant legal analysis (most likely because the main focus of the case had been an unrelated defects claim). However, the court did consider a number of earlier English court decisions on the subject of concurrent delay, including the well-known decision of Akenhead J in Walter Lily v Mackay.
Ultimately, the court applied a narrow definition of concurrent delay, which requires causation to be proved as a matter of fact. In order to be entitled to an extension of time, therefore, it was necessary for the contractor to establish that delay events for which the employer was responsible had, in fact, caused critical delay. True concurrency would arise only where both contractor and employer-culpable events were actually the cause of critical delay, and where the delaying effect of the various events was felt at the same time.
On the facts, the court found the contractor was not entitled to an extension of time because the employer-culpable events that were relied upon by the contractor had not actually caused any critical delay. Instead, progress had already been critically delayed by a number of contractor-culpable events by the time that the later employer-culpable events took place. Because of the earlier contractor-culpable delays, there would have been precisely the same amount of critical delay had the later employer-culpable events never happened.
Delay and Disruption Protocol
In a timely coincidence of events, this narrow approach to concurrency finds favour in the draft second edition of the Society of Construction Law’s Delay and Disruption Protocol. This draft is currently the subject of a public consultation process, with a finalised second edition of the Protocol expected imminently.
In a marked departure from the first edition of the Protocol, the draft second edition offers relatively detailed guidance on how to define and deal with concurrent delay. In particular, it compares the competing lines of English authority on the proper definition of concurrent delay, before finally preferring a narrow approach that is very similar to that adopted in the Saga Cruises case. The approach adopted in the draft second edition defines concurrent delay as the presence of two or more delay events, one an employer culpable event and one of contractor culpable event, the effects of which are felt at the same time. It further goes on to stress the need for causation in fact, so that there is no true concurrency where the effects of a particular event of employer-culpable delay occur only after there is already critical delay for which the contractor has responsibility.
What this means in the Gulf
Although neither the Saga Cruises case nor the draft second edition of the Protocol have any direct application in the Gulf, it is certainly possible that each will have indirect effect on the way in which issues of concurrency are addressed in this region.
Perhaps most obviously, this is because of the enormous popularity of the first edition of the Protocol in the Gulf. Although based on English law principles, it is very common to find construction professionals in the Gulf referring to and citing parts of the Protocol as justification for their respective positions. This has meant that the Protocol has been influential in both construction projects and in disputes across the region. There is no obvious reason why the second edition of the Protocol, when finalised, will not continue to have a similar degree of influence.
More fundamentally though, the principles that are applied to define concurrent delay in both the Saga Cruises case and the draft second edition of the Protocol are instantly recognisable under the legal systems of many Gulf states. At its heart, this relatively narrow definition of concurrent delay is founded on basic principles of causation. UAE law (for example) requires a party to prove causation as one of the three elements required to establish contractual liability (the others being breach of contract and loss). In contrast, broader definitions of concurrent delay, such as that advanced by the contractor in the Saga Cruises case, rely on authorities and concepts that are peculiar to English law. This means that they are much less easy to justify under most legal systems in the Gulf.
* Stephen Burke is a partner in the Dubai office of Baker Botts. He specialises in construction arbitration work in the Middle East and beyond.
