Key Takeaways

Project delays are a common theme in both domestic and international construction industries. The approach generally adopted by Australian courts to dealing with concurrent delay (as it relates to extensions of time) leaves much to be desired for contractors and subcontractors.

Key points of interest for construction practitioners include:

• Not all contracts (standard form or bespoke) deal with EOTs and concurrent delay in the same fashion.
• Issuance of notices of all delays and procedural compliance is of paramount importance to protect entitlement for extension of time.
• Accurate forecasting of activities in contemporaneous updates and review of resultant critical path are important factors in establishing the critical path and whether concurrent delays have occurred.

Overview

Under English law, it is generally accepted that when a project suffers from a concurrent delay, the Contractor is entitled to an extension of time¹. As such, the Malmaison approach remains the leading case law authority in England, and its approach to concurrency, at least for the time being. Below is an illustration of the Malmaison approach:

Based on the illustration above, the Contractor would be entitled to an EOT of 30 days. However, the Contractor would only be entitled to 10 days of delay costs.

The Australian approach to concurrent delay differs. The current Australian Courts favour the “first in time” approach, with the effect that delays are not taken to be concurrent where the Contractor risk event:

• arises first;
• causes actual delay to the Contractor; and
• concludes during or after the effects of the qualifying event have ceased².

Based on the illustration above, adopting the ‘first in time’ approach, the Contractor would be entitled to an EOT of 10 days only – as opposed to 30 days under the Malmaison approach. Similarly, the Contractor would be entitled to 10 days of delay costs.

While there is an emerging trend in Australia towards a pragmatic approach, common sense approaches in assessing delays, ultimately the risk on concurrent delay rests with the contractor³.

Therefore, it is imperative that Contractors carefully review the relevant contractual provisions and, more importantly, undertake a more proactive role with programming and contract administration in order to protect themselves.

Notices, Notices, Notices!

Whilst there might be the natural propensity to focus on fostering the relationship between the Contractor and the Principal, do not lose sight of your contractual obligations. As the old adage goes, there is no free lunch in this world. In the famous words of Miguel de Cervantes “Forewarned, forearmed; to be prepared is half the victory.”

In our experience, when a Contractor submits claims for EOT, the usual defence by the Principal is “concurrent delay”. In order to prove the concurrent delay, the Principal typically identifies the secondary critical path driving the Date for Practical Completion. Typically, the delayed activities residing on the secondary critical path are not covered under any Qualifying Cause of Delay.

Consequently, the Principal relies on this potential omission by the Contractor in order to reduce the EOT awarded. Had the Contractor issues notices of delay for all issues identified on site, this certainly would tilt the scales in their favour.

Herein lies the importance of raising notices of delay for all delays, even if they do not cause critical delay to the Date for Completion. By doing so, the Contractor is in a better position to defend itself against instances of concurrent delay, especially when assessed adopting the first in time approach.

Importance of Accurate Progress Updates

Accurate progress updates are essential for defending against a “First in Time” concurrent delay in construction projects or any project involving multiple activities happening simultaneously. Here’s why they matter:

• Tracking Project Timelines: Accurate progress updates help monitor each task, identify critical delays, and determine their cause, preventing unfair blame.
• Clarifying Responsibility: Proper records help resolve disputes over concurrent delays by showing when and why work was held up.
• Supporting Time Extensions (EOT): Documented progress justifies EOT claims by proving delays were due to specific factors and not self-inflicted.
• Managing Critical Path & Float: Progress tracking highlights key delays and how float is used, preventing mismanagement and disputes.
• Proving Concurrency: Clear records distinguish independent delays, helping defend against incorrect claims.
• Avoiding Legal Disputes: Accurate updates serve as evidence in contractual disputes, reducing penalties and litigation risks.

In summary, accurate progress updates not only allow for better project management and decision-making but also serve as essential tools in protecting against unfair claims in the event of concurrent delays. They provide transparency, accountability, and a clear narrative of events that can prove helpful in resolving disputes regarding who was at fault for delays.

Conclusion

In short, if a prudent Contractor signed a Contract which envisages a reduction of EOT in light of the “First in Time” approach to assessing concurrent delay, this will require a pragmatic approach to project planning and contract administration.

Whilst it is favourable to maintain a colloquial relationship with the Principal and the Contractor, it’s better to be forewarned and forearmed. A proactive and common-sense review of progress updates and timely issuance of notices will go a long way to provide some protection of the elusive “First in Time”.

To learn more, please contact the Alex De Abreu or the Calibrate Consulting office at info@calibrateconsultingpl.com.au or +61 9188 7444.

Disclaimer & Copyright

Whilst we take every care to ensure the accuracy of this information at the time of publication, the content is not intended to deal with all aspects of the subject referred to, should not be relied upon and does not constitute advice of any kind. This publication is protected by copyright © 2023 Calibrate Consulting Pty Ltd