Contracting out of concurrent delay rules – the Court of Appeal view

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North Midland Building v Cyden Homes [201] EWCA 1744 – Court of Appeal

Facts
We reported the 2017 Decision in our newsletters earlier this year. Cyden was the employer on a project to construct a very large country house in Lincolnshire for the Dyson family. North Midland Building was the contractor and the contract was JCT D&B 2005 with a special clause “any delay caused by a relevant event which is concurrent with another delay for which the contractor was responsible shall not be taken into account.”.

The TCC ruled in favour of the employer that this clause was enforceable and not contrary to public policy. The TCC considered this was simply a matter of risk allocation and the risk had been very clearly allocated in the contract. On an appeal to the Court of Appeal this decision was upheld.

Comment

  1. The lawyers for North Midland relied heavily upon the long established “prevention principle”. This is a doctrine which states that where a contractor is delayed by a matter for which the employer was responsible (e.g. denial of access, late instructions, etc) then unless the contract provides a mechanism for the employer to evaluate and give a specific period of time in respect of his default, any contractual mechanism for extension of time and allocation of liquidated damages must necessarily fail as being incomplete. In the Court of Appeal Coulson LJ, had no difficulty in finding that prevention principle was not an overriding rule of public policy, and the plain words of the contract would prevail.
  2. The answer to the question was therefore yes.

For more specialist legal advice contact our Construction & Engineering team.