Contractual allocation of responsibility for concurrent delay

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North Midland Building v Cyden Homes [2018] EWCACIV1744 Court of Appeal

Facts

We reported on the first instance decision last year, (a massive project to build the Dyson family mansion), when the TCC ruled that the employer was entitled to insert a clause into a JCT form providing that, when assessing an extension of time, any delay caused by a Relevant Event which is concurrent with a delay for which the contractor is responsible shall not be taken into account.

Held

The meaning of this clause was clear, the parties had freely entered into the contract, the contractor could not now complain about the agreed risk allocation.  The contractor had clearly accepted the risk that he might be delayed by the employer, and could not challenge the issue of the wording.

Comment

  1. Generally agreed definition of “concurrency” is a period of project overrun caused by two of more effective causes of delay which are of approximately equal cause of potency. In other words, the delay does not have to be exactly at precisely concurrent, more concurrent in a common sense way.
  2. Generally following Henry Boot v Malmaison Hotel, the effect of concurrent causes of delay is that the contractor gets an extension of time which protects him from liquidated damages, but he gets no payment for his preliminary costs and loss of expense caused by that delay.
  3. In this case, the employer was not seeking to make the contractor responsible for all acts of prevention by the employer, only for those which coincided with equally effective and equally causative acts of delay by the contractor. The parties had expressly agreed a risk allocation whereby the contractor accepted that if he had delayed the contract, then he was responsible for that delay period, even if there was a concurrent cause of delay which was the responsibility of the employer.
  4. North Midland’s main argument was that letting an employer avoid the consequences of result and delay was somehow contrary to public policy, or that there was an overriding “prevention principle” which forced employers to accept responsibility in all cases for their own acts preventing progress on the works. The court refused to find any such public policy or any such overriding obligation.

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