This article examines challenges in defining ‘concurrent delay’ and how this makes assessment of extension of time and financial compensation particularly tricky and complicated. This is significant because it determines whether the contractor is entitled to any extension of time and financial compensation if both parties are simultaneously culpable for delays to project completion. This article is of relevance to those who are advancing, defending or even assessing construction claims involving concurrent delay as it underscores the complexity in grappling with both construction programme and construction contract. As there is no universal definition of what amounts to ‘concurrent delay’, it is rather surprising to find that most standard forms of construction contract do not include a specific contractual definition for it as well. In the absence of clear definition, most contract forms do not have a prescriptive approach in resolving concurrent delay. Whilst there are various case precedents under common law that involved a variety of approaches, there is no ‘settled position’ yet at least in Singapore.

In general, concurrent delay is perceived as delay caused simultaneously by both the Employer and contractor. In other words, the term ‘concurrent’ typically refers to the delaying events as opposed to the delaying effects of the said events. So what is the difference between delaying event and its ‘delaying effects’? By way of illustration, if the Employer delays in its issuance of design detail confirmation to the contractor by ten days, the delay to project schedule may not cease immediately by the end of the 10th day. The design detail may include materials that have longer lead time/ delivery time than what was originally anticipated resulting in delaying effects exceeding the duration of delaying event. By way of further example, if the contractor completed its works ten days later than originally planned resulting in missing the ‘window’ for statutory inspections, the works could not be certified as practically completed until the next appointment for statutory inspection. This may result in delaying effects lasting longer than the duration of delaying event. Given the realities above, there is an increase recognition in the industry that the ‘concurrent’ ought to refer to the delaying effects rather than the delaying event e.g Society of Construction Law (SCL) Delay And Disruption Protocol (2nd Edition, July 2017). It is therefore crucial that parties agree on what exactly is ‘concurrent delay’ as there is no advantage to either party in case of ambiguity. This issue will be examined in further detail in the next section of this article.

At present, there are at least three approaches to assessment of concurrent delay. Since the ‘correct’ approach is not established at least from a legal perspective, parties may be well served to be conversant with all these approaches so as to appreciate the intricacies with the assessment process. If and when parties are able to agree on a method of assessment, this should be included in the wordings of the contract as particular conditions. For reasons that will be elaborated in one of the sections of this article, it will be evident that most contract forms adopt a very ‘light touch’ on the issue of concurrent delay. This presumes that parties shall proactively negotiate and agree on the necessary details including any consequential amendments.

What Is Concurrent Delay?

As alluded to earlier, concurrent delay arises when both the Employer and contractor are simultaneously in culpable delay. The concurrency typically relates to the delaying effect of the event rather than the duration of the delaying event, although parties are free to agree on its actual definition under their contract. This distinction is crucial when the delaying effect may exceed the duration of the delaying event using the examples highlighted earlier. Whilst it is fair to say that all delaying events have delaying effects, not all delaying events can be considered in the assessment of concurrent delay. Concurrent delay has to be critical in that it only include those events that actually delays project completion and not merely delay to certain activities in the programme. Therefore the term ‘delay’ in concurrent delay refers only to delay to project completion. In other words, the delaying events shall be on the critical path of the project i.e. the longest path of the programme leading to project completion. By way of illustration, if the Employer’s delay occurs on critical path whilst the contractor simultaneously delay on the programme’s ‘float’, there is no issue of concurrency as only the Employer is in culpable delay. This is because the contractor’s delay on float could not affect the project completion at the material time. Therefore just because the delaying effects are simultaneously felt in the programme due to culpability of both parties, it may not amount to concurrent delay per se. 

It is also important to note that whether or not certain event is on the programme’s critical path is a question of fact and therefore is dependent on factual evidence. Very often project programme gets revised and the critical path changes accordingly. The revision in programme may be due to various reasons e.g. (1) amendment to workflow so as to adapt to circumstances on site, (2) update to programme based on actual progress of works accomplished (3) direction by the contract administrator for the contractor to demonstrate how it is able to achieve timely completion. Contemporaneous programmes are different versions of programme during the project duration. It provides insightful snapshots of the programme’s criticality over the passage of time. As a rule of thumb, the availability of regularly updated contemporaneous programme provides factual evidence of the critical path at the material time. In this regard, the party claiming the occurrence of concurrent delay has to demonstrate the criticality of the events concerned which in turn need to rely on contemporaneous programme at the material time. The lack of contemporaneous programme can be an obstacle in demonstrating concurrent delay. Any attempt to ‘simulate’ concurrency by reliance on extrapolation of baseline programme can often be criticised as being theoretical. If there is any alleged concurrent delay at the initial phase of the project, the absence of contemporaneous programme would almost be detrimental since the initial critical path would most likely be superseded. A clear definition of concurrent delay that is in sync with an appropriate programme contract provisions are essential to effectively managing concurrent delay.

Where the contractor’s delay and the Employer’s delay partially overlap, can such circumstance still be considered concurrent delay? In other words should the delaying effects of those events need to commence and complete exactly at the same time in order to ‘qualify’ as concurrent delay? This seemingly straightforward question can be complex because it involves the determination of what is the effective cause of delay. The following example may better illustrate this point. Let us assume a project’s original practical completion date is 1 January 2026. The contractor’s delay caused schedule overrun pushing completion date to 15 February 2026. The Employer simultaneously arranged for instruction for design changes resulting in delay from 1 January 2026 to 15 January 2026. In other words, the Employer’s delay and the contractor’s delay are not completely identical in its effect although there is a period of overlap. The Employer may argue that its contribution of delay was inconsequential since the project would have been delayed even in the absence of its design changes. On the other hand, the contractor may counter argue that it should at least be granted extension of time for the period of delay caused by the Employer since the Employer should not be able to recover liquidated damages for the duration within which it has prevented the contractor from fulfilling its contractual obligation. In other words, the Employer should not be granted a ‘blank cheque’ to effect its design changes without consequences as soon as it believes that the contractor is in the realm of culpable delay. This debate begs the question of what was the effective cause of delay? If it is determined that only the contractor’s delay was the effective cause of delay, due to the fact that its delaying effect is longer than the Employer’s delay, i.e. only the contractor’s delay is critical, then there is no issue of concurrent delay to begin with. In other words, this scenario of overlapping delaying effects does not amount to concurrent delay. If on the other hand it is determined that the contractor should be entitled to extension of time for the Employer’s delay, then this scenario qualifies as concurrent delay. In other words, whether or not certain scenario qualifies as concurrent delay can have a significant impact on the consequential extension of time and financial compensation. This is because in general when dealing with concurrent delay, parties are mostly expected to ‘share’ the adverse consequences although different approaches may have different method of allocation. When only one party shoulders the adverse consequences in its entirety, e.g. when the effective cause of delay is determined to be the contractor’s delay, there is strictly speaking no issue of concurrency. 

It is worth reiterating that the definition of concurrent delay as well as the treatment to concurrent delay are not ‘settled’ and therefore continue to evolve. Parties are therefore advised to both define and agree on these issues under their contract in order to avoid uncertainty. This is perhaps why understanding the different approaches to concurrent delay may be able to help inform what would be the parties’ ‘preferred’ position and to negotiate accordingly. The next few sections of this article will explore the different approaches in further detail. 

Assessment Of Concurrent Delay – Apportionment Approach

The origin of the ‘apportionment’ approach can be traced back to a Scotland case of City Inn Ltd v Shepherd Construction Ltd back in 2010. Although this case was subject to appeal in the following year, the findings remained largely intact as the lower court’s determinations were essentially affirmed. Under this methodology, a fair and reasonable apportionment exercise shall be carried out based on the ‘causative significance’ and ‘degree of culpability’ of the delaying events caused by both parties. In order to better understand the meaning of this approach, it will be useful to appreciate the perspectives of both its proponents and critics. 

The proponents for this approach are likely to favour this methodology as it affords the assessor the widest discretion in that project completion can either be delayed or likely to be delayed by the concerned events. Further, the events had to occur at the same time regardless of its respective timing in commencement and completion. In the absence of critical path analysis the assessor has the prerogative to consider any other evidence that is deemed appropriate as a matter of ‘common sense’. In determining causative significance, the assessor may have regard on the length of delay caused by each event as well as the proportionality of financial implications that may ensue e.g. liquidated damages and loss and expense in consequence of the extension of time. So long as the assessor exercise judgment in a fair and reasonable manner, there is no prescriptive approach to restrict over how exactly the apportionment shall be made. The flexibility and latitude described above meant that parties’ entitlement may not be wholly jeopardised even if they do not have the most detailed and thorough documentation and evidence trail to support their claim. 

On the other hand, critics of this approach are likely to argue that the essence to any agreement of an assessment methodology for concurrent delay is that it provides certainty and clarity. The apportionment approach is exactly the opposite of that since the assessor has such a wide discretion that he is left no wiser as to how exactly to carry out the apportionment apart from certain overarching principles to refer to. By way of illustration suppose an assessor believes that there is equal culpability between both parties, the outcome of assessment could be different depending on how the apportionment is applied. Certain assessor may take the position that he shall apportion based on duration of delay. In this regard due to equal degree of culpability on both parties, the total period of concurrent delay shall be split by half and the contractor shall be granted extension of time for half of the duration it claimed. On the other hand, other assessor may take the position that apportionment shall be applied based on financial damages instead. If the Employer imposes a certain rate of liquidated damages that is significantly higher than the rate of prolongation cost claimed by the contractor, the assessor may have to grant more extension to the contractor to offset the arithmetical disparity. Therefore the outcome of extension of time for the period of concurrency may differ depending on how the ‘apportionment’ is interpreted. Finally, the ‘fair and reasonable’ approach without necessarily referring to critical path analysis may result in violating the fundamental requirement for a claimant to demonstrate causation as well discharging burden of proof. The aggrieved party may dismiss the outcome of apportionment as matter of arbitrary determination or function of expedience. 

Assessment Of Concurrent Delay – Time Not Money Approach (Malmaison Approach)

The origin of the ‘Malmaison’ approach can be traced back to an English case of Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd back in 2005. This is why it is referred to as the ‘Malmaison’ approach. Under this approach, where there is concurrent delay the contractor is entitled to full extension of time but not financial compensation. This approach allows both parties to be successful in part of their claim where the Employer is not liable for prolongation costs claimed by the contractor and likewise the contractor will not be liable for liquidated damages. By the same token, the adverse implications arising from their respective culpabilities are ‘shared’. In other words, concurrent delay is treated similar to that of a neutral event e.g. inclement weather, war, civil unrest etc. 

This approach avoids the violation of prevention principle. Under the prevention principle, the Employer cannot benefit from its breach of contract. Therefore, where the Employer contributed to the delay, it cannot then benefit from its breach by recovering liquidated damages from the contractor that it had prevented from performing its obligations. Further the Malmaison approach appears to be in sync with the SCL Delay And Disruption Protocol’s (2nd Edition) recommendation on concurrent delay. Under this protocol, the contractor’s delay should not reduce the amount of extension of time due to the contractor as a result of the Employer’s delay. This protocol’s position on concurrent delay is influenced by the ‘prevention principle’ under English law. 

Unlike the apportionment approach, the Malmaison approach is relatively more prescriptive and certain in its treatment of concurrent delay. The assessor therefore has less discretion in approaching concurrent delay thus resulting in an extension of time outcome that is more predictable. Contracting parties that agree to this approach are usually in favour of having more control over the manner in which their disputes are resolved.

Assessment Of Concurrent Delay – Dominant Cause Approach

Dominant cause approach can best be described as a ‘middle ground’ between apportionment approach and Malmaison approach. This is because it has certain positive attributes from both apportionment and Malmaison approaches whilst in some way addresses their respective shortcomings. In general in case of concurrent delay, the party that was responsible for the dominant factor or the primary contributor of the delay shall be liable based on the dominant cause approach. Unlike the Malmaison approach where the contractor is only entitled to extension of time but not financial compensation for concurrent delay, the contractor under dominant cause approach may be entitled to both extension of time and financial compensation if it is established that the Employer was responsible primarily or predominantly for the delay. Likewise unlike the apportionment approach with no prescribed methodology on how the apportionment is exactly carried out, the dominant cause approach requires the identification of a primary factor or dominant cause of delay to completion. Whilst some may argue that what exactly amounts to a dominant cause can be subjective, it may not necessarily be the case when presented with facts. Admittedly when there is no dominant cause identified or that both parties caused the delay in an equally dominant manner, it is unclear what would be the assessment outcome. 

The following is a hypothetical scenario to help illustrate the identification of dominant cause. Suppose as the construction of commercial building approaches completion, concurrent delay occurs. As regards the Employer, it had initiated an eleventh hour enhancement to the entire building’s air conditioning and mechanical ventilation (ACMV) system so as to achieve certain higher tier environmental sustainability and green initiative award. As regards the contractor, one of the six elevators was delayed in its completion due to missing components. Both these critical events had the same delaying effects and are simultaneously felt in the schedule. When viewed with facts, the Employer’s delay appear to be the dominant cause for various reasons. Firstly by way of physical magnitude of the delaying effect, the delay to ACMV system affected the entire building whilst only one of the six elevators were delayed in its completion. Therefore, it is likely that the financial magnitude of ACMV system should easily eclipse that of the delayed elevator. Secondly, whilst both works were on critical path for project completion, it would not be surprising for the certifier to classify the elevator as ‘list of minor outstanding works’ that can be followed up post practical completion. After all, five elevators can still serve the occupants of the commercial building with tolerable disruption to its operation. The upshot to the above hypothetical scenario is that there are typically several objective parameters e.g. financial measure, physical magnitude, operational significance etc that can be considered in evaluation of what amounts to ‘dominance’.

Concurrent Delay Under SIA, PSSCOC And REDAS

As there is no universal definition of what constitute concurrent delay as well as its prescriptive method of assessment, it incumbent upon parties to agree on these critical issues. Since most projects in Singapore utilise standard forms of construction contract as the template agreement, it will be useful to understand the existing provisions that deal with concurrent delay. 

Under REDAS Design And Build Conditions of Contract (3rd Edition of October 2010), the provision for concurrent delay can be found in Clause 18.1.2. Under this clause it is stipulated that in determination of extension of time, the Employer’s Representative shall take into account any delays due to the ground(s) relied upon by the contractor which may operate concurrently with, amongst others any delays due to acts or defaults of the contractor. Whilst taking into account expressly recognises the potential occurrence of concurrent delay, there is no definition of what amounts to concurrent delay and its assessment methodology. This leaves the assessor quite a wide discretion as to how he should take the contractor’s delay ‘into account’. Parties entering into REDAS contract should therefore consider if particular conditions for concurrent delay are necessary. It should be noted that under design and build procurement pathway, the Employer’s role (including its team of consultants) in project execution is significantly lower than in traditional procurement route. The likelihood of concurrent delay should accordingly be lower in relative terms, whilst not completely eliminated. 

Under Public Sector Standard Conditions of Contract (PSSCOC) for Construction Works (8th Edition July 2020) the provision for concurrent delay can be found in Clause 14.3(3). Under this clause it is stipulated that in determination of extension of time, the Superintending Officer shall ‘take into account’ any delays which may operate concurrently with the delay due to the event(s) that are excusable in nature and which are due to acts or default on the part of the contractor. The wordings under PSSCOC are rather similar to that of REDAS. However there is one distinction under PSSCOC in that under its Clause 14.2 the Superintending Officer may either grant extension of time ‘prospectively’ or retrospectively. Discussions on concurrent in this article particularly on the effective cause of delay as well as the delaying effects of concurrent delay are more relevant under retrospective analysis. These determinations can be meaningfully made with the benefit of facts, contemporaneous programmes, site records etc. Prospective analysis on the other hand, attempts to makes calculated assessment of what may happen in the future which may not necessarily align with the eventual facts. However, parties may favour prospective analysis if it allows upfront certainty and avoidance of disputes. If the Superintending Officer decides to adopt prospective analysis, the assessment outcome may be more oriented towards achieving commercial agreement rather than substance of merit of each parties’ case. Under such a scenario, the definition of concurrent delay and the method of assessment may not be entirely critical.

Under Singapore Institute of Architects (SIA) Building Contract 2016 (1st Edition), the provision for concurrent delay can be found under its Clause 23(6). Under this clause, if more than one cause concurrently caused the delay, the total time delay shall be divided equitably between conditions and events that shall justify an extension of time and those which shall not. It appears that this assessment approach resembles the ‘apportionment method’. Whilst recognising the need to fairly distribute the entire duration of schedule overrun between the two culpable parties, it leaves the Architect with wide latitude to decide how specifically this ought to be done. Parties who are inclined to incorporate a more prescriptive approach are therefore encouraged to introduce particular conditions accordingly.

Conclusion

Discussion on concurrent delay is important because it provides clarity on its definition including the assessment methodology. Where both parties are actively involved in the execution of construction works, the likelihood of concurrent delay is extremely high due to interdependency. It is therefore surprising that most standard forms of contract remain silent, intentionally or otherwise on this subject despite its common occurrence. The lack of clarity in definition of concurrent delay will invariably affect any compliance with condition precedent and the typical disclosure of associated details to enable assessment of extension of time.




Koon Tak Hong Consulting Private Limited