Concurrent delay in construction projects; A Civil law perspective

R. Venkata raghavan, LLM (UK), C.Eng, FCIArb, FCMA, MRICS

Partner/Director, C Cubed Consultants Limited, Dubai

Preamble

One of the most common issues most frequently encountered in today’s construction industry is
the project delay. Contractor’s lack of resources, non-availability of materials, changing
environmental conditions, poor design and coordination and owner instigated changes are the
top reasons for a project delay. Delays are indeed expensive for both the Parties.

Construction contracts do specify remedies to the innocent party in case of delays. The owner
has the right to claim for liquidated damages should the Contractor is culpable for the delay and
the Contractor gets compensation as prolongation costs if the delays are attributable to the
owner. Even standard forms of contracts view the delay from the perspective of single party’s
liability.

The situation where a given period of delay can potentially be attributed to several events falling
within both parties' spheres of responsibility, commonly termed concurrent delay, is rarely
regulated in construction contracts in spite of its common occurrence. So, the professionals
involved in dealing with concurrent delays have to look beyond the construction contracts like
the case laws and thankfully there are industry protocol like society of construction law (SCL) but
unfortunately the recommendations are not conclusive and the law seem to evolving over the
years on this subject. Further, the established legal principles of common law family countries
are hardly applicable in civil law jurisdictions.

In this article, the author intends to present the concurrent delay from civil law perspective
(only). The author believes that this brief article would be useful for technical arbitrators
involved in the international arbitration involving construction disputes in these jurisdictions. It
will also help the common law based professionals to understand how the civil law family view
the concept of concurrent delay.

Definition of concurrent delay

Although there have been several definitions to precisely explain the concurrent delay, the most
common and widely accepted definition of concurrent delay is, “a period of Project overrun
which is caused by two or more effective causes of delay which are of approximately equal
causative potency1”. This definition established by SCL includes delay that is caused by events
that occur at different times but which result in a period of delay that overlaps2. It is also noted

1
The definition by Society of Construction law; See SCL paper 100, published in February 2002 by John
Marrin QC
Michael Grose, “Construction law in the UAE and Gulf”, Wiley Blackwell, first edition 2016, page131
2
that the causes of these delays by either Party should be of exactly equal effect and also of
approximately equal strength3. (Emphasis added)

Concurrent delay under common law

The English case law has a long history on concurrent delay and we have judicial guidance of
over 40 years on this topic. In addition we have the Society of Construction law protocol and the
AACE protocol which deals with concept of concurrent delay on either side of the Atlantic
Ocean.

Surprisingly, there is very little guidance available from the standard form of construction
contracts on this important topic. Neither FIDIC nor JCT provides a clear prescription on how to
deal with a concurrent delay situation. Given the fact, most of the construction delays are
seldom the responsibility of one Party, dealing with concurrent delay is of great importance in
construction disputes.

Concurrent delay under Civil (French and German) Law

The professionals operating under Common law jurisdictions are familiar with the terminologies
like prevention principle, the ‘but-for test of causation and the dominant cause. Unfortunately
none of these legal principles are applicable in civil law jurisdictions. In other words, the
principle of causation is not dealt under the civil codes including the French and German codes.
It is stated that French courts proceed empirically and not formally adopting the causation
approach4. It is said that, “French courts would, however, usually approach that question by
trying to apportion the delay to the completion of the works as between the delay events
caused by the Employer5 and those caused by the Contractor. The Contractor would then only
receive an extension for a reasonably apportioned part of the delay6. (Emphasis added)

Similarly the German courts have dealt with the case of parallel hindrances7 caused by both
parties. The parallel hindrance referred here is the nothing but concurrent delay. German
Federal High Court in its decision8 stated that

In cases where both Contractor and Employer set causes for hindrances and where both
are responsible for each hindrance, a damage due to the occurred delay has to be
shared according to the respective degree of default and causation. The extent….. can
be decided by the court on the basis of ‘free belief’ according to Section 287 of German
Civil Procedure code. (Emphasis added)

Section 287 of German Civil Procedure code states that

3
SCL paper 179, February 2013, John Marrin QC
4
Principles of French Law, John Bell, Oxford University Press 2008
5
Employer denotes the Owner: The terminology used in this article is based on FIDIC. Engineer denotes
Contract Administrator.
6
https://globalarbitrationreview.com/jurisdiction/1004545/france
7
Concurrent delay is termed as parallel hindrance in German texts
8 th
File No. VII ZR 185/91, 14 January 1993
 If there is a dispute between the parties whether there is a damage and to what extent a
damage….to be compensated exists, the court will decide this question under
appreciation of all circumstances and free conviction. Whether and to what extent
hearing of an authorised expert for which a party filed or ex officio, must take place at
the discretion of the court.

In summary, the German law gives no coherent guidance handling concurrent delay or parallel
hindrance and there are no established rules to handle these situations. The courts have been
given the freedom to decide such cases on the basis of discretion9

The apportionment approach; Scottish case law

Before we move the discussion on the other civil law/Middle-eastern law jurisdictions, let us first
review the root of apportionment approach established from the Scottish case City Inn Limited10

The Scottish legal system

Although the Scotland is part of United Kingdom, which is a Common law jurisdiction, one must
look at the history of the evolution of Scots law can be traced back to the 11th century. In
essence, there were two particularly important stages. The civil law influence dates back to the
days when Scotland and England were completely separate countries. During this time, Scotland
looked to European systems when developing their own laws, particularly to France, which was
heavily influenced by Roman law. The next stage came after the Union of the Crowns in 1603
and the Union of the Parliaments in 1707. From here, the Anglo influence became evident in
Scots law. So, while modern Scots law has evolved its own rules, these can be traced back to
common roots with the English system and further back to ancient Rome11.

City Inn Case facts

Shepherd (Contractor) was engaged by City Inn (Employer) to build a hotel in Bristol on bespoke
contract terms that had incorporated the JCT Standard Form of Building Contract 1980 Edition.
The Extension of Time clause stated that, “the architect could award extensions of time where a
relevant event had caused or was likely to cause the works to be delayed”

The project got delayed and it was found that Employer was responsible for nine causes of delay
to the completion of the works (such as late instructions from the architect), with two causes of
delay the responsibility of the Contractor. Contractor argued that since the Employer events are
the relevant events for granting extension of time, they should be awarded the EOT, whereas
the Employer argued that the Contractor could not have completed the project on time due
their own delays which are concurrent to Employer events.

Dr Stefan Osing, “Time and acceleration issues affecting international construction contracts; The
9

German approach”, accessed at

https://www.heuking.de/.../072_The_International_Construstion_Law_Review_Dr_Osing
10
City Inn Limited v Shepherd Construction Limited [2010] Scot CS CSIH 68, 22 July 2010
11
http://thestudentlawyer.com/2013/06/17/the-scottish-legal-system-in-a-nutshell/
The Verdict

Lord Osborne, who delivered the majority verdict (2:1), agreed that where there are concurrent
delays, caused by the Employer and the Contractor, delay may be apportioned between the
competing causes. He said

“…where a situation exists in which two causes are operative, one being a relevant event
and the other some event for which the Contractor is to be taken to be responsible, and
neither of which could be described as the dominant cause, the claim for extension of
time will not necessarily fail”.

In such a situation, which could, as a matter of language, be described as one of

concurrent causes, in a broad sense, it will be open to the decision-maker, whether the
architect, or other tribunal, approaching the issue in a fair and reasonable way, to
apportion the delay in the completion of the works occasioned thereby as between the
relevant event and the other event. (Emphasis added)

A point of caution is relevant here. The apportionment approach will be applicable only when
neither the Contractor delay nor the Employer delay could be described as a dominant cause.
Lord Osborne clarified that, “if a dominant cause can be identified as the cause of a particular
delay, effect will be given to that by leaving out of account any causes which are not material.
Therefore, in those circumstances, the success of an extension of time claim will depend on
whether the dominant cause is a relevant event”. So, the apportionment approach has to be
carefully applied after examining the existence of a dominant cause and whether that cause is
relevant event. It should be noted that English courts have rejected the apportionment approach
of sharing the liability in case of concurrent delays. So, this principle is not applied in English
cases.

The Traditional US Approach to Concurrent Delay

Although the USA is a follower of common law system, the application of concurrent delay by
the courts has been interesting. Historically, US courts took the approach that where each party
proximately contributes to the delay neither party was entitled to recover damages for delay12.
Courts did this because there were no reliable means to distinguish between the causes and
effects of various delays. The traditional rule made sense; if you can’t determine with reasonable
certainty that who has caused the delay and what effect the delay had on the project, no party
should be entitled to damages13.

The Modern US Approach

With the development of Critical Path Method (CPM) scheduling and principles, US courts have
begun to apply a more modern approach to concurrent delays. The modern approach allows a
party to recover, even though there are concurrent delays, if clear apportionment of the delay

12
See for example, United Constructors, LLC v. United States, 95 Fed. Cl. 26 (2010)
13
Share the Pain—New Approaches to Allocating Damages Caused by Concurrent Delay, Christopher M.
Horton. Accessed at https://www.smithcurrie.com/publications/common-sense-contract-law/share-the-
pain-new-approaches-to-allocating-damages-caused-by-concurrent-delays/
attributable to each party has been established14. If the delays are intertwined and cannot be
separated, the court will revert to the traditional rule and deny recovery to either party. “Both
federal and other state courts, however, have been shifting away from the strict application of
[non-apportionment]. ‘During the past 30 years’, ‘a strong majority’ of courts have adopted the
‘modern view and allow[ed] liquidated damages to be apportioned when faced with damages
that are in fact divisible15. ”

How Concurrent Delay will be addressed under UAE Law

The French Civil Code has influenced the civil codes of many MENA16 countries including Egypt,
which in turn is viewed as the source and model on the basis of which many Arab countries have
modelled their laws. The Egyptian and in turn other Middle-Eastern civil codes (including UAE)
have been written with a broad mix of French civil code and sharia’ principles.

The following civil codes from UAE suggest that the local law prefers the apportionment
approach which was established by the City Inn Scotland case.

UAE Civil code Article 290 states that:

It shall be permissible for the judge to reduce the level by which an act has to be made good or
to order that it need not be made good if the person suffering harm participated by his own act
in bringing about or aggravating the damage.” (Emphasis added)

Article 291: If a number of persons are responsible for a harmful act, each of them shall be liable
in proportion to his share in it, and the judge may make an order against them in equal shares or
by way of joint or several liability”. (Emphasis added)

Based on the above extracts from the UAE civil code it appears that the courts have significant
flexibility in terms of determining liability in the case of concurrent delays but are most likely to
adopt an approach similar to the apportionment approach described above17.

What is apportioned?

When we say that the civil law courts apportion the liability, the question arises what is being
apportioned? Are we apportioning the fault of each party for every delay caused or we are just
apportioning the duration of delay between two parties namely the Contractor and Employer. It
is established under US law, that courts18 apportion time; they determine the days of delay each
party is responsible for. Apportioning liability of each party for every given delay cause is illogical
since in construction contracts usually one party takes responsibility for a specific risk event and

14
See Catel, Inc. v. United States, No. 05-1113 C, 2012 WL 3104366, at *33 (Fed. Cl. July 30, 2012); George
Sollitt Constr. Co. v. U.S., 64 Fed. Cl. 229 (2005)
15
Great American Ins. Co. v. E.L. Bailey & Co., Inc., 641 F.3d 439, 448 (6th Cir. 2016) (citing Hutton
Contracting Co., Inc. v. City of Coffeyville, 487 F.3d 772, 785 (10th Cir. 2007))
16
MENA: Middle East and Africa
“Concurrent Delay: A Contractor Get Out Of Jail Card Or Employer Windfall?”, Michael Stokes & Samuel
17

Widdowson, Navigant Consulting

18
R.P. Wallace, Inc. v. United States, 63 Fed. Cl. 402, 410 (2004)
it is never the case that any particular delay event is X percentage of Contractor’s fault and Y
percentage of Employer fault. In other words, the risks are not normally shared.

Conclusion

The reader might have got a glimpse of the issues and approach adapted by the civil law
jurisdictions while dealing with concurrent delay. In absence of clear contract provisions to deal
with concurrent delays, the international arbitrators must carefully review and decide the
outcome based on the mutual intention of the parties at the time of entering into the contract
and based on the civil codes and limited case law as referred above. Obviously, the preference is
the apportionment approach and not the prescriptive approach adapted by English courts19 and
SCL protocol20.

About the author:

Venkat is an international arbitrator, Consultant and a reputed Trainer who has over 33
years of industry experience in construction both in India and Gulf countries. He has
been invited to speak at international conferences and prestigious educational
institutions like IIT, Chennai, and British University in Dubai. He regularly conducts
workshops and training sessions on various topics like contracts management, FIDIC,
Delay and disruption claims, dispute resolution and Subcontract management to name a
few. Venkat has co-founded a contract and claims management consultancy by name “C
Cubed Consultants Limited” and he advises clients and Contractors on issues and claims
related to construction and engineering. He can be contacted on his email
rmvenkat@gmail.com or through his web site www.rmvenkat.com

19
Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd
20
Guideline 1.10, SCL Delay and Disruption protocol, October 2002, Subject to Rider1