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Assessment and float
The assessment for an extension of time must be supported by some form of analysis. The
extent of such analysis may depend on factors such as the nature of the delaying event, the
complexity of the project, and whether the submission relates to a simple notification of a likely
delay to the architect or demonstration of delay in a more formal arena. Delay analysis is
increasing in importance in the UK, with many surveyors identifying the need for a more
detailed analysis than has hitherto been the norm. Surveyors, architects and engineers should
take note of a number of important recent judgments when conducting such analyses. The
judgements are considered in some detail in the cases resource.

Importance of logical assessment

Those responsible for analysing delay need to conduct a proper retrospective delay analysis. It
is no longer acceptable (if it ever was) to award an extension of time or assess prolongation
costs based on an impressionistic view formed from a comparison of simple bar charts. This
principle was highlighted by the case of John Barker Construction Ltd v London Portman
Hotels Ltd [1996], where the judge held that the effect of the architect making an
impressionistic, rather than a calculated and logical, assessment of the contractor's entitlement
to an extension of time, was to introduce a fundamental flaw into his assessment. The
architect's award was therefore disregarded by the court, which used the contractor's own
delay analysis to determine the contractor's entitlement to an extension of time.

It is also important not to get too carried away with the delay analysis process. In Skanska
Construction UK Ltd (Formerly Kvaerner Construction Ltd) v Egger (Barony) Ltd [2004] EWHC
1748 (TCC) a delay analyst who had been called al an expert witness was criticised by the
judge for having prepared a report of some hundreds of page, supported by 240 charts, but
having undertaken inadequate research and checking of the facts.

Ownership of float

The ownership of any float contained within a contractor's programme is a much debated issue
and has been argued about for many years.

The case of Ascon Contracting Ltd v Alfred McAlpine Construction Isle of Man Ltd [1999]
touched on the issue of float and provided some useful guidance on delay analysis, as well as
illustrating the difficulties faced by a main contractor when trying to pin the blame for project
delay onto its subcontractors.
Concurrent delays
The following text is derived from an opinion prepared by Jonathan Lewis, a barrister at 9
Stone Buildings. It has been subsequently edited and is included here with his kind
permission.

Where a claim or certain claims for money are made under the contract, the starting point must
be to consider the terms of the clauses relied upon under the contract. The meaning of the
clauses may be determinative of the approach to apply to causation, without any sophisticated
analysis of the principles of causation, even if there is more than one competing cause of
delay. However (more usually), the meaning of the relevant clauses may not answer the
question as to which approach should be applied.

In law, a number of approaches to causation have been suggested. In the context of
apportioning loss arising out of competing causes, Keating on Building Contracts (see Further
information for full details of this publication)suggests four possible approaches.

- The Devlin approach. If a breach of contract is one of two causes of a loss, with both
causes co-operating and both of approximately equal efficacy, then the breach is
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sufficient to carry judgment for the loss (Heskell v Continental Express Ltd [1950], 1
All ER 1033 per Devlin J).
- The dominant cause approach. If there are two causes, one the contractual
responsibility of the defendant and the other the contractual responsibility of the
claimant, then the claimant succeeds if he or she establishes that the cause for
which the defendant is responsible is the effective, dominant cause. The question as
to which cause is dominant is a question of fact, to be decided by applying
commonsense standards.
- The burden of proof approach. The claimant must effectively prove that 'but for'
the defendant's breach of contract, he or she would have suffered no loss.
- The tortious approach. The claimant recovers if the cause upon which he or she
relies caused or materially contributed to the delay.

The 'burden of proof',or the 'but for' approach to causation has been generally rejected as the
correct approach (see Galoo Ltd v Bright Grahame Murray in the Key cases section).

The editors of Keating submit that the correct approach to apply in instances of concurrency in
construction contracts is the dominant cause approach. The other approaches are rejected
primarily because they fail to answer what is referred to as the 'obverse problem'. The obverse
problem arises because of reciprocal claims made for the same delay. It is considered a
nonsense for both the contractor and employer (or, for that matter, the main contractor and
sub-contractor) to have valid cross-claims against each other for the same period of delay,
each relying on a competing cause for delay. It is considered that the dominant cause
approach avoids such a result. An analogy is drawn with insurance cases, which require the
identification of the dominant cause by applying commonsense standards. The leading
insurance case of this type is the decision of the House of Lords in Leyland Shipping Co Ltd v
Norwich Union Fire Insurance Society Ltd.

The dominant cause approach has also found favour in the opinions of Lords MacLean,
Johnston and Drummon Young in the Scottish case of John Doyle Construction Ltd v Laing
Management (Scotland) Ltd. In this case the court's opinion was that the question of causation
must be treated by 'the application of common sense to the logical principles of causation':
John Holland Construction & Engineering Pty Ltd v Kvaerner RJ Brown Pty Ltd, BLR 84I per
Byrne J.; Alexander v Cambridge Credit Corporation Ltd, (1987) 9 NSWLR 310; Leyland
Shipping Company Ltd v Norwich Union Fire Insurance Society Ltd, [1918] AC 350, at 362 per
Lord Dunedin. In this connection, it is frequently possible to say that an item of loss has been
caused by a particular event notwithstanding that other events played a part in its occurrence.
In such cases, if an event or events for which the employer is responsible can be described as
the dominant cause of an item of loss, that will be sufficient to establish liability,
notwithstanding the existence of other causes that are to some degree at least concurrent.
That test is similar to that adopted by the House of Lords in Leyland Shipping Company Ltd v
Norwich Union Fire Insurance Society Ltd.

The dominant cause approach also found favour in the Court of Appeal in Midland Mainline Ltd
and Others v Eagle Star Insurance Company Ltd [2004] EWCA Civ 1042 which involved
compensation for losses following the Hatfield train crash.

It is recognised that the dominant cause approach is very much an 'all or nothing approach' to
causation. In other words, if Party A proves that Party B was the dominant cause of delay, its
claim will succeed even though Party B might have proven that Party A was also culpable to
an extent. Conversely, if Party A proves that Party B acted in breach of contract and was a
cause of delay, or even that Party B was an equally effective but not dominant cause of delay,
Party A may be left without a remedy and Party B will escape liability for its breach.

It is possible to derive from the authorities two approaches alleviating the potential harshness
of the dominant cause approach. The first is really a restatement of the Devlin approach set
out above. The second is based on a willingness to apportion damages between the claimant
and defendant in cases of concurrent causation where the claimant and defendant are both
culpable.

Restatement of the Devlin approach

If a breach of contract is one of two causes, both co-operating and both of equal efficacy in
causing loss to the claimant or referring party, then the party responsible for the breach is
liable to the claimant or referring party for that loss. The contract-breaker is liable so long as
his or her breach was 'an' effective cause of the loss: the court need not choose which cause
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was the most effective. This proposition restates the dicta of Devlin J in Heskell v Continental
Express Ltd, an approach approved by the Court of Appeal in the more recent cases of
Banque Keyser SA v Skandia (UK) Insurance [1990] 1 QB 665 and County Ltd and another v
Girozentrale Securities [1996] 3 All ER 834.

If the above approach is applied, it only requires Party A to prove that Party B was an effective
cause of the delay. Party A does not need to prove that Party B was more effective than itself
in causing delay. Accordingly, the claim assessor does not need to identify the dominant cause
of delay, so long as he or she is satisfied that Party B was an effective cause of the delay.

The apportionment of damages in cases of concurrent causation

This approach requires the claim assessor to consider the respective potency of both parties'
conduct to the overall delay and allocate the financial consequences depending on the
respective potency.

It is correct to state that the courts have historically tended to apply the principles of causation
in an 'all or nothing' way. In the absence of statutory authority, the courts have declined to
apportion damages as between two or more competing causes. The Law Reform (Contributory
Negligence) Act 1945 permits apportionment of loss by the reduction of the claimant's
damages where he 'suffers damage as the result partly of his own fault and partly of the fault
of any other person'. The Act only applies to claims in contract in certain exceptional cases.

However, in recent cases determined by English courts, the court has apportioned damages in
cases involving competing causes, even though in each case the Law Reform (Contributory
Negligence) Act 1945 was held to have no application. (See Tennant Radiant Heat Ltd v
Warrington Development Corporation in the Key cases section.)

The case of Tennant was considered briefly by the Court of Appeal in Bank of Nova Scotia v
Hellenic Mutual War Risks Association (Bermuda) Ltd [1990] 1 QB 818 at 904. The Court of
Appeal did not disapprove of the decision, although May LJ said, obiter:

'Similarly, we think that the facts and circumstances of the present case are such that it can
and should be easily distinguished from those in Tennant Radiant Heat Ltd v. Warrington
Development Corporation [1988] 1 E.G.L.R. 41, decided in this court on 16 December 1987.
We merely add respectfully our view that the scope and extent of this last mentioned case
would have to be a matter of substantial argument if the principle there applied were to arise
for consideration in another case.'

However, the case of Tennant was applied by HHJ Hicks QC in W Lamb Ltd (t/a The Premier
Pump & Tank Co) v J Jarvis & Sons Plc. In fact, the judge considered that the decision in
Tennant was binding upon him.

There is also the dicta of Brandon J in the case of The Calliope, Carlsholm (owners) v Calliope
(owners) [1970] 1 All ER 624 at 638, supporting the view that in principle, concurrent causation
should be capable of being reflected in the apportionment of damage.

More recently, in the Scottish case of John Doyle Construction Ltd v Laing Management
(Scotland) Ltd the court's opinion was that even if it cannot be said that events for which the
employer is responsible are the dominant cause of the loss, it may be possible to apportion the
loss between the causes for which the employer is responsible and other causes. In such a
case it is obviously necessary that the event or events for which the employer is responsible
should be a material cause of the loss. Provided that condition is met, however, the judges
were of opinion that apportionment of loss between the different causes is possible in an
appropriate case.

The Malmaison approach

John Marrin QC, in an article on concurrent delay ((2002) 18 Const LJ at 436), submits that the
correct approach is what has been described as the Malmaison approach, derived from the
case of Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd. It is important
to note that this case did not directly consider the correct approach to apply to causation in
claims for money under the contract or for damages for breach of contract in cases where the
causes of delay were concurrent. In the Malmaisoncase, Dyson J (as he then was) determined
an appeal relating to a dispute on the pleadings in an arbitration as to the extent of the inquiry
which the arbitrator was entitled to undertake to resolve one of the contractor's extension of
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time claims. The judge recorded that it was common ground between the parties that if there
were two concurrent causes of delay, one a 'relevant event' (as defined in a standard form
contract) and the other not, then the contractor would be entitled to an extension of time for the
period of delay caused by the relevant event, notwithstanding the concurrent effect of the other
event. A simple example was given (at 37, para. 13):

'If no work is possible on site for a week not only because of exceptionally inclement weather
(a relevant event), but also because the contractor has a shortage of labour (not a relevant
event), and if the failure to work during that week is likely to delay the works beyond the
completion date by one week, then if he considers it fair and reasonable to do so, the architect
is required to grant an extension of time of one week. He cannot refuse to do so on grounds
that the delay would have occurred in any event by reason of the shortage of labour.'

The suggested rationale for this approach is that it does no more than reflect the allocation of
risk agreed upon by the parties when they entered into their contract. The suggestion is that, in
allocating risks as between themselves, the parties may be taken, first, to have recognised that
any one delay or period of delay might well be attributable to more than one cause and,
secondly, to have agreed, nevertheless, that provided that one of those causes affords
grounds for relief under the contract, then the contractor should have his relief. (See also the
case of Royal Brompton Hospital NHS Trust v Hammond (No. 7) [2001] 76 Con LR 148, QBD
(TCC) per HHJ Seymour.)

The following points might be made in relation to the article by John Marrinand the Malmaison
approach.

Although doubts are expressed about the dominant cause approach, it is thought that this is in
the context of a contractor's rights to extensions of time, rather than causation generally.

Even if the Malmaison approach is applied and the sub-contractor is entitled to an extension of
time, notwithstanding concurrent causes of delay, it does not follow that the sub-contractor
should be entitled to any compensation for the period of the extension. This is recognised in
the Delay and Disruption Protocolpublished by the Society of Construction Law. The Protocol
suggests that the contractor should not be entitled to any compensation unless it can separate
out additional costs caused by the employer's delay from those caused by its own delay. This
gives rise to the question of what approach should be taken to causation in determining a
sub-contractor's money claim for prolongation under the contract. The Protocol does not
expressly deal with this issue, but from its formulation of the contractor's entitlement, it appears
to advocate the 'but for' test. In other words, unless the sub-contractor can prove that but for
the delay caused by the contractor it would not have incurred additional costs, its claim for
compensation will fail.

The suggested rationale for the Malmaison approach is that the parties have agreed to
allocate the risk, in the knowledge that any one period of delay might be attributable to more
than one cause. It is submitted that this rationale is highly questionable. It is difficult to see why
(or how) the parties should be taken to have allocated the risk, in circumstances where it is
conceivable that both the contractor's claim for prolongation and the passing down of
liquidated damages might fail because of the sub-contractor's entitlement to an extension of
time. A sub-contractor's claim for compensation will also fail, unless it can prove that its loss
and damage was caused exclusively by the contractor's delay, as opposed to its own. In
addition, this scenario potentially gives rise once again to the obverse problem.
Records
Delay analyses, particularly when undertaken retrospectively are highly dependant on the
availability of contemporaneous records and therefore preparation should be carefully
managed by those administrating contracts from the commencement of each project. Most
contractors maintain various contemporary records on construction projects as a matter of
policy, as a management tool, because of contract requirements and to comply with statutory
duty. Many of these record the progress of the works and what in the event occurred. These
types of record include:

- progress meeting records;
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- programme progress updates;
- short-term programmes and updates;
- marked-up drawings;
- progress photographs;
- general correspondence;
- concrete-pour records;
- daily site diaries and labour allocation sheets;
- general meeting minutes; and
- subcontractors' formal handover sheets.

In practice many of these records contain insufficient detail, are inaccurate or incomplete, and
in some cases not kept at all. The quality and detail of the records are likely to vary
considerably for different sections and time periods of the works and it is not unusual to find
that the client's team have made no formal requests for records required under the contract
nor for that matter a formal complaint when they do not appear. What is often seen is that
record keeping tends to improve as the risk of a dispute increases with the parties looking a
little more closely at the terms of the contract. The importance of keeping adequate and
appropriate records cannot be overly emphasised.
Carrying out a delay analysis
There are five main delay analysis techniques:

- as-planned v as-built;
- as-planned impacted;
- collapsed as-built;
- windows analysis;
- time impact analysis.

The as-planned v as-built is a simple comparison between the planned programme and the
as-built programme. It is therefore a simple graphical comparison between what was planned
to happen and what in the event actually did happen.

The as-planned impacted method operates by adding or 'impacting' the claimed delaying
events onto the planned programme. By adjusting the programme to take account of the effect
of these events a revised programme is produced indicating their impact.

The collapsed as-built involves removing the claimed delaying events from the as-built
programme causing it to become shorter or to 'collapse'. The aim is to produce a programme
which reflects what would have happened 'but for' the effects of the delaying events.

Windows analysis breaks the works into discrete periods of time or 'windows'. By utilising
contemporaneous progress information the status of the progress achieved in each window
can be determined and explanations sought.

Time impact analysis is similar to the windows analysis but rather than looking at delays
within defined windows of time the actual timing and duration of the delaying event forms the
period for analysis.

Which technique should be used will be dependent on many factors including whether the
delays are being considered during the course of the works 'prospectively' or retrospectively;
the terms of the contract; the information available; the nature of the work; and the amount in
dispute.

It must be emphasised that all of the above techniques attract a certain amount of criticism and
it is likely that they will produce differing results. With the exception of the as-planned v
as-built, the above methods rely on the technique known as critical path analysis which brings
with it problems associated with the need for certainty and possible theoretical and
deterministic results. The use of critical path based software often results in the delay analyst
concentrating more on the manipulation of the software and generation of voluminous
programme charts than a review of the factual evidence.

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Whichever method is used to analyse delay it must be robust and produce a result that
accords with common sense and the factual evidence.
Concluding the evaluation
Having raised queries and made requests for information, and given due time for the receipt of
the same, the claim assessor may conclude the evaluation on the basis of data to hand.

The burden of proof remains with the contractor. The claim assessor cannot be expected to
speculate some time after the event as to why, for example, additional resources were
employed. This is particularly relevant where details that could have been supplied were not.
In this respect, allegations must be substantiated and every opportunity should be given to
ensure that facts are verified at the time.

Wholly unsupported details and lump sums or claims valued on the basis of anticipated cost
set against actual costs are not generally acceptable evidence of actual additional expense
caused by events for which the employer is responsible. In such circumstances, the claim
assessor should determine an evaluation based on details to hand.

Failure with regard to the timely or adequate provision of necessary information is justification
for the claim assessor to complete the evaluation using only the information made available, in
accordance with the conditions of the contract. It is also justification for deductions to be made
to finance charges if the late information has delayed payment.

Failure in this respect by the contractor may also lead to a refusal to pay such expense in
cases where delay has genuinely prevented or substantially prejudiced the investigation of any
claim by the claim assessor.

However, it should be remembered that an adjudicator or arbitrator is usually given full powers
to open up and review all opinions, decisions, certificates and so on. Therefore, if information
is provided after the final account has been prepared, this must be considered by the claim
assessor when advising the client on potential liabilities in any adjudication or arbitration.

Having concluded the recommendation on the above basis, no further detailed review need be
progressed until reasonable data is to hand. However, attempts at resolving disagreement
over valuation of loss, expense or delay may be undertaken, bearing in mind the option of
referring the dispute to adjudication or to arbitration.
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