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7\ .-iY*

THE SOCIETY OF
CONSTRUCTION LAW
DELAYAND DISRUPTION
PROTOCOL

October 2002
October 2004reprint

www.scl.org.uk
www.eotprotocol.com
l
I
relevant becausethe Contractor is entitled to its actual costs

I 1.5.3
of the prolongationor disruption.

It is a commonmisundcrstanding in the constructionindustry,'

I that if the Contractor has made no or inadequateallowance

for site overheads in its tender, then that fact limits or
removes its entitlement to compensation for proiongation
and/or disruption where the basis of recovery is actual cost
I incurred. This is not correct. Under these circumstances
recoverabiecompensationrequires the ascertainmentof the
actual cost of remaining on site for the additional time. The

I tender allowances are therefore of little relevance to the

ascertainmentof compensationunder thesecircumstances.

I L9.4 The tender allowances may be a useful reference point for

the evaluation of prolongation and disruption causedby a
variation, but only in thosecircumstanceswhere the different
conditions or circumstancesunder which the variations are
I carried out make it inappropriateto apply the contract rates
or prices. Notwithstanding the advice of the Protocol, there
is nothing to prevent the use of the tender allowances as a

I rough guide for the agreementof prolongation costs or for

checking the recovery of prolongation costs through the
value of varied work, if that is what the parties for

I i.i0
conveniencewish to do.

Concurrency as it relates to compensationfor

I prolongation

i.i0.1 If the Contractor incurs additional costs that are caused

I both by Employer Delay and Contractor Delay, then the

Contractor should only recover compensation if it is able
to separate the additional costs caused by the Employer
Delay from those causedby the Contractor Delay.
I Guidanee

I 1.10.2 As it is in relation to EOT, concurrencyis one of the most

ccntentious issues in the determination of recoverable
prolongation compensation. Contention arises when the

I Employer would be liable to compensatethe Contractor for

being kept on site longer than expected,but the Contractor
was late in carrying out work of its own, and so would have
been late completing the work anyway. Should the
I Employer be obliged to compensatethe Contractor in these
circumstances?

I 1.10.3 Answering this questiondoes not always pro-"-edifficult in

practice. The prolongationcompensationwill be recoverable
if the Contractor can prove that its losses result from the

I 22 SCL Delay and Disruption Protocol: October 2002

I
l
I
I
I
Employer Delay. Proper analysisof the facts may reveal the

I true causewithout argument.

1.10"4 Where an EmployerRisk Event and a ConiractorRisk Er.ent

I have concurrent effect, the Contractor may not recover

compensationin respectof the Employer Risk Event unless
it can separatethe ioss andbr expensethat flows from the
Employer Risk Event from that which flows from the
I Contractor Risk Event. If it would have incurred the
additionai costs in any event as a result of Contractor
Delays, the Contractor will not be entitled to recover
I those additional costs. In most casesthis will mean that the
Contractor will be entitled to compensationonly for ani,
period by which the Employer Delay exceedsthe duration of

I the Contractor Delay.

1.10.5 The loss and/or expenseflowing from an Employer Delay

t cannot usually be distinguished from that flowing from

ContractorDelay without the following:
1.10.5.1 an as-planned programme showing how the
Contractor reasonably intended to carry out the
I work and the as-plannedcritical path;
1.10.5.2 an as-built programmedemonstratingthe work and
sequence actually carried out and the as-built

I critical path;
1.10.5.3 the identificationof activitiesand periods of time
that were not part of the original scope;

I 1.10.5.4 the identification of those activities and periods of

time that were not part of the originai scope and
that are also at the Contractor's risk as to cosl and
1.10.5.5 the identification of costs atkibutable to the two
I precedingsub-sections.

1.10.6 This analysis should be co-ordinated with any analysis

I carried out by the Contractor to establish its rights to an

EOT, while remembering that the entitlement to an EOT and
the entitlementto compensationmay not be co-extensive.

I ',.rc.7 Illustrations showing the application of the protoccl to

situations where
'there
is float, concurrent delay, and
concurrent effects of sequential delays and the effects of
Conkactor recoveryplans are attachedas Appendix D.

1.11 of prolongation costs

Time for assessment

1.11.1 Liability for compensation must first be establishedby

showing that the prolongation has been caused by an
Employer Risk Event. Once it is established that
compensation for prolongation is due, the evaluation of
the sum due is made by reference to the period when the

SCL Delay and DisruptionProtocol:October2002 z)

I
I
effeci of the Employer Risk Event was feit not by

l reference to the extended period at the end of the

contract.

I
?--:)---^^
tr tt laturtc(

1.11.2 Arguments commonly arise as to the time when recoverable

prolongation compensationis tc be assessed:is it to be
I assessedby reference to the period when the Employer
Delay occurred (when the daily or weekly amount of
expenditureand therefore compensationmay be high) or by

I referenceto the extendedperiod at the end of the contract

(when the amountof compensationmay be much lower)?

I 1.1i.3 The answerto this questionis that the period to be evaluated

is that in which the effect of the Employer Risk Event was
felt.

I 1.11.4 If amountsof compensationper day for prolongationwere

pre-agreed, then the point in time when the compensable
prolongationoccurredwould need to be consistentwith what

I has been agreed.

l.l2 Float as it relatesto compensation

t I.l2.l If as a result of an Employer Delap the Contractor is
prevented from completing the works by the

I Contractor's planned comDletion date (being a date

earlier than the contract completion date), the
Contractor should in principle be entitled to be paid the
costs directly caused by the Employer Delay,
I notwithstanding that there is no delay to the contract
completion date (and therefore no entitlement to an
EOT), provided also that at the time they enter into the
I contract, the Employer is aware of the Contractor's
intention to complete the works prior to the contract
completion date, and that intention is realistic and

l Guidance
achievable.

I I.12.2 It is important to understandthe significance of the statement

above, and to contrast it with the position taken in the
Protocol on the effect of total float on EOT (see Guidance
I Section 1.3). In relation to EOT, the protocol takes the
positionthat an EmployerDelay shouldnot iesult in an EOT
unless it is predicted to reduce to below zero the total float
on the activity paths affected by the Employer Delay. When
it comesto compensation,the Protocol considersthat, unless
there is agreementto the contrary, the Contractor should be

a ^
L+ SCL Delay and Disruption Protocol: October 2002

I
I
I
r.ntitlcdio coli-rpcrlsatiol
for tlie dclay,eic.nif the dclaydocs

I not result in an EOT. As with the effect of float on

entitlement to EOT. the Protocol recommends that
contracting parties expressly address this issue in their

I contract. They should ask themselvesthe question: if the

Contractoris preventedby the Employer from completing on
a daie earlier than the contract completion date,. should it
have a remedy? If so, in precisely what circumstances? If
I not, then the contract should say so expressly.

',.12.3 Where the parties have not addressedthis issue in their

I contract, for the Contractor to have a valid claim, the

Employer must be aware at the time the contract is entered
into of the Contractor's irrtention to complete prior to the

I contract completion date. It is not permissible for the

Contractor, after the contract has been entered into, to state
that it intends to complete early, and claim additional costs
for being preventedfrom doing so.
I 'i..12.4
The Protocol recognisesthat the position it takes on this
issue might be thought to conflict with the decision of HH

I Judge Fox-Andrews in the @nglish) Technology and

Construction Court in Glenlion Constntction Ltd v The
Guinness Trust (1987) 39 BLR 89, where it was held that

I there was no implied term of the building contract in

questionthat the Employer in that caseshould so perform the
contract as to enable the Contractor to complete the works in
accordance with a programme that showed the works being
I completed before the contract completion date. providing
the Employer is aware of the Contractor's intention prior to
the contract being entered into, there should be no such
I conflict. The Protocol considersthat, as a matter of policy,
contractors ought not to be discouraged from planning to
achieve early completion, becauseof the price advantagethat

I being able to complete early is likely to have for the

Employer. But the potential for conflict reinforces why the
issueshould be addresseddirectly in every contract.

I I-t2.5 The recoverablecompensationin the situation describedin

1.12.1will normally only comprisethe increasedcostsof the
time-related resources directly affected by the Employer
I Deiay to Progress. Recoveryof such compensationwili aiso
be subject to considerationsofconcurrency, as describedin
GuidanceSection1.10.

I l.l3 Mitigation of loss

I 1.13.1 The Contractor should do all it reasonably can to avoid

the financial consequences
of Employer Delay.

SCL Delay and Disruption Protocol: October 2002 25