kc construction update spring2013

7/28/2019 Kc Construction Update Spring2013

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KCConstructionUpdateSpring 2013

Procurement specialist Simon Taylor joinsKeating Chambers

A sad, but salutary lesson – Walter Lilly

Plus ça change, plus c'est la même merits?Some old chestnuts revisited

Concurrent delay revisited

Fionnuala McCredie appointed as Queen's

Counsel – 27th March 2013

Delay Special: in this issue...News:

Philip Boulding QC

John Marrin QC

Adrian Williamson QC



Contents

8

9

10

12

13

14

17

1 Anhony Lavers,

Direcor of Research & Professional Developmen

Welcome to the second edition

Dr Rober Gaiskell QC, CEng.

2013 – the only way is up?

Marc Rowlands QC

Meet the new silk

Seminars and publications

Abnormally low tenders in public procurement

Some old chestnuts revisited

Too good to be true?

John Marrin QC

Concurrent delay revisited

More han jus a consructon se

Other areas of expertise

2

7

Philip Boulding QC

David Gollancz

A sad, but salutary lesson


Plus ça change, plus c'est la même merits?

Marc Rowlands QC reflects on taking silk last year

Brief encounters

Reported casesSelecton of repored cases involving members of

Keatng Chambers

David Thomas QC & Alexander Nissen QC

Selected reported cases

www.keatingchambers.com

1

KCConstructionUpdate Spring 2013

W e have received los of positve

feedback abou he inaugural issue

of KC Consructon Updae, and

hanks o all hose who expressed heir views.

There is, however, no room for complacency

and we know ha we have o keep up our

effors o mainain your ineres.

There is a definie heme in his second issue,

as will be readily apparen.

The case of Walter Lilly v Mackay has

contnued o be much alked abou, parly no

doub because of he sensatonal coverage in

he press i received a he tme of he main

hearing and also because i has made is way

recenly ino he Cour of Appeal. I appears

ha i will no be going o he Supreme Cour

and Mr Justce Akenhead’s judgmen sands.

We have an artcle by Philip Boulding QC who

prepared he commenary on he case for

Consructon Law Repors, on he implicatons

of ha judgmen, partcularly in he areas of

concurren delay and global claims. Adrian

Williamson QC offers an alernatve view.

John Marrin QC’s 2002 paper on Concurren

Delay mus have been one of he mos-cied

ever published by he Sociey of Consructon

Law.

Anthony Lavers, Director of Research & Professional Development

Dr Robert Gaitskell QC, CEng.

Jus before Chrismas, he gave an updae on

he decade ha has elapsed and we have an

abridged version of Concurren Delay

Revisied as our second main feaure artcle.

A fuure heme is prefigured by David

Gollancz’s artcle on abnormally low enders.

Our fron cover welcomes Simon Taylor as a

new Member of Chambers and public

procuremen is a subjec we will be reurningo laer in he year.

UK PLC may have los is AAA ratng, bu

for he consructon indusry, and he

associaed dispue resoluton service

providers, hings are looking up.

The governmen is now well-disposed o big

infrasrucure projecs.

A weak pound means UK conracors andconsultng engineers can compee keenly for

overseas work. The London inernatonal

arbiraton scene is partcularly buoyan.

Visi he Inernatonal Dispue Resoluton

Cenre and you’ll find i packed ou as partes

from around he world sream o London o

have heir dispues arbiraed.

I is no jus London ha is experiencing a

wealh of arbiraton work. SIAC, he Singapore

Inernatonal Arbiraton Cenre, has jus

notfied a record number of cases for 2012.

Las year i handled 235 new cases, an increase

of 25% on 2011.

Hong Kong and oher key cenres are also

having similar experiences. Inernatonal

arbiraton offers several big advanages over

cour litgaton.

Firsly, world-wide enforcemen is simplified by

he New York Conventon 1958.

Secondly, partes from differen counries can

avoid appearing in he cours of eiher if hey

op for arbiraton.

This is he hinking lying behind Russian and

American partes choosing he LCIA (LondonCour of Inernatonal Arbiraton) Rules, and

an English sea for heir dispue, which

oherwise has no link o he UK.

Similarly, African mining projecs may be

arbiraed under he ICC (Inernatonal

Chamber of Commerce) rules in Mauritus.

This has been described as inernatonal

arbiraton’s ‘golden age’ and he increasing

numbers of such consructon cases appears o

bear his ou.

So, where are we headed in 2013...?

The only way is up!

Variations on a theme 2013 – the only way is up?

Welcome to the second edition of

KC Construction Update



2

Backgroundhe dispue had already raised issues o

eres o he legal proession.

Waler Lilly & Co Ld v Mackay [2012]

WHC 649 TCC he cour had o consider

heher in response o an applicaton or

sclosure, correspondence wih Knowles Ld,

claims consulancy ha employed

ersonnel wih legal qualificatons and which

ad been reained by he deendans o

rovide ‘conracual and adjudicaton advice’

as covered by legal proessional or legal

dvice privilege.

he principal judgmen on liabiliy also

onains inerestng findings on subsantve

aers such as exension o tme and head

ffice overheads, and such procedural

aers as he weigh o be given o maers

o pu in cross-examinaton and o he

covery o sums paid in a selemen.

he separae judgmen on coss also

onsiders he grantng o indemniy coss on

e basis o he deendans’ behaviour and

e rejecton o a Par 36 offer.

owever, his artcle ocusses on wha

kenhead J. reerred o as “a number of

sues which may be of ineres o he

onsrucon indusry and specialis legal

raconers … hose include global claims

nd concurren delays” .

The actionhe claiman conracors Waler Lilly (WLC)

ad enered ino a conrac under he JCT 98

Wihou Quanttes) editon wih a

evelopmen company (DMW) he sie

wners, or he consructon o hree luxury

ouses in London. There were significan

elays and he owners, noably Mr. Mackay,

ecame involved in bier dispues wih heir

onsulans, a one sage appointng Knowles

mainain vigilance over hem.

WLC issued proceedings agains Mr Mackay

nd DMW regarding exension o tme which

claimed and money ha i alleged i

as owed.

Concurrent delayUnlike he Archiec, who prior o Practcal

Completon mus make he bes assessmen

possible o likely uure delay resultng romhe Relevan Evens in queston, a cour or

arbiraor has he advanage, when reviewing

he queston o wha exensions were due, o

knowing wha acually happened.

The cour or arbiraor would hen have o

decide on a balance o probabilites wha

delay had acually been caused by he

relevan evens.

However, he judge emphasised ha “The

Cour should be very cauous abou aking

ino accoun, in he exercise of deermining

wha delays were caused by wha evens,

heorecal possibilies as o wha one pary

or he oher migh have done (bu did in fac

no do)” .

Afer reerring o Balfour Beaty Building v Chesermoun Proper es (1993) 32 Con LR

137, he judge warned ha in he conex o a

conracual approach o exension o tme,

one could no simply carry ou a purely

rerospectve exercise, identying he las o a

number o evens delaying completon and

saying ha his caused he overall delay o he

Works.

Wha had o be considered was wha critcally

delayed he Works as hey wen along.

The greaes ineres lies in wha he judge

conribued o he “subsanal debae…as o

how wha is called concurren…causes of

delay should be deal wih” since “mos of he

debae in cases in his counry and elsewhere

has revolved around exension of me clauses

similar o hose conained in Clause 25

where he Archiec has o gran an

exension of me which is fair and

reasonable’”.

The judge exraced rom he case law wo

lines o hough which he described as “The

English and Scosh schools” .

The ormer derived rom Henry Boo

Consrucon v Malmaison Hoel (1999) 70

Con LR 32, o he effec ha he conracor is

entled o a ull exension o tme or he

delay caused by wo or more evens,

provided ha one o hem is a relevan

even.

The laer derived rom Ciy Inn v Shepherd

Consrucon [2010] 136 Con LR 51, o he

effec ha he conracor only ges a

reasonably apportoned par o he

concurrenly caused delay.

Afer reviewing recen case law including DeBeers v Aos Origin (2010) EWHC 32764 and

Adyard Abu Dhabi v SD Marine Services

[2011] 136 Con LR 190, he judge came

down in avour o he ‘English School’.

Where here is a conracual exension o

tme clause o his kind and delay is caused

by wo or more effectve causes, one o

which is a Relevan Even, he conracor is

entled o a ull exension o tme.

His reasoning included he ollowing poins:

• Many o he Relevan Evens would

oherwise amoun o acs o preventon.

• Sraigh conracual inerpreaton

indicaed srongly ha i he Relevan

www.keatingchambers.comKCConstructionUpdate Spring 2013

The greatest interest lies in what the judge contributed to

the “substantial debate …as to how what is called

concurrent …causes of delay should be dealt with”.

The case o Waler Lilly & Co Ld v Mackay in he Technology

and Consructon Cour represens a sad, bu saluary lesson in

how no o organise and progress an expensive, subsantal

and complicaed consructon projec.

Philip Boulding QC


3

Evens have delayed he Works, he

conracor is entled o an exension o

tme or he whole period o delay caused.

There was nohing in he wording o

Clause 25 o sugges a reducton in he

exension o tme once causaton has

been esablished.

• The ac ha he Archiec has o award a

‘air and reasonable’ exension does no

imply apportonmen in concurren delay

cases, since he relevan es is one o

causaton.

Alhough he judge was prepared o gran

‘persuasive’ weigh o he Scosh Ciy Inn

case, he made he imporan finding ha i

was inapplicable in he English jurisdicton.

The view ha he conracor only ges a

reasonably apportoned par o he

concurrenly caused delay as an exension o

tme is hus incorrec in English law under

his conracual provision or anyhing

resembling i.

Requirements for lossand expense claim(i) The judge concluded ha here were

essentally wo conditons preceden:

he making of a tmely applicaton o

he Archiec

he provision of deails of he loss or

expense o enable ascerainmen o be

made

(ii) In considering he conracual

provision, i mus be borne in mind ha

mos o he maers giving a conracor

entlemen were he ‘aul’ or a leas

he risk o he employer, such as

variatons or lae provision o

inormaton or insructons. I is

necessary o consider wha he words

mean, wihou consruing hem againshe conracor.

The applicaton o he Archiec could

be made eiher when he conracor

had incurred or was likely o incur, i.e. i

could be prospectve (beore loss or

expense incurred) or rerospectve

(afer loss or expense incurred).

For tme relaed preliminary coss, he

conracor could wai untl i was clear

ha he loss or expense had been

incurred, so ha i he delay had no

ye happened, he applicaton need no

be made untl he exended preliminary

coss were acually susained.

For similar reasons, he Archiec may

no have o ascerain he loss or expense

untl acually incurred; his is imporan

in ha loss o head office overhead and

profi relaed o delay will generally no

be incurred untl he acual delay beyond

he original completon dae begins o

accrue.

(iii) The partes had disagreed abou wha

inormaton needed o be provided a

he firs and second sages. The judge

regarded i as “difficul and undesirable

o lay down any general rule as o wha

in every case needs o be provided ”,

which is unsurprising since every case

will depend upon is own acs.

I is, however, appropriae o bear inmind wha inormaton he Archiec

already has, or example, rom having

aended meetngs or receiving

numerous applicatons or exension

o tme.

All ha is required is ha he Archiec is

reasonably pu ino a positon o orm an

opinion on wheher direc loss and/or

expense has been or is likely o be

incurred because he regular progress o

he works has been affeced. So he

conracor could, arguably, ge away wih

providing less inormaton i he

Archiec is already well provided.

The applicaton need no be expressed in

money erms; quantficaton is optonal

raher han mandaory.

(iv) Entlemen o heads o loss and expense

claim would no be los because some o

he loss deails were no provided. The

conracor only has o submi deails

‘reasonably necessary’ or he

ascerainmen o he loss or expense. I

is no necessary o submi all backup

accountng inormaton, where he

conracual provision does no ask or i,

as here. An offer o allow inspecton o

records by Archiec or Quanty

Surveyor could be enough or hese

purposes.

(v) The judge was unwilling o consrue heclaims procedure sricly agains he

conracor, given ha he grounds or

he claims depended on he aul or risk

o he employer. The judge did no

accep as essental a long lis o iems

proposed by he deendan’s exper as

sandard in every case.

He regarded his as akin o saying ha

every conceivable deail mus be

provided and all evidence deployed; he

requiremen was only or ‘such

deails…as are reasonably necessary’. In

his case, here was a very deailed

breakdown o preliminary actvites,


www.keatingchambers.com KCConstructionUpdate Spring 2013



4

including sie saffing, emporary

accommodaton, elephones, sie

labour, emporary services and various

sundries wih raes or prices

individually shown and loss and

expense for preliminary iems could be

valued by reference o hese.

i) The judge rejeced he defence view of

wha is mean by ‘ascerain’ in he

conex of a loss and expense claim,

preferring he meaning ‘o deermine

or discover definiely or, more

archaically, wih cerainy’.

Ascerainmen would no necessarily

require a large amoun of deail or

supportng documenaton; he

conracor is no required o prove is

claim ‘beyond all reasonable doub’

which would no be a sensible or

commercial inerpreaton of he

conrac provision.

The fac ha he Archiec/Quanty

Surveyor has o be pu ino a positon

o be satsfied ha all or some of he

loss and expense is likely o be or has

been incurred does no mean ha hey

have o be ‘cerain’ in ha sense:

ultmaely, a ribunal will decide he

issue on he balance of probabilites.

is worh notng, as an aside, he judge’s

ew ha claim preparaton coss could ‘in

rinciple’ be a valid head of loss and

xpense, a poin on which considerable

oub has exised.

Global claimshe defendans conended ha WLC’s claim

r preliminary coss was a ‘global’ claim and

us no recoverable.

his resuled in he judge considering he

ell-known case law on he subjec fromrosby v Porland UDC (1967) 5 BLR 121

John Doyle Consructon v Laing

Managemen (2004) Sco CSOH 141 and

eromec v Peroleo Brasilerio [2007] EWCA

v 1371.

he judge warned ha care was needed in

tlising he expressions ‘global’ or ‘oal’

os claims.

ome of he cases, like Wharf Propertes v

ric Cumine {1988] 45 BLR 72, concerned

nking acual delay and he causes of

elay; simply because a conracor claims

l coss which i has no ye been paid does

o make he claim a ‘global’ or ‘oal’

os claim.

Wha is commonly referred o as a ‘global’

claim is a conracor’s claim which identfies

numerous poental or acual causes of delay

and/or disrupton, a oal cos on he job,

a ne paymen from he employer and a

claim for he balance beween coss and

paymen aribued, wihou more and by

inference, o he causes of delay and

disrupton relied on.

The judge was wholly unconvinced haWLC’s claim could be caegorised as ‘global’.

His analysis and conclusions on global cos

claims are of considerable ineres more

generally. They were as follows:

(i) Claims by conracors for delay and

disrupton relaed loss mus be proved

as a maer of fac. The conracor has

o demonsrae on a balance of

probabilites hree elemens:

ha evens occurred which entle i o

loss and expense

ha hose evens caused delay/

disrupton

ha such delay/disrupton caused he

conracor o incur loss/expense or

loss/damage.

The conracor does no have o

show, as a maer of principle, ha i

is impossible o prove cause and effec

in he normal way or ha he reason

for he impossibiliy is no he

conracor’s faul.

Subjec o any conracual resrictons

on how claims are o be brough, he

conracor merely has o prove is

claim on he balance of probabilites.

(ii) Once he conditons preceden of he

claims procedure are satsfied – and

he claim will be barred if hey are no

– he conrac does no preven he

ascerainmen of direc loss/expense

by appropriae assessmens.

(iii) I is open o conracors o prove he

hree elemens above wih whaever

evidence satsfies he ribunal and he

requisie sandard of proof.

sad, but salutary lesson


The judge was wholly unconvinced that WLC’s claim

could be categorised as ‘global’. His analysis and

conclusions on global cost claims are of considerable

interest more generally.

5

There is no se way o prove hese

elemens. For example, a claim

could be suppored or even esablished

by admission evidence or deailed

acual evidence which precisely linked

reimbursable evens wih individual days

or weeks o delay or wih individual

insances o disrupton and which hen

demonsraed wih precision wha ha

delay or disrupton evenually cos.

(iv) There is nohing in principle ‘wrong’

wih a ‘oal’ or ‘global’ cos claim, bu

here are added evidental difficultes,

which he claiman conracor will have

o overcome.

The conracor would generally have o

esablish on a balance o probabilites

ha he loss i has incurred, i.e. he

difference beween wha i has cos he

conracor and wha i has been paid,

would no have oherwise occurred.

I will need o demonsrae ha is

acceped ender was sufficienly well

priced o make a ne reurn and ha

here are no oher maers acually

occurring which caused he loss, oher

han hose relied on in he pleaded case.

I is no he case ha where a ‘global’ or

‘oal’ cos claim is advanced, he burden

o proo ransers o he deendan,

alhough i is always open o he

deendan o raise issues or adduce

evidence ha he ender was so low ha

he loss would have occurred anyway or

ha oher evens, no relied on by he

claim or which were he ‘aul’ or risk o

he claiman occurred and may have

caused or did cause all or par o he

loss.

(v) The ac ha one or a series o evens,

unpleaded or he risk or aul o he

conracor, caused or conribued, or canno

be proved no have done so, o he ‘oal’ or

‘global’ cos, does no necessarily mean ha

he conracor canno recover anyhing.

I all depends on he impac o hose evens

or acors. For example, where a conracor’s

global loss was £1 million, where i can prove

ha i would have probably made a ne

reurn bu or an overlooked and unpriced

£50,000 iem in he a cceped ender, is claim

would no ail simply because o he

underpriced ender.

The resul o he underpricing would simply

be he reducton o he ‘global’ loss by

£50,000 because ha would be he sum ha

he conracor would be unable o prove

would have been incurred in any even.

Similarly, i in such a siuaton evens occur

during he course o he projec which a re

he aul or he risk o he claiman conracor

and which caused loss or canno be

demonsraed no o have done so, his

would no resul in he rejecton o he

overall claim, excep o he exen ha hose

evens acually caused loss.

Where he ribunal can deduc rom he

‘rolled up’ or ‘oal’ or ‘global’ loss elemens,

or which he conracor canno recover loss,

wha is generally lef is he loss aribuable

o he evens or which he conracor can

recover.

(vi) There would be no need o go down he

‘global’ or ‘oal’ cos roue i he acual loss

aribuable o he individual loss can be

readily or practcally deermined. However,

conversely a ribunal may be more sceptcal

abou he ‘global’ cos claim i he direc

linkage approach is readily available bu is

no deployed, alhough his would no

mean ha he claim should be rejeced ou

o hand.



There is nothing in principle ‘wrong’ with a ‘total’ or

‘global’ cost claim, but there are added evidential

difficulties, which the claimant contractor will have

to overcome.



6

(vii) The argumen advanced by he defendan

ha a ‘global’ claim should no be allowed

where he conracor has himself creaed

he impossibiliy of disenangle-men of

he elemens of he claim is wrong and

unsuppored by auhoriy. In principle,

unless he conrac expressly disallowed

global claims, hey may be permissible on

he facs and subjec o proof.

(viii) In his case, even if i were he law ha a

‘global’ claim could no be allowed unless

i was impractcable or very difficul for

he claiman o allocae every penny of

loss o each pleaded and esablished

even, he positon was ha i was

impractcable or very difficul for WLC.

This was because he projec wasseriously disorganised adminisratvely on

he defendans’ side, wih remarkably

lile design a he ouse, hundreds of

variatons, hopelessly lae provision of

informaton and insructons and a

subsantal level of discord beween

defendans and mos of heir

professional eam mos of he tme.

On his basis, i seems ha conracors

are being given a ‘cautous green ligh’

o advance ‘global’ or ‘oal’ cos claims,

provided ha hey are aware of and

comply wih he judge’s qualificatons

se ou above.

Neverheless, a well-advised conracor

should stll submi a claim where every

possible aemp has been made o link

specific losses wih specific evens.

A conracor should only consider going

down he ‘global’ pah if he moreconventonal (and safer) pah o

recovery really canno be achieved.

ConclusionSo far as concurren delay is concerned, he ‘English School’ of hinking means ha where a delay

is caused by wo or more effectve causes, one of which is a ‘Relevan Even’ under he conrac,

he conracor ges a full exension of tme.

The Scosh School preference for apportonmen will no govern an English case. Requiremens

for loss and expense claims will be viewed pragmatcally by a ribunal; he conracor does no

have o prove is case ‘beyond all reasonable doub’. Ascerainmen of loss and expense means

ha such deails as are reasonably necessary mus be supplied.Global claims are no wrong in principle, alhough hey carry wih hem added evidental

difficultes for he claiman conracor o overcome. Who creaed he need for he global

approach is no relevan; in he Walter Lilly case, he judge aribued i in a ny even o he

defendans’ serious adminisratve disorganisaton.

The Walter Lilly case is a sad sory for he partes involved bu his does no a all reduce he

ineres and insructon available from sudying i.

It seems that contractors are being given a ‘cautious green

light’ to advance ‘global’ or ‘total’ cost claims… Nevertheless

a well-advised contractor should still submit a claim where

every possible attempt has been made to link specific losses

with specific events.

Philip Boulding QC

Call: 1979 Silk: 1996

Email: [email protected]



7


Call: 1983 Silk: 2002



Unlikely scenarios are conjured, and all

agree ha he law on he same is

obscure and difficul. I would

diffidenly sugges ha he ruh is a lile

more mundane, as Waler Lilly shows.

Firs, whaever legal philosophers migh say,rue concurrency is a rare beas indeed. The

mos helpul case, ollowed in Lilly , is Henry

Boo Consrucon (UK) Limied v Malmaison

Hoel 70 Con LR 32. The Cour was concerned

wih a jurisdictonal challenge o an Arbiraor.

The Conracor argued ha he Arbiraor

could no consider he Employer’s positve

case and ha he could only look a he evens

pleaded by he Conracor.

This propositon was, unsurprisingly, rejeced.

This is he conex or he well-known

saemen by he Judge, isel based on a

concession:

“..if here are wo concurren causes of delay,

one of which is a relevan even, and he oher

is no, hen he Conracor is enled o anexension of me for he period of delay

caused by he relevan even nowihsanding

he concurren effec of he oher even.

Thus, o ake a simple example, if no work is

possible on our sie for a week no only

because of exceponally inclemen weaher (a

relevan even), bu also because he

Conracor has a shorage of labour (no a

relevan even), and if he failure o work

during ha week is likely o delay he works

Where wo or hree consructon practtoners are gahered

ogeher, alk ofen urns o he impenerable myseries o

concurrency, global claims and he l ike.

beyond he Compleon Dae by one week, hen

if he considers i f air and reasonable o do so,

he Archiec is required o gran an exension

of me of one week...”

As one can see, here are a lo o ‘is’ in ha

passage: concurrency is ofen argued, bu rarelyheld o exis.

A Cour will almos always find ha one even

was more causatve o delay han anoher.

Secondly – and his is no an e ntrely rivolous

poin – one can also see in Lilly ha i is easier

or a very rich, sel-made, man o succeed in

litgaton han i is or him o ener he kingdom

o heaven, bu no by much.

As Akenhead J said a para 96 o Mr Mackay:

“he is a person who is used o geng his own

way” . No, i would appear, in his Lordship’s

Cour.

Finally, he Judge made clear ha global claims,

like any oher claims, are o be decided on a

common-sense basis.

There is no over-arching legal principle ha will

resolve such cases, and no guaraneed knockou

blow available o hose resistng such claims.

See para 486 o he Judgmen:

“…i can properly be concluded as follows in

relaon o ‘global’ or ‘oal’ cos claims:

(a) Ulmaely, claims by conracors for delay

or disrupon relaed loss and expense mus

be proved as a mater of fac…

(b) I is open o conracors o prove

hese…elemens wih whaever evidence will

sasfy he ribunal and he requisie sandard

of proof.

(c) There is nohing in principle ‘wrong’ wih a

‘oal’ or ‘global’ cos claim. However, hereare added evidenal difficules (in many bu

no necessarily all cases) which a claiman

conracor has o overcome…

(d) The fac ha one or a series of evens or

facors…caused or conribued…o he oal

or global loss does no necessarily me an ha

he claiman conracor can recover nohing.

In shor, practtoners should worry less

abou esoeric concepual difficultes, and

more abou ensuring ha hey can presen

aractve acual argumens on he meris.


It is easier for a very rich, self-made, man to succeed

in litigation than it is for him to enter the kingdom of

heaven, but not by much.

Plus ça change, plus c'est lamême merits?Some old chestnuts revisited



8


Mar c Rowlands QC reflects on taking

silk last year

Brief Encounters

Obviously, you received many congraulatons on aking silk. Wha is your

response o hose commenaors who regard he sysem as oudaed?

Well, some o i plainly is: he breeches and gold buckled shoes, or example, and he clerks bowing o me

when I arrive in Chambers. Bu in mos respecs he sysem is horoughly modern: i is ransparen,rigorous, an assurance o qualiy and is a he vanguard o he grea effors being made by he Bar generally

in he field o inclusiviy. I is also a recognised and respeced brand, partcularly inernatonally, which

aracs work o he Britsh jurisdictons.

The way of becoming a QC has changed. How was your experience of he modern

process?

I was he leas un I have had a he Bar. And ha includes regular appearances in he early 1990s as a

young junior in ron o His Honour Judge Harris in he Cenral London Couny Cour, so i aced prey

stff competton.

How do you see he role of QCs specifically a he Consructon Bar?

There are a number o roles and, in his respec oo, he sysem has modernised o mee he changing

demands o he marke. All cases a he Consructon Bar are a eam effor, and providing leadership, aking

responsibiliy and working effectvely wih ohers are all vially imporan.

Do you expec your practce o change significanly compared wih your days as a

Senior Junior?

No significanly: I enjoyed a prey senior senior junior’s practce (perhaps he archaic erminology needs

modernising!) by he tme I ook silk. Also, he distncton beween senior juniors and junior silks has

diminished in recen years as he ocus o dispue resoluton has shifed rom long rials o alernatve orms

o dispue resoluton and actve managemen o cases by ribunals.

9


Meet the New Silk

Marc Rowlands QC | Call: 1990 | Silk: 2012

Languages: French (spoken) Spanish (working knowledge)


Having been awarded scholarships

rom his Inn and a leading commercial

chambers, Marc chose o begin

practce in a general common law se in order

o learn he ar o advocacy.

This gave him experience in virually everyribunal in he counry, having conduced

crown cour jury rials, magisraes’ cour

prosecuton liss, inquess, couny cour and

High Cour rials, appeals o he Cour o

Appeal and Supreme Cour, Judicial Reviews in

he Divisional Cour, employmen and lands

ribunals and various proessional disciplinary

hearings.

He has appeared in numerous arbiratons

domestcally and abroad, and is called o he

Bar o he Bahamas. He is also a CEDR

accredied mediaor.

Marc began specialising in consructon work

when insruced by Clifford Chance as junior o

Lord Falconer in he C hannel Tunnel litgaton in

1994.

Since hen he has reained an ineres in rail

relaed work, and has advised and appeared as

advocae or rolling sock, inrasrucure,

operatng and regulaory bodies all over he

world (including he US, Canada, he Middle

Eas, Taiwan and Singapore).

More generally, since joining Keatng Chambers

in 2000 Marc’s practce covers all areas o

consructon and engineering dispues.

He has done cases involving all he major, and

many minor, sandard orms o building and

engineering conracs, in partcular he JCT,

NEC3 and FIDIC orms.

In additon o his repored cases, Marc’s

recen work includes dispues arising ou o he Dubai Mero projec, he Shinkansen high

speed rain nework in Taiwan, numerous

domestc dispues involving insolvency o one

or oher o he partes, drafing amendmens

o he NEC3 suie o Conracs in relaton o a

major gas inrasrucure projec, and

releasing rom arres a ship in Lisbon.

Marc is consisenly raed as a leader in his

field by Chambers and Parners.

Seminars and Publications

Keating on NEC3

Sweet & Maxwell, London 2012

The New Engineering Conrac 3rd Ediion has

received much aenion recenly.

Long endorsed by he UK's Office of

Governmen Commerce, i shared in he success

of London 2012 as he sandard form on which

much of he Olympics projec was buil.

For urher inormaton on papers and seminars please conache Clerksroom: [email protected]

To order a copy visi: www.sweeandmaxwell.co.uk

Preerred by he Instuton o Civil Engineers o is raditonal ICE

orms, conroversially dropped las year, is natonal and inernatonal

usage has been growing, despie critcism in he English cours.

Keatng on NEC3, new sablemae o Keatng on Consructon

Conracs and Keatng on JCT, comprises a deailed and auhoriatve

reamen o he constuen orms and clauses. I covers all he major

issues, including he Conracor's responsibilites, tme, paymen,

compensaton evens, erminaton and dispue resoluton.

David Thomas QC leads he auhor eam, comprising Krisa Lee, Adam

Consable QC, Rober Evans, Piers Sansfield QC, Justn Mor, Thomas

Lazur, Ben Sareen and Charloe Ellis.

Consructon Global Super Conference: San Francisco – 13h Dec 2012

Comparing Sandard Consructon Conracs Across he Globe

Nerys Jefford QC

Whiehall & Indusry Group: London – 7h Feb 2013

Workings of Public Procuremen

David Gollancz

Sociey of Consructon Law Annual Conference:Leeds – 1s Mar 2013

Consructon Law Updae

Jonahan Selby

NEC Conracs – a lawyer’s perspectve

David Thomas QC

Adjudicaton Sociey: Birmingham – 27h Mar 2013

Adjudicaton – No Paymen Notce?

Abdul Jinadu

Whie Paper Procuremen Conference:

London – 17h Apr 2013 & Mancheser – 23rd Apr 2013

Conracual Changes

Simon Taylor

Whie Paper Procuremen Conference: Belas – 25h Apr 2013

Prior Performance

Sarah Hannaford QC

Selected Recent Presentations

Forthcoming Presentations



10


What does the legislationay?rtcle 55(2) o Directve 2004/18/EC and

egulaton 30(6) –(9) o he Public Conracs

egulatons 2006 provide ha a conractng

uhoriy (‘CA’) may (no mus) rejec an ALT,

u only afer he CA has given he enderer

n opporuniy o explain is ender2.

he Directve reers o enders which ‘appear

be’ abnormally low; he Regulatons o a

nder which ‘is’ abnormally low. Oherwise

e wo provisions are, despie some

fferences in wording, he same in effec.

bnormally low’ is no defined.

has been argued (see or example Morrison

acilites Services Ld. v Norwich Ciy Council

010] EWHC 487) ha, whaever he

gislaton says on is ace, i means ha

As are required o identy and investgae

LTs, regardless o wheher hey inend o

jec hem.

ha positon appears o be suppored by he

dgmen in joined casesLombardini and

Manovani Case C-285/99 [2001] ECR I-9233,

which he European Cour said:

he conractng auhoriy is under a duy,rs, o identfy suspec enders, secondly o

low he underakings concerned o

emonsrae heir genuineness by asking

em o provide he deails which i considers

ppropriae, hirdly o assess he meris of he

xplanatons provided by he persons

oncerned, and, fourhly, o ake a decision as

wheher o admi or rejec hose enders.”

owever, i is apparen rom he conex ha

e Cour was no in ha case considering

heher here is a primary duy o identy

nd examine ALTs, bu expanding on is

revious observaton ha:

is essental ha each enderer suspeced of

ubming an abnormally low ender should

ave he opporuniy effectvely o sae his

oin of view in ha respec.”

Cerainly he legislaton does no expressly

impose such an obligaton on he CA. Nor – as

appears o be acknowledged by he judgmen

in Lombardini and Manovani – does i require

he CA o rejec an ALT even i he enderer

canno show ha i is economically viable3.

Tha consructon is suppored by he ac ha

he European Commission, when drafing he

Directve, had beore i he Opinion o he

Economic and Social Commiee o he

European Council4, which proposed ha:

“In he case of abnormally low enders…i

should be stpulaed ha conractng

auhorites are o examine enders which seem

o be abnormally low…I should be clearly

saed ha he enders in queston are o be

rejeced if adequae justficaton is no

orhcoming.”

The Commission did no implemen ha

recommendaton and i mus be supposed ha

i did no wish o impose hose obligatons.

Wha is he provision or? I appears ha

originally i was inended – like procuremen

law generally – o preven natonal preerence,

by proectng enderers rom having heir

enders unairly rejeced. I (or example) a

German company could undercu a Duch one,

on he basis o lower coss or more efficien

processes, is ender should no be rejeced

merely because is price was surprisingly low.

However, he provision has come o be seen

as proectng CAs rom enderers winning

conracs wih unsusainable prices; he risk

being ha he enderer will re-negotae

prices afer award, oppress heir workorce

or subconracors, or cu corners in

perormance. The European Commission has

saed ha his is a partcular problem in he

consructon indusry5. I has been suggesed

oo ha i prevens ‘predaory pricing’,

where a dominan underaking drives

efficien competors ou o he marke by

absorbing losses.

Who can enorce he obligatons? A enderer

who submis an ALT can enorce he CA’s

obligaton o investgae beore rejectng i.

Can a competor which has submied a

realistc ender enorce any obligaton

agains he CA, or example eiher o

investgae, or, having investgaed, o rejec

he ALT?

Tha will depend on he purpose o he

legislaton: i i is here only o proec low

enderers rom unair exclusion and CAs

rom being orced o accep non-viable

enders, here is no reason why oher

enderers should be able o enorce he

provision.

Bu i i is inended also o proec air

competton, arguably oher enderers

should be able o enorce6 – partcularly i i

can be argued ha an economically

unreliable ender canno, by definiton, be

he mos economically advanageous

(‘MEAT’).

It is essential that each tenderer suspected of submitting

an abnormally low tender should have the opportunity

effectively to state his point of view in that respect.

Abnormally low enders (‘ALTs’) creae serious risks – as was

demonsraed by he collapse o Connaugh plc in Sepember

2010 – bu he law abou hem is ambiguous. This artcle ses

ou he headline issues and argumens1.

Too Good to be True?

David Gollancz

Abnormally low tenders in public procurement

11


What have the casessaid?The cases in he European Cour assis very

lile: essentally hey have all re-emphasised

ha an ALT canno be rejeced unless he

enderer has been afforded a genuine chance

o justy is ender7.

They do make i olerably clear ha an ALT is

one which raises he suspicion ha he

enderer will no be able o deliver he

conrac on he erms endered, and hey say

explicily ha here is no universal rule o

deermine wheher a ender is abnormally

low. In all he cases, he cour has reaed he

baseline or comparison as he average o

oher complian enders. Tha may be

because, in hose cases, such a definiton was

se ou in domestc legislaton. I seems clear

hough ha comparison wih oher enders

canno be he only crierion or identying

an ALT.

I he definiton o ‘abnormally low’ is ‘oo

low o be economically susainable’, he

majoriy o enders migh be abnormally low

and a sole higher ender migh be he only

reliable offer.

One domestc case does ackle wo o he

hornier issues arising rom he legislaton. In

J Varney & Sons Wase Managemen Limied

v Herordshire Couny Council [2010] EWHC

1404 (QB), Flaux J firs concluded (expressly

disagreeing wih Arnold J in Morrison) ha

“neiher he Directve nor he Regulaton

imposes a duy o investgae so-called

suspec enders” .

Secondly, Flaux J noed ha he Directve

applies where a ender ‘appears’ abnormally

low, where he Regulatons reer o a ender

which ‘is’ abnormally low. Applying he

principle ha, EU legislaton prevails over

inconsisen domestc law, he concluded ha

such duy as does exis could only arise where

he conractng auhoriy “acually knows or

suspecs” ha he ender is abnormally low.

Varney was appealed bu no on hese issues,

so Flaux J’s robus findings sand, bu as firs

insance decisions only.

In he auhor’s view i makes no practcal

sense o say ha he obligaton o investgae

(i such a duy exiss) arises only afer he CA

has ormed he inenton o exclude he EO.

Untl he CA has investgaed he ender i is

no in a positon o orm such an inenton.

The ratonal sequence o evens –a leas

where he basis o award is he MEAT–is ha

he CA identfies a ender as abnormally low;

investgaes i; hen orms he inenton o

exclude i.

However, he CA is entled o accep an ALT

i i wishes – or example, in a shor conrac

or a non-essental service, he CA migh

decide ha he benefi o a low price

ouweighed he risk ha he conracor

would no be able o deliver.

When considering an ALT, CAs should ake

ino accoun all he acors suggesed above:

is he reliabiliy o he conracor a critcal

issue, or is a low price (or oher elemen)

sufficienly aractve o ouweigh any risks

o delivery? Is here he poental or

damage o air competton?

I so, how does ha poental damage

balance agains he possible benefis o he

auhoriy o a low ender?

Provided ha CAs do no rejec ALTs wihou

affording he enderer he opporuniy o

justy heir offer, and provided ha heir

decisions are reasoned (and he reasons

recorded), hey are likely o be able o

deend heir decisions.

Economic operaors wishing o challenge a

CA’s award o an ALT should prepare o

demonsrae is non-viabiliy, he risk o

harm o he workorce or supply chain and

he poental damage o air competton.

It makes no practical sense to say that the obligation to

investigate (if such a duty exists) arises only after the

contracting authority has formed the intention to exclude

the Economic Operator.

Too Good to be True?

Footnotes

1 Readers ineresed in reading a longer artcle on his subjec should conac he auhor’s clerk a [email protected]

2 The legislaton does no say so in erms bu makes i clear by illusraton ha he explanaton will be aimed a showing ha he low ender is

based on low inpus while meetng legal sandards concerning employmen

3 Where he basis o award is he mos economically advanageous ender, i may be questonable wheher a ender ha remains suspec afer i

has been explained can be he mos economically advanageous

4 CES 515/2001

5 Preventon, Deecton and Eliminaton o Abnormally Low Tenders in he European Consructon Indusry DG III 5 June 1999

6 There is a case or saying ha axpayers oo should be able o enorce his provision. I hey ear ha heir money is o be spen on, or heir

services provided by, an unreliable conracor, hey should be able o resor o judicial review o require he conractng auhoriy o investgae

7 Noe ha in Belass Case T-494/04 he Cour confirmed ha i is no only prices which may be abnormally low: oher elemens such as he

number o hours or personnel required o carry ou he conrac migh also be considered abnormally low

David Gollancz | Call: 2010 (admited solicior 1990) | Email: [email protected]



12


Hackney Empire Theatre v Aviva nsurance

Hackney Empire Theare is a fine

building and i pus on grea live

music, comedy drama and dance in

e Eas o London. Is laes long running

rama moved o he Wes End when is legal

spue wih Aviva Insurance reached he

age o he Cour o Appeal.

he ornae 1901 audiorium had become

lapidaed afer World War II bu a

reservaton rus go he heare up and

nning again by 1976. Afer years more und

ising and wih he help o he hen Sir Alan

ugar he heare se abou a major and

ricae renovaton projec in 2001. The JCT

998 orm o conrac provided or liquidaedamages or delayed completon. In he even

a he heare erminaed he conrac or

e conracor’s ailure o perorm, i had

ause 27, which provided or he drawing up

an accoun o monies owing or he work as

gains additonal coss and losses suffered.

owever, ha was wihou prejudice o he

eare’s oher righs and remedies.

viva provided he heare wih a

erormance bond ha promised o pay up o

sum ha was 10 % o he conrac price in

e even o deaul by he conracor.

he work ran ino delay, disrupton and

spuaton. The conracor said i could no

nance he work i is claims were no paid

nd hreaened adjudicaton.

Sir (now Lord) Alan Sugar mediaed and here

resuled a ‘side agreemen’ o make advances

agains he conracor’s claims, repayable i he

claims urned ou o be worhless.

There were o be hree insalmens adding up

o a million pounds; a racton o wha he

conracor alleged hey were worh. Two were

paid bu on he brink o paying he hird he

conracor abandoned he sie and hen wen

ino adminisraton.

The heare called he bond o help finance a

replacemen conracor bu Aviva reused o

pay. They said he bond had been discharged

by he making o he paymens or he making

o he side agreemen. The heare wen o law

o claim he money. Aviva relied on he rule in

Holme v Brunskill .

Tha was a nineeenh cenury case in which

i was held ha a bondsman is discharged i

he conrac he guaranees is varied wihou

his consen.

There was debae abou he scope o he rule

and in partcular wheher i caugh aleratons

in he way a conrac was perormed even

hough here was no acual variaton o he

obligatons o he partes. Aviva argued ha i

applied o advance paymens and ha was in

effec wha he heare had allowed he

conracor in his case.

They said he rule should apply because

here was less incentve or he conracor o

complee and so he bondsman’s securiy was

diminished.

UK Highways A55 Ltd and Others v Hyder Consulting UK

td and Hyder Consulting [2012]WHC 3505

Mr Justice Edwards-Stuart, TCCh December 2012

This was a claim in relaton o

proessional services provided by he

deendans on a projec or he

onsructon o a major road, he A55, in

orh Wales.

he firs deendans were he consulans

nd he second deendans heir guaranor.

ome years elapsed beween he issue o he

aim Form and he service o he Partculars

Claim. Questons arose as o wheher tme

n in he meantme and, i so, wheher an

xension o tme should be graned.

The claimans conended ha proceedings had

been generally sayed while he partes

discussed mediaton and oher maers and

ha i was hereore no required o serve he

Partculars wihin 14 days afer he service o

claim as prescribed by he CPR. The general

say conended or arose upon expiry o a

series o specific says ordered by he Cour.

The judge disagreed. A general say remains in

orce untl lifed, whereas a partcular say o

he dae or even auomatcally ceases when i

is reached, so ha proceedings resume and

tme begins o run again.

The effec in his case was ha he tme or

service had expired. Applying he provisions or

relie rom sanctons, he judge considered he

effec o he Claiman’s ailure o comply wih

he tme limi on each pary. O partcular

imporance was prejudice.

The Judge drew a distncton beween design

complains likely o be recorded in he

projec documenaton and supervision

complains which may depend on acual

evidence o wha occurred on sie.

Consructon ook place abou welve years

beore.

He imposed a conditon on he grantng o

he exension o tme disallowing hose pars

o he Partculars o Claim which raised he

supervision issue.

The claim would hus be confined o issues

which could be resolved by exper evidence,

raher han evidence o ac as o long-pas

evens.

Alexander Nissen QC appeared on behal o

Hyder Consultng

The Empire Strikes Back

The Long and Winding Road

Aviva’s argumens were rejeced. The cour

saed in clear erms ha he rule in Holme v

Brunskill applies o variatons o he conrac

guaraneed. Advance paymens under he

conrac migh have he effec o discharging

he bondsman i he had no consened.

However, ha was o be distnguished rom

he presen case, because he paymens

concerned were ouside he erms o he

original conrac.

On quanum Aviva relied on he well-known

case o Perar o conend ha hey could no

be liable or more han he value o

liquidaed damages ha had accrued due a

he dae o erminaton, he heare no

having drawn up he accoun reerred o in

he conrac. Tha argumen was also

rejeced, because claims o general damageswere preserved by he reerence o righs

under he conrac being wihou prejudice

o oher righs and remedies.

So – a riumphan las nigh or he heare!

And welcome clarificaton o he law. Bu is

he denouemen ye o come?

The judgmen o he Cour o Appeal is

subjec o an applicaton o he Supreme

Cour or permission or a second appeal.

David Thomas QC appeared on behal o

Hackney Empire Theare

13


Selection of reported cases involving members of Keating Chambers

Vertase F.L.I. Ltd v Squibb Group Ltd [2012]EWHC 3194The dispue arose from a conrac for

demoliton and removal of asbesos a an

indusrial sie in he Midlands.

The hearing concerned he enforcemen of an adjudicaton decision.

A firs adjudicaton decision had already

been enforced successfully by Squibb.

Verase sough enforcemen of a second

adjudicaton decision which would entle i

o liquidaed damages.

Squibb regarded his as inconsisen wih he

findings in he firs adjudicaton:

“he hrus of M. Sephens’s submissions is

ha … wha Verase managed o do was o

persuade he adjudicaor in Adjudicaton No.

2 o aler a conclusion which he had reached

in Adjudicaton No. 1.

Tha conclusion, she submis, formed par of

his reasoning ha led o his rejecton of

Verase’s claim.”

The judge confirmed ha since he firs

adjudicaton “was final and binding on he

partes untl finally deermined by litgaton

or arbiraton, i was no open o he

adjudicaor o change i.”

Verase’s applicaton was refused.

Jessica Sephens for Squibb Group

Alstom Power Ltd v SOMI Impianti SRL [2012]EWHC 2644The case concerned enforcemen of an

adjudicaor’s decision and declaratons as o

he ownership of sub-conracor’s

equipmen brough o he Pembroke PowerSaton sie o carry ou mechanical and

piping erecton.

The dispue was beween he main

conracor, Alsom, and an Ialian sub-

conracor SOMI Impiant and cenred on

wheher legal tle in he goods and

maerials had passed o Alsom under he

sub-conrac provisions following

erminaton.

Justn Mor for Alsom Power

Simon Hughes QC for SOMI Impiant

Jacobs UK Ltd v Skidmore Owings & Merrill Ltd (No. 2) [2012] EWHC 3293

This litgaton arose ou of a selemen

agreemen.

Par of he agreemen referred o Skidmore

Owings & Merrill (SOM) a warding conracs

o Jacobs, and if his was no done, furher

sums became payable.

SOM offered work in Saudi Arabia o Jacobs,

who declined.

The cour had o inerpre he meaning of

‘award’ and wheher he agreemen was o

offer work o Jacobs, or wheher i was

acually o ener ino conracs.

Richard Harding QC for

Skidmore Owings & Merrill

Mears Ltd v Shoreline Housing Partnership Ltd [2013] EWHC 27The case concerns a responsive mainenance

agreemen, le under he NEC3 erm

service conrac by Shoreline Housing

Parnership (SHP).

Mears won he conrac on he basis of aendering exercise carried ou under he

public procuremen regime. The dispue arose

over pricing arrangemens and a deducton

made by SHP from he paymen due.

SHP had referred o adjudicaton issues as o

he relatonship beween price payable and

he conracual Price Lis Codes.

Mears commenced litgaton, claiming ha

SHP was esopped by he saemens and

conduc of is represenatves from

wihholding deductons or relying on he

codes and ha i was entled o damages for

misrepresenaton.

SHP applied o srike ou he claim and o

obain summary judgmen. The judge

concluded ha he case would ultmaely urn

on facual findings and he evidence of he

winesses.

Marc Rowlands QC for Shoreline Housing

Parnership Ld



14


In 2002 his auhor suggesed ha he

approach o concurren delay which had

hen recenly been recognised in he

enry Boo Consructon (UK) Limied v

almaison Hoel (Mancheser) Limied [1999]0 Con LR 32 QBD (TCC) case would ordinarily

e appropriae.

nce hen, a subsantal body of opinion has

merged which suppors ha approach.

owever, wo cases in Scoland have

ggesed ha he approach of apportoning

elays would be preferable; and here have

een suggestons ha he same approach

ould be adoped by he Cours of Hong Kong

nd in Ausralia.

he Meaning of ConcurrentDelay

2002, he wrier proposed he following

efiniton of concurren delay:

he expression ‘concurren delay’ is used o

enoe a period of projec overrun which is

aused by wo or more effectve causes of

elay which are of approximaely equal

ausatve poency.”

ha definiton has since been approved

dyard: Abu Dhabi v SD Marine Services

011] BLR 384 a [277] and adoped: Keatng

n Consructon Conracs, 9h Editon

aragraph 8-025; Hudson’s Building andngineering Conracs, 12h Editon,

aragraph 6-059.

will be noed ha he focus is on he poin

tme a which delay impinges on he

rogress of he conracor’s works. In Royal

rompon Hospial NHS Trus v Hammond (No.

(2000) 76 Con LR 148, His Honour Judge

chard Seymour QC pu forward a narrower

efiniton which would require he

oincidence in tme of he occurrence of he

vens in queston as well a s heir effecs.

Ciy Inn v Shepherd Consructon [2008] BLR

69 a firs insance, Lord Drummond-Young

id ha he had some difficuly wih he

stncton sough o be drawn by Judge

Seymour. In he same case on appeal, he

Inner House of he Cour of Session agreed.

The distncton beween concurrency of

causes and he concurrency of he effecs of

delay has been recognised. Plainly here is

room for a distncton beween sequental

evens which cause concurren delay, on he

one hand, and coinciden evens which cause

concurren delay, on he oher.

Preliminary Considerations

The Prevention Principle

A number of commenaors have suggesed

ha in reviewing he correc approach o

concurren delay i is necessary o have regard

o he preventon principle, by which if one

pary’s conduc prevens he oher from

completng on tme, he pary responsible

canno claim liquidaed damages.

For presen purposes here are wo imporan

feaures of he preventon principle o be

borne in mind. Firs, i has long been acceped

ha he principle applies unless he conrac

expresses a conrary inenton. Second, i is

open o he partes o adop exension of tme

machinery which relieves he conracor of

delay occasioned by acs of preventon wih

he effec ha here is ordinarily no need o

have recourse o he preventon principle.

Before examining how he preventonprinciple migh affec he argumens, i is

necessary o address a recen suggeston ha

he preventon principle has no applicaton in

cases of concurren delay. In he Adyard case,

Hamblen J. held ha a pary seeking o rely

upon he preventon principle mus esablish

ha acual delay was, on he facs, caused by

he partcular acs of preventon relied upon.

Subsequenly, in Jerram Falkus Consructon

Ld v Fenice Invesmens Inc. (No. 4) [2011]

BLR 644, Coulson J. held, obier, ha he

preventon principle does no apply in cases of

concurren delay.

However, here are some difficultes wih his

conclusion. Firs, Hamblen J. did no go s o far

as o hold ha he preventon principle was

inapplicable in cases of concurren delay.

Second, no ratonale is offered for

distnguishing beween cases of concurren

delay and he oher cases of conracor-caused

delay referred o. The suggeston appears o be

ha he preventon principle applies where heemployer’s ac is he sole cause of he relevan

period of delay bu no when he same ac is

one of wo concurren causes.

This queston involves wo separae issues. The

firs concerns wheher he preventon principle

depends on he employer’s ac being he sole

cause of delay in relevan period, as opposed

o being a concurren cause. On ha iss ue, he

wrier’s preferred view is ha expressed by he

ediors of Hudson as follows:

“Thus, i is well esablished ha an Employer is

no entled o liquidaed damages if by heir

acs or omissions hey have prevened he

Conracor from completng heir work by he

completon dae. Wheher concurren wih

anoher Conracor delay or no, here is no

reason why he principle should no be he

same.”

The second queston concerns he relatonship

beween he preventon principle and he

erms of he conrac agreed beween he

partes. As already poined ou, he preventon

principle applies unless he conrac expresses

a conrary inenton. In he wrier’s experience,

i is rare o find such expressions of conrary

inen. Cerainly, i is difficul o find any suchexpression in he JCT Sandard Form.

Accordingly, i is assumed here ha he

preventon principle does apply even in cases

of concurren delay. On ha basis, i is

necessary o have regard o he preventon

principle in considering he correc approach.

The obverse problem

The second preliminary consideraton is he

poental for inconsisen moneary cross-

claims. A conracor’s claim for prolongaton

coss may be me by he employer’s cross-

claim for liquidaed damages for he sa me

delay which will be aribued o he need for

he conracor o rectfy his defectve

workmanship.

Concurrent Delay Revisited

ohn Marrin QC

he purpose of his paper is o discuss, once again, he

orrec approach o conracors’ claims arising ou of

oncurren delay in he executon of consructon projecs.

15


Logic suggess ha, in he absence o

apportonmen, boh claims canno succeed.

Unless he losses are o be apportoned,

common sense demands ha one claim mus

succeed and he oher mus ail. On ha basis

a choice is required. This is sometmes

reerred o as ‘he obverse problem’ .

The success o he employer’s counerclaim

or liquidaed damages is inversely relaed o

he success which he conracor achieves on

his exension o tme claim. I ollows ha no

approach o he queston o exension o tme

is likely o be accepable unless i

accommodaes he obverse problem.

But-for causation

The hird preliminary consideraton again

arises ou o he iner-relatonship beweenclaims or tme and claims or compensaton

or delay. I is necessary o have regard o

conventonal ess o causaton. Where

concurren delay occurs during consructon

works, employers ofen deend conracor’s

moneary claims, relying on he ‘bu-or’ es

o causaton.

I has ofen been observed ha he bu-or

es is a necessary bu no a sufficien es o

causaton. I is also well recognised ha here

are cases where he cours regard i as

appropriae o relax he rule.

O he differen approaches ha have been

suggesed, some a leas would involve a

relaxaton o he bu-or es. In reviewing he

argumens, i is hereore necessary oconsider wheher he partes can be aken o

have inended ha.

Apportionment

In Scoland, he apportonmen o risks was

firs pu orward in he Laing Managemen

(Scoland) Ld v John Doyle Consructon Ld

[2004] BLR 295.

Reerring o a conrac which s ubsantally

adoped he Scosh Works Conrac (March

1988), Lord McLean said:

“…we are of he opinion ha apportonmen of

loss beween differen causes is possible in an

appropriae case. Such a procedure may be

appropriae in a case where he causes of he

loss are ruly concurren, in he sense ha boh

operaed ogeher a he same tme o produce

a single consequence.”

This view was affirmed by a majoriy o he

Inner House o he Cour o Session on appeal.

A similar approach was aken by Lord

Drummond-Young in Ciy Inn a firs insance.

The approach o apportoning such risks has,

however, no received much suppor in

England.

The Cour o Appeal did apporton damages in

Tennan Radian Hea Ld v Warringon

Developmen Corporaton (1998) EGLR 41

reatng he maer as one o causaton bu

alhough he decision was ollowed by H is

Honour Judge John Hicks QC (albei wih some

reservatons) in Lamb v Jarvis (1998) 60 Con LR1, he Cour o Appeal’s decision has been

doubed no only by he Law Commission in

Working Paper No 114 on Conribuory

Negligence as a Deence in Conracs bu also

by he Cour o Appeal in Hi-Lie Elecrical Ld v

Wolseley UK Ld [ 2010] BLR 225. In Bank of

Nova Scota v Hellenic Muual War Risks

Associaton (Bermuda) Ld [1990] 1 QB 81A,

he Tennan Radian Hea case was held o be

a decision on is own acs and distnguishable.

However, he practce o perming

apportonmen in cases or damages o breach

o conrac is well esablished in Canada

and here are indicatons ha he same

practce will be ollowed in New Zealand and

in Hong Kong.

Neverheless, i is submied ha here are

difficultes wih he apportonmen approach.

Firs, here are practcal problems over he

basis or he apportonmen.

In he Ciy Inn case, Lord Drummond Young

made clear ha he conemplaed ha

precisely he same approach should be aken

in apportoning boh tme and loss as o he

apportonmen o liabiliy in conribuory

negligence. However, in he John Doyle case,

Lord Macadyen had aken a raher differen

approach o he apportonmen o tme

providing or equal divison o responsibiliy.

In he Ciy Inn case, reliance was placed on he

use o he expression ‘air and reasonable’ in

he JCT Sandard Form o justy he use o a

air and reasonable apportonmen. I has

been suggesed ha his places oo much

weigh on he words used. Wording which

clearly prescribes he basis or apporton-

men is notceable by is absence rom mos

sandard orms o conrac. The JCT

Sandard Form is no excepton.

A second and relaed difficuly wih he

apportonmen approach concerns he

preventon principle. I is implici in a finding

o concurren delay ha wo or more causes

have given rise o delay during he same

period. I one o hose causes is an ac o

preventon on he par o he Employer, he

exension o tme machinery will no be

effectve o avoid he applicaton o he

preventon principle unless he conracor is

graned an exension o tme or he wholeperiod. However, i he delay during he

period is apportoned beween he partes,

perhaps on a 50:50 basis, he conracor will

no receive a ull exension o tme and he

preventon principle will come ino play.

I is or his reason ha several commena-

ors have suggesed ha he apportonmen

approach should be rejeced.

The Dominant Cause Approach

In he 1980s, i was common or employers

o argue ha, in cases o concurren delay,

he decision maker, (archiec, engineer or

arbiraor), mus choose beween he

competng causes o delay according o

which is “dominan” or “predominan”.

The ratonale offered or he dominan cause

approach is based upon he presumed

inenton o he partes, as evidenced by he

erms o he conrac. The argumen is ha

he scheme o he conrac leads inexorably

o he conclusion ha he partes mus have

inended any partcular period o delay o be

aribued o one and only one cause. The

roo o he argumen lies in he obverseproblem, described above. I multple causes

o delay are recognised, here will be cases

in which he conracor’s claim or

prolongaton coss will be me by he

employer’s cross claim or liquidaed

damages in circumsances where, logically,

boh canno succeed.

The 9h editon o Keatng suggess ha he

dominan cause approach has received

suppor in recen years rom he decision a

firs insance in he Ciy Inn case, based on

he decision o he Inner House o he Cour

o Session in he John Doyle case, alhough

here is room or doub wheher he judges

were offering suppor o he dominan cause

approach as oulined above. I is hough


It has often been observed that the but-for test is anecessary but not a sufficient test of causation. It is alsowell recognised that there are cases where the courts regardit as appropriate to relax the rule. Of the differentapproaches which have been suggested, some at leastwould involve a relaxation of the but-for test.



16



ore likely ha hey were doing no more

an reflectng he common experience o he

ibunal ha argumens abou concurren

elay ofen all away when he acs are

xamined.

he firs difficuly wih he dominan cause

pproach is a practcal one. In a case o

oncurren delay, i will be implici in he

ndings o ac ha here was more han one

use o delay o approximaely equal

usatve poency.

gains ha background, i is difficul o see

ow he decision-maker, wheher an

chiec, an engineer or an arbiraor, is o

lec he cause which is o be characerised

dominan.

his approach does no solve he problem

here here is no one dominan cause.

he second difficuly wih he dominan cause

pproach is ha i calls or a relaxaton o he

u-or es o causaton. The justficaton or

ch a relaxaton – indeed he ratonale or

e dominan cause approach isel – is ha

ny oher soluton is liable o give rise o he

bverse problem, described above. However,

explained below, i is hough ha he

pproach adoped in he Malmaison case

qually avoids ha problem.

he hird difficuly wih he dominan cause

pproach is ha i is liable o come ino

onflic wih he preventon principle. I he

xension o tme clause is implemened on

e basis ha conracor-deaul is he

ominan cause o delay, i will no afford he

onracor relie or delay caused by he ac o

reventon and he resul will be ha he

reventon principle will come ino play. Time

ill be se a large, unless he conrac

xpressly provides oherwise.

he Malmaison Approach

he 8h editon o Keatng summarised he

almaison approach as ollows:

hus i now appears o be acceped ha aonracor is enled o an exension of me

owihsanding he mater relied upon by he

onracor is no he dominan cause of delay,

rovided only ha i has a leas equal

ausave poency’ wih all oher maters

ausing delay.

he raonale for such an approach is ha

here he pares have expressly provided in

eir conrac for an exension of me caused

by cerain evens, he pares mus be aken o

have conemplaed ha here could be more

han one effecve cause of delay (one of which

would no qualify for an exension of me) bu

neverheless by heir express words agreed

ha in such circumsances he conracor is

enled o an exension of me for an effecve

cause of delay falling wihin he relevan

conracual provision.”

Suppor or he Malmaison approach has been

ound in Seria Ld v Sigma Wireless

Communicaons Ld [2008] BLR 79, De Beers

UK Ld v Aos Origin IT Services UK Ld B [2010]

134 Con LR 151, Waler Lilly & Co Ld v MacKay

[2012] EWHC 1773 (TCC).

For he purposes o he presen discussion,

here are hree eaures o he Malmaison

approach which are worh notcing. Firs, by

conras wih he oher approaches discussed,

he Malmaison approach involves lile risk o

alling oul o he preventon principle.

Second, alhough, in connecton wih

exension o tme, he Malmaison approach

requires a relaxaton o he bu-or es o

causaton, i is hough ha here is a robus

justficaton or such a relaxaton. I is required

because, as already noed, in a case o

concurren delay (as defined) he conracor is

never in a positon o show ha he would have

compleed on tme bu or he even relied

upon. The justficaton or such a relaxaton is

ha i is necessary o avoid a resul which runs

conrary o he partes’ expressed inenton.

Third, he Malmaison approach i combined

wih a conventonal approach o he proo o

causaton in relaton o he conracor’s

moneary claims, can be relied upon o avoid

he obverse problem.

Prolongation Costs

Three possibilites are identfied as ollows:

• The conracor succeeds only i he even

relied on is shown o be he dominan

cause o he delay

• The partes’ delay coss are apportoned

• The conracor ails because he canno

satsy he bu-or es o causaton

I he dominan cause approach is he correc

approach o assessing a conracor’s exension

o tme claim, i is no difficul o accep ha

he same approach will be appropriae or an

assessmen o he associaed conracual claim

or prolongaton coss.

Bu reasons or doubtng wheher he

dominan cause approach can be he correc

approach o an exension o tme claim have

been given above.

Similarly, i he apportonmen approach is he

correc approach o questons o exension o

tme, hen i is easy o see why he same

approach migh be applied o an associaed

money claim. Bu again, he difficultes wih he

apportonmen approach have already been

poined ou.

A hybrid approach has been suggesed, he idea

being ha he decision-maker migh apply he

Malmaison approach o he exension o tme

claim and hen apporton he moneary claims.

However, i is suggesed ha ha would no

necessarily achieve he inended resul and, i is

suggesed ha he hybrid approach is unlikely o

find avour.

The hird possibiliy is ha he conracor ails

because he canno satsy he bu-or es o

causaton. Recen suppor or his approach is

o be ound in he De Beers case.

Reasons have already been advanced or

supposing ha i may be appropriae o relax

he bu-or es o causaton in relaton o

conracors’ exension o tme claims. I is no

unknown or he es o be relaxed in he case

o coss arising ou o delay o a consructon

conrac, where he cause is a conrac-breaker

oher han he deendan.

However, here is no auhoriy – and, i is

suggesed, no compelling reason – or relaxing

he bu-or es where he wo partes responsible

or he damage are, respectvely, he claiman

and he deendan.

For hese reasons, i is suggesed ha, in he case

o moneary claims brough under he conrac, i

is he hird o he hree possibilites mentoned

which is he mos likely o find avour. Tha

oucome coincides wih he provisions o he

Sociey o Consructon Law’s Delay and

Disrupton Proocol; and i also coincides wih he

conventonal approach o such problems applied

by ribunals in he USA.

Conclusion

In expressing any conclusion, i is necessary o

reurn o wo poins made earlier. Firs, in a

discussion such as he presen, here is one ruh

which can scarcely be over-emphasised. The

answers o he questons raised will depend on

he erms o he conrac which governs he

relatonship beween he partes. Second,

experience shows ha insances o concurren

delay as discussed here acually a rise only rarely.

© John Marrin QC 2013

This arcle is an abridged version of he paper

given by he auhor o he Sociey of Consrucon

Law, London on 4h December 2012.

ohn Marrin QC

all: 1974 Silk: 1990

mail: [email protected]

17

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