Often there is a tendency to assume that financial recompense automatically follows an extension of time. However, whilst the extension of time and loss and expense clauses are clearly related, it is not necessary the case that time and money claims are linked. This often comes as disappointing news for contractors leading to lengthy and costly disputes. To avoid this happening, it makes sense to employ a fair and equitable means of determining who is responsible for the effects of any delay events that might arise.
In order to so this, it is necessary to establish what happened and why. However, from a practical standpoint, this is likely to be a complex matter because, unless the project is a simple one, there is unlikely to be a single cause of delay; indeed there may be concurrent delays and some delay events may be more significant than others (i.e. a dominant cause of delay). Consequently, any delay analysis will be dependant for its success on the quality of the information and records available, and the skill, experience and objectivity of the delay analyst. Where the contractor is also in delay at the same time as the employer, the contractors entitlement will be affected. Therefore, extensions of time for instructions issued by the architect after the contract completion date when the contractor is in culpable delay must be calculated on a net basis following the judgement in Balfour Beatty Building Ltd v. Chestermount Properties Ltd (1993).
Standard forms of contract allow for the extensions of time to be granted for delays which are not the fault of the contractor. However, individual contract forms treat the issue of extension of time differently. For instance, under JCT 2005, the contractor is entitled to an extension of time for relevant events where the contract completion date is likely to be delayed, whereas under ICE 7, extensions of time are granted after the cause of any delay has arisen.
An important consideration with regard to both extensions of time and delay and disruption is the long standing legal principle of mitigation. Consequently, where there is delay and / or disruption, an implied term of the contract will require the contractor to mitigate his loss. This means that the contractor in non culpable delay cannot just sit back, rub his hands together and wait for the money to pour in from the employer. The contractor must employ a fair and reasonable means to reduce the impact of the circumstances in question.
Whether you require support in the preparation of an Extension of Time submission, or you require a ‘forensic’ assessment of what actually happened on site to mount or counter a construction dispute, we are on hand to assist you.
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