Professional Documents
Culture Documents
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
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:
Devlin approach If a breach of contract is one of two causes of a loss, with both causes
cooperating and both of approximately equal efficacy, then the breach is sufficient to carry
judgment for the loss (Heskell v Continental Express Ltd [1950], 1 All ER 1033 per Devlin J).
dominant cause 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 they
establish 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.
burden of proof The claimant must effectively prove that 'but for' the defendant's breach of
contract, they would have suffered no loss.
tortious approach The claimant recovers if the cause upon which they relied 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).
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
subcontractor) 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 [1918] A.C. 350.
The dominant cause approach has also found favour in the opinions of Lords MacLean, Johnston and
Drummond 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 [1918] A.C. 350.
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 and also most recently in City Inn Ltd v Shepherd Construction
Ltd.
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.
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 they
are satisfied that Party B was an effective cause of the delay.
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 [2001] Q.B. 388. 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. This approach was recently validated in the case of Walter Lilly and Co Ltd v Mackay [2012]
EWHC 1972 (TCC).
In the Malmaison case, Dyson J 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 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 subcontractor 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
Protocol: Hunting Snarks Const. L.J .2003, 19(3), 135-143 published 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
subcontractor'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 subcontractor 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 subcontractor's
entitlement to an extension of time. A subcontractor'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.
This 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.
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:
marked-up drawings;
progress photographs;
general correspondence;
concrete-pour records;
as-planned v as-built;
as-planned impacted;
collapsed as-built;
windows analysis;