Construction Law

Allocation of Concurrent Delay Damages on Construction Projects

By John P. Ahlers

When delay events interact, that is when two events or parties cause a delay to the critical path at the same time, the issue is often whether the concurrent delays can be apportioned between causes or parties.

Concurrent Delay Defined:

The simple definition of concurrent delay is the occurrence of two or more independent delay events within the same time period or delay period.  Concurrent delays can effect both the owner and contractor or the contractor and its subcontractors in a lower tier relationship.  The delay events can relate to one activity or multiple activities.  Concurrent delays may effect a contractor or subcontractor's claim if one delay event is excusable (is an event for which a time extension is warranted, but no damages are due, such as a weather event) and the other is not, or if one such event is compensable and the other is noncompensable.

Where such conflicting causes of delay exist, the entitled to time or money may be threatened.

Apportioning The Delay:

Courts have generally taken three approaches to analyzing claims when contract performance is delayed due to concurrent causes.

• The traditional view has been that if delays were inextricably intertwined, there is no recovery. For example, generally, an owner is prevented from assessing liquidated damages against the contractor where both the contractor and the owner are responsible for a delay event. The contractor is similarly not entitled to damages.
• The modern approach is to determine whether the delay can be apportioned between the parties. If the delay can be allocated among the parties, the court will allow proportionate fault to govern recovery, akin to a comparative fault analysis.
• A related way of looking at concurrent delays, utilizes a network or critical path method (CPM) to identify and determine critical path delays and the party responsible for those delays. Under this analysis, the courts can segregate the delays along the critical path and allocate the delay to the responsible party.

Segregating the Delay Impact Costs:

To segregate delay impacts and costs requires scouring the project records to identify discreet acts of delay and making a determination as to whether the delay is excusable or compensable.  In making the segregation, absolute certainty regarding the exact apportionment of damages is generally not required.  See Alcan Electrical & Engineering Co. v. Samaritan Hospital, 109 Wn. App. 1072 (2002).  Any concurrent delay analysis is very fact sensitive and often very complex.  Proving or refuting concurrent delay requires an accurate and updated network or CPM schedule and apportionment of concurrent delay costs is most often performed by construction claim experts.

Full post as published by Construction Law Blog on March 03, 2008 (boomark / email).