Contractors Ahead on Points in Round 2
by John Stocker
Similarly to the historic boxing match in Kinshasa, Zaire in 1974 between George Foreman (the undefeated heavyweight champion) and Muhammad Ali (the former champion), where Ali was considered the 4-1 underdog, and was widely predicted to take a clobbering, the battle between Employers and Contractors as to who should be entitled to relief if they are equally responsible for a period of delay under a construction contract, continues.
The latest blow in this match has been handed down by the Rt Hon Lord Justice Coulson in the decision in North Midland Building Ltd v Cyden Homes Ltd  EWCA Civ 1744,  BLR 565, 180 Con LR 1
Unlike the Rumble in the Jungle (as the fight between Ali and Foreman became aptly known) there are several outcomes in the battle for time between an Employer and Contractor in a contract to finish a project on time.
The Contractor can finish late or early with liquidated damages being applicable often in the former. If prevented from finishing on time by the Employer, the Contractor can either be entitled to an extension of time (if agreed in the contract) or time will be at large (broadly meaning he can’t be penalised).
A third set of possibilities arise when both the employer and contractor are responsible for causing a delay which runs concurrently and arises from independent events meaning each could be said to be at fault giving rise to a decision that might be seen to be unfair however well made. Under this circumstance, Justice Coulson aptly said that “either result may be regarded as harsh on the other party” in his decision in North Midland.
It took 8 rounds for Ali’s rope-a-dope strategy to land a decisive knock-out blow to Foreman causing a major upset victory. One can only fathom that it might take several rounds for the law to hand a decisive victory to either the Employer or Contractor in their own battle given Coulson J in North Midland reversed the round 1 view that the Contractor should benefit set out in Henry Boot Construction (UK) Limited v Malmaison Hotel (Manchester) Limited  EWCA Civ 17,  2 All ER (Comm) 960, however this decision was based on absence of a provision dealing with concurrent delay.
In fairness to Justice Coulson, the clause in North Midland was unambiguous and clearly put the risk in the corner of the contractor and based on the principle that parties to a contract are fully entitled to allocate risk to either, that such a clause was not unfair. Coulson J also confirmed that the prevention principle, where one party is thwarted from complying with obligations by the other, is not an overriding rule of public or legal policy. Round 2 to the Employer.
Ali’s strategy of leaning on the ropes allowing Foreman to punch his arms and body earning few points as the second round commenced, sapped Foreman’s energy all the way to the eighth round. As Foreman began to tire, Ali took his opportunity to sting and landed a deciding blow sending Foreman to the canvas hearing only the dull sound of numbers rolling through the air.
One would be short-sighted to assume that the decision in North Midland is anything but a deciding blow to either in the battle for a concurrent shared period of delay in a construction project.
With the principle in North Midland essentially resting on a clear and unambiguous allocation of risk and the unsettled fairness arguments either way, it is hardly surprising that standard forms are hesitant to include a clause dealing with concurrent delay and decisively go one way or the other.
FIDIC, for example, includes a way the parties can decide the issue while other forms leaves it entirely up to the parties to fight it out, much like the referee at the Rumble in the Jungle.
Whatever transpires, one gets the feeling that it might come down to the strategy which either Employers or Contractors adopt in dealing with this issue and the party that tires first from the match, might ultimately, find itself flat on the canvas.
John Stocker is a specialist construction, engineering and major projects lawyer with 18 years of experience advising in the ﬁeld and who speaks regularly at conferences and seminars and has published several articles.
John is admitted to practice in England and Wales (2003) and in the High Court of South Africa (2002).
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