3 minute read
DELAY AND DISRUPTION WHAT’S THE DIFFERENCE?
David Daly, Director at HD Construction Solutions, considers the differences between delay and disruption
We often get clients telling us they have been delayed and disrupted without realising that these are distinct issues which are assessed differently. The words ‘delay’ and ‘disruption’ are often used interchangeably in construction disputes without parties really knowing the distinction between the two. It is often assumed that delay leads to disruption and disruption leads to delay, thus a cycle of additional time and cost is incurred on projects that go wrong. This is a common misconception.
What is delay?
Delays to construction projects are a common feature of the industry and plenty of time and money is spent arguing over who is responsible for them.
Whilst delays often occur on activities on projects, not all of these events will delay the project completion date. Those that do are known as ‘critical’ delays. Employer risk events that sit on the critical path may give rise to an entitlement to an extension of time (“EOT”) and compensation to the contractor. An example of this is when an employer is late giving possession to the contractor. Conversely, delays to activities that do not sit on the critical path, although not extending the completion date, might lead to reduced productivity on that activity (a potential disruption claim).
Where a contractor is in culpable delay, usually there is no entitlement to an EOT or compensation. An example of contractor culpable delay could be a lack of labour to start the works when possession is given to it by the employer.
There are some rare instances of truly concurrent delay where both the employer and contractor are in delay concurrently and those delays are of similar causative potency. Whilst employers and contractors are commonly in some delay at the same time, often these delays (a) do not sit on the critical path and (b) are not of equal causative potency. A good example of when a truly concurrent delay arises is if an employer fails to give the contractor possession on time but that contractor is unable to commence the works in any event. In such circumstances, the usual position is that the contractor gets additional time but not money.
The principal benefit of proving a delay claim is (a) it provides relief to the contractor from liquidated damages and (b) it opens the door to the contractor for compensation for its time related costs.
What is disruption?
Contractors’ profit margins are often negatively affected by events on site making it more expensive to undertake the works than anticipated. As noted, it is important to understand that disruption is separate and distinct from delay although both often overlap. Disruption does not always lead to delay (although it often does). As the Society of Construction Law notes, disruption is the:
A contractor might experience various disruptive events in the currency of its works that do not necessarily fall on the critical path and therefore do not extend the completion date e.g. an electrical contractor returns to carry out its second fix activities only to find that the dry lining contractor has not closed up the walls (the disruptive event), thus requiring a return visit. Let’s say the electrician loses half a day waiting for the dry liner to complete this activity – it is this half day that is the lost productivity and ultimately, the loss incurred by the electrical contractor. This event occurred on a flat that was not on the critical path at that time meaning it did not cause a delay to the completion date. If then you take that disruptive event and multiply it by 100 similar occurrences, it is easy to see how disruption can soon lead to substantial losses on the project whilst not necessarily delaying it.
In our next article we will examine how to prove these claims.
