Construction Alert: Revised Protocol for Delay and Disruption claims published

Mar 16 2017

Publications

The Society of Construction Law (SCL) has just published a revised version of the Delay and Disruption Protocol (the Protocol), a widely referenced document in construction disputes around the world.  The revised version provides valuable guidance for construction professionals on how best to prepare for and make delay and disruption claims.

What is the Protocol?

The Protocol was first published in October 2002 in order to provide guidance to parties when dealing with claims for cost or time for delay and disruption claims, both at a project level and in court proceedings.  It was developed by members of the United Kingdom and Welsh SCL and therefore reflects the UK law, but is widely used internationally, including in Australia.

An example of this was the 2012 decision of the Supreme Court of South Australia in Alstom v Yokogawa Australia Pty Ltd (No 7)2 wherein Justice Bleby made repeated references to the Protocol and rejected a delay analysis favoured by one expert programmer primarily on the basis that it was “not mentioned in the Protocol as a recognised method of delay analysis”.

Since 2002 there have been significant changes to the way in which construction disputes are resolved.  These changes are a result of numerous factors such as an increase in the number of large scale construction projects, technological developments, and the further emergence of adjudication as a method of dispute resolution in the construction industry.

In response to these changes, the new version of the Protocol was published in February 2017.

What has changed?

It is a truism that the law is ever evolving in order to reflect an ever changing society.  It should therefore come as no great surprise that the Protocol required updating after 15 years in operation.  What is somewhat surprising, however, is the limited scope of the changes.  In our view, this demonstrates the robustness of the Protocol and bodes well for the future operation of this revised edition.  A summary of the major changes that arose out of this review is set out below.

Removal of “time impact analysis” as the preferred method

Time impact analysis is a method of delay analysis where (in short) the particular delay event is inserted into a construction program showing the state of the works at the time of the event, to see what impact the delay event has on the date for completion.

Previously, the Protocol stated that this method was “the preferred technique to resolve complex disputes related to delay…”3 however, the Protocol now simply sets out the different methods and the factors parties should consider when determining which method to utilise.  This was an important issue in a recent Supreme Court of Queensland trial in which Thomson Geer acted for the plaintiff contractor, where time impact analysis was shown to be inappropriate in certain circumstances.

Global claims and concurrent delay

The approach to global claims and concurrent delay has been updated to align with recent English case law, by which the courts have demonstrated a more lenient approach to global claims and an insistence upon “true concurrency”, being two concurrent events which both effectively cause delays to completion.

Consideration of claims during project

The Protocol now provides that the submission and assessment of extension of time claims during the course of a project is a “core principle” of the Protocol.  Naturally, parties should endeavour to make and assess extension of time or cost claims contemporaneously with the delay event.

Record keeping

The revised version of the Protocol outlines guidance on record keeping in relation to delay and disruption issues, focussing on general issues that apply to all projects.  Naturally, it is vital for parties seeking to prove delay or disruption that sufficient records be kept to demonstrate, for example, the impact on production caused by a disruption event.

Model clauses

The first edition of the Protocol contained “model clauses” which could be inserted by parties into contracts.  Those clauses have now been deleted as the intention of the Protocol is to provide guidance on making and responding to delay and disruption claims, but not on initial contracting.

What does this mean for me?

It is a rare project that does not suffer delay or disruption at some stage.  Unfortunately, however, in our experience delay and disruption claims are also widely misunderstood and commonly unsuccessful.

While it may be impractical to expect all contract administrators and project managers to have a deep appreciation for the various methods of delay analysis outlined in the Protocol, there are some obvious steps that you can take to bolster your prospects of success.  These include ensuring that:

  • reliable and incontrovertible records are kept, ideally showing production on a day by day basis;
  • construction programmes meeting the contractual requirements are updated regularly and accurately to show the true state of the works and are provided to the superintendent or principal for approval; and
  • claims for EOTs and delay costs are made promptly and in accordance with any contractual notice requirements or “time bars”.

The above steps, coupled with an appreciation of delay analysis including as set out in the Protocol, will ensure the best chance of successful delay and disruption claims for all contractors.

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Congratulations to Brisbane Partner, Andrew Kelly, who has been recognised by his peers as a ‘leading construction lawyer’ in the 2017 Construction and Real Estate Expert Guide, one of only three Queensland based construction lawyers to be recognised.

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For further information please contact:

Andrew Kelly | Partner | +61 7 3338 7550 | akelly@tglaw.com.au
Andrew Mackintosh | Senior Associate | +61 7 3338 7551 | amackintosh@tglaw.com.au

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1The SCL has published a list of judicial references to the first edition of the Protocol which can be access from its website at https://www.scl.org.uk/resources/delay-disruption-protocol.
2[2012] SASC 49; also see SMEC Australia Pty Ltd & Anor v McConnell Dowell Constructors (Aust) Pty Ltd & Ors (No 3) [2012] VSC 557 at [126] and 620 Collins Street Pty Ltd v Abigroup Contractors Pty Ltd (No 1) [2006] VSC 490 at [55].
3 The Delay and Disruption Protocol 1st edition at [4.8].