There is no general rule of law as to the circumstances under which a contractor is entitled to an extension of time: it is a question of construction of the time provisions in the contract.4 It is therefore essential for employers to draft clear and certain provisions defining the events following which a contractor may be entitled to additional time to complete the works, in order to protect “their right both to a fixed […] completion date and to deduct liquidates damages”.5 In the absence of clarity, the courts may have to imply a term to provide “business efficacy” to the contract.6 That said, even when such provisions are sufficiently clear and enable the parties to deal effectively with the matter, most disputes about time arise after the works have been completed, as a “wait and see” approach continues to be the norm when assessing extensions of time. A decision maker may have to reach a conclusion based on what actually happened and not solely on what was sufficiently understood at the time. The courts will base their conclusions on legal principles and common sense. However, some of those principles may not be in harmony with the parties’ risk apportionment under the contract. The numerous High Court-level cases seem to point in varying directions. In some, particular approaches have been undermined by judicial decisions, leading to uncertainty concerning how time entitlement should be assessed by the parties.7 This has caused speculative parties to take a commercial advantage to operate extension 
of time provisions in a way that militates against the principle of reaching a “fair and reasonable” result, creating a disconnect, which is not a satisfactory result.

NEC imposes a positive obligation on the contractor to notify the project manager of an event that has happened or is expected to happen, and if it does not:

Similarly, the FIDIC form states that:

It is evident that both NEC and FIDIC fulfil both conditions stated in Bremer and the relevant provisions should clearly be considered a condition precedent. By contrast, under JCT, there is no stipulated strict time limit in which the contractor must serve its notice to the employer nor is it stated to be a loss of right in the event of a failure to comply with such provision.

Previous JCT forms required the notice to be served within a reasonable time. The meaning of this phrase was considered in London Borough of Merton

v Stanley Hugh Leach Ltd,15 where it was held that “it must not be made so late that the architect can no longer form a competent opinion […] that the contractor has suffered the loss or expense claimed”.16 This implies that the fact that no precise timing is stated does not by default mean that the contractor is under no obligation to serve notice. This conclusion was supported in Steria Ltd v Sigma Wireless Communications Ltd,17 where Davies J held that a wording to the effect of giving notice within a reasonable period gave rise to a condition precedent even though no express words to that effect were included. The basis for determining what a reasonable period is depends on the facts of the case.18 Consequently, JCT seems to be more open to interpretation and the specific facts of the case, although the additional reference to “receiving a notice” before fixing the completion date clarifies that it is also a precondition to entitlement.19 However, complications may arise where the contractor is late in notifying, or where the notice is deemed invalid under the requirements stated in the contract.

In the latter case, there are two possible outcomes. First, the employer has no right to claim damages for the consequences of an obligation it has breached irrespective of a notice requirement being fulfilled.21 Winser argues that it is unconscionable for the employer to levy liquidated damages for the consequent delay, unless the employer unknowingly caused the delay.22 Alternatively, the risk remains with the contractor until it exercises its contractual right, so it is not automatically entitled to additional time. Morris concludes that the delay is in fact caused by the contractor’s failure

to trigger its entitlement to additional time.23 In Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd (No 2) 24 Jackson J held that the main concern is that otherwise a contractor could benefit by simply disregarding the notice machinery, thereby setting time at large “with impunity”.25 This is the current position in English law.

This has attracted criticism. Jones argues that it results in the employer’s risk being implicitly transferred to the contractor by non-compliance with an administrative requirement.26 Coggins points out that if an employer does not provide access for the contractor, the fact that the latter has not issued a notice does not change the effect of the delay caused by the employer.27 Stephenson highlights that it does not transmute into something different, nor does it break the chain of causation.28 At best, the contractor’s delay as a result of its failure could be considered to have not stopped the delay but cannot be deemed the precursor of the delay.29 The courts have also expressed their reservations to a strict interpretation of a condition precedent. In Obrascon Huarte Lain SA v Her Majesty’s Attorney General for Gibraltar 30 Akenhead J stated that he could see no reason why a condition precedent clause was to be construed strictly against the contractor “given its serious effect on what could otherwise be good claims for instance for breach of contract by the Employer”.31 A contractor may be unable to claim an extension due to an event over which it has no control and which may even be the result of an employer’s instruction for additional work.32 The condition precedent clause was upheld but the court softened its application by allowing the contractor to raise a notice when the delay “started to be incurred”.33 Recently, however, in Panther Real Estate Development LLC v Modern Executive Systems Contracting LLC 34 the Court of Appeal of Dubai challenged the findings in Obrascon, concluding that the contractor cannot choose the point at which the notification of the claim can be made: it must be issued within the period of becoming aware of the potential delay.35 The reasoning for this

decision is that “delay to the contractual Time for Completion only occurs when the works are not completed by the contractual completion date” which would render the purpose of notification entirely ineffective.36 However, actual delay can occur on day one of a project. If the employer does not provide access, the contractor remains obliged to complete the works before the completion date, and therefore it is equally entitled to the whole period to complete the works.37 The fact that after a delay, the works could be completed on time does not change the fact that these were critically delayed at the outset of the project. Non-compliance with a procedural obligation places the contractor in a vulnerable position. Why is it so crucial for the employer to be notified of a delay when it is itself the party causing it?

Employers, particularly in major construction contracts, are not parties who possess little knowledge of what the construction process entails. Rather, they are sophisticated organisations demonstrating sufficient expertise and competence to have a thorough understanding of the processes involved in construction and are even supported by highly qualified consultancy firms acting in the role of contract administrators.43 Furthermore, delay risk events are commonly managed by early warnings and a continued review process

involving both the contractor and the employer.44 Collaborative features such as early contractor involvement and partnering also play a significant role in managing these risks.45 Major changes are scrutinised before they are formally instructed. These risk management procedures have even become a binding common feature of some standard forms of contracts,46 with the sanction for non-compliance being the reduction of any potential extension of time by assessing the entitlement as if the early warning had been given.47 Despite that, a separate formal notice to claim entitlement is still required within a strict period.48 In Glen Water Ltd v Northern Ireland Water Ltd,49 Keegan J acknowledged that “the failure to notify prevents a claim being made […] may seem harsh when commercial parties anticipated that a claim might come to pass”.50 Although the parties had had multiple discussions regarding the potential claim event which were recorded in numerous meeting minutes over a substantial period of time, those did not constitute a proper notification of the claim and the contractor’s claim was time-barred. The formal notice should have been raised as a separate notification. The court prioritised commercial certainty as “an overarching consideration”51 since the introduction of a condition precedent represents the intention of the parties to freely 
agree to their contractual terms and should be given full effect.52

It appears difficult to reconcile a scenario in which, having been early involved in risk meetings, an employer could claim to be unaware of any potential ramifications of its actions simply because it has not been formally notified by the contractor. Actual knowledge should defeat the position argued in Multiplex.53 Normal site communications should be sufficient for that purpose.54 In such a scenario, it is at best arguable that the purpose of a formal notice seems more related to an opportunistic strategy to defend any potential claims than to the necessity of dialogue to determine the extent of the delay. A contractor’s failure to formally notify ought to not render the employer’s breach irrelevant.

The English courts have concluded that if time bars do not displace the prevention principle then their purpose becomes irrelevant, which would militate against the agreement of the parties.55 However, construction

contracts have careful risk allocation, and acts of prevention are at the employer’s risk.56 Shifting the blame to the contractor defies that risk allocation57 and would mean that the contractor has unknowingly accepted that risk58 which “would require very clear language”.59 Time-bar provisions play a crucial role in construction but they are not of such cruciality that a failure to comply overrides the risk allocation agreed by the parties.60 Risk allocation should take precedence if a conflict arises, so the outcome of displacing the prevention principle must be regarded as unintentional.61

Under JCT, the Contract Administrator shall no later than 12 weeks after the date of practical completion give details fixing the completion date for the works or, in other words, decide whether any extension of time claimed by the contractor is warranted.64 This provision is not subject to a notice so it acts as a power to dispense with any procedural requirements to grant an extension of time.65 Similarly, FIDIC has recently introduced a provision whereby a time-bar clause can be waived by a Dispute Adjudication Board (DAB) which can award the contractor additional time, irrespective of whether a notice was validly issued, providing late submission is justified.66 One of the mitigating factors stated in this provision is whether the employer had prior knowledge of the event in question.67

In other jurisdictions, standard forms have also introduced a discretion to temper the effect of non-compliance with a notice requirement in the case

of a claim for an extension of time. Swedish ABT06 General Conditions of Contract waive the obligation to serve a notice in circumstances where the employer was aware or ought to have been aware of the effect.68 Australian AS 4000-1997 confers a “reserve power” to grant an extension of time to the contractor irrespective of whether it has complied with the notice provisions in the contract.69 In Peninsula Balmain Pty Ltd v Abigroup Contractors Pty Ltd 70 Hodgson JA held that this power should be conditional on a duty to act fairly and impartially in the exercise of that discretion resulting in the contractor being granted an extension of time in circumstances where relevant events, for which the employer would be at fault, caused the works to be critically delayed.71 In Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd 72 McColl JA affirmed the reasoning in Peninsula and applied this principle to extend time notwithstanding that a notice provision had not been followed.73 Such power should be disconnected from any failure to notify under the contract to avoid the prevention principle argument, but it should not be viewed as an “absolute” power which excludes an obligation to act reasonably.74 Recently, in Growthbuilt Pty Ltd v Modern Touch Marble & Granite Pty Ltd 75 Henry J held that if a clause confers an absolute power there is no obligation on the superintendent to extend or make any decision whether or not to extend. The issue of prevention principle would not arise in that case.76

The courts have also shown a degree of leniency and applied alternatives to a strict rejection of an extension of time claim. These range from the contractor bearing any costs resulting from that delay to applying a reduction arguing that had the employer been notified, it would have been able to mitigate the delay. In Hervey Bay (JV) Pty Ltd v Civil Mining and Constructions Pty Ltd 77 an employer had granted an extension of time but rejected a claim for delay costs as a result of an expired claim. Similarly, a contract may expressly specify that non-compliance with a notice provision will prevent the contractor from claiming “consequential delay costs”.78 Some forms of contract have tested this approach and may reduce entitlement to account for the effect of a non-timely notification.79

That said, as Jones clarifies, a condition precedent should be enforced for a failure to notify a “neutral” delay such as that due to a force majeure or bad weather and no discretional extension of time should be granted, as

entitlement in those cases should be proactively sought by the contractor.80 The discretion should only apply to those delays caused by an employer’s act of prevention, which would result in the employer being paid liquidated damages by the contractor if no extension of time is granted.81 Bell highlights that this apportionment of responsibility would focus on the function of the remedy of liquidated damages, namely to compensate the employer for delay caused by the contractor.82 This approach would enable a decision-maker to retrospectively assess any extension of time based on the period of delay caused by an employer’s act of prevention.83

There should be no reason to argue that a contractor would gain an advantage by not giving notice for an extension of time in anticipation of subsequently raising an argument of prevention. As discussed in the next section, a contractor significantly benefits from dealing with claims early as the facts are fresh and information readily available.

Under JCT, the contractor is required to give particulars of the expected effect, “including an estimate of any expected delay in the completion of the Works beyond the relevant Completion Date”.87 The certifier must make a determination and notify the contractor “as soon as is reasonably practicable and in any event within 12 weeks of receipt of the required particulars” or before the completion date, whichever is earlier.88 Similarly, under FIDIC, the contractor is entitled to an extension of time “if and to the extent that completion … is or will be delayed” by an event for which the contract states it is not responsible.89 After the contractor has complied with the notice requirements under the contract, the Engineer is then required to “agree or determine […] the extension (if any) of the Time for Completion (before or after its expiry)”.90 NEC deals with extensions of time in a more prescriptive way, as it sets out the point at which the assessment shall be carried out as a “dividing date” that separates the work done (actual) from the work not done (forecast). It is defined as either the date of a project manager’s communication or the date of the contractor’s notification of a compensation event.91

In practice, it seems reasonable to promote a prospective analysis for the interest of the project as a whole, as applications for additional time can be granted at the earliest opportunity.92 It provides the parties with certainty over the duration of the project, resetting any rights and obligations under the contract.93 The courts have also been supporters of this prompt approach to dealing with time issues, as the contractor “can replan the remaining works in the most efficient way by deploying resources or resequencing the works”.94 However, there is a significant weakness. The determination is largely done on a theoretical basis, by estimating the extent of delay, so in a dispute forum, after the actual effect is known, the English courts have been critical of prospective assessments performed after the event.95

FIDIC similarly includes a provision to review or adjust any previous entitlement already awarded:

This begs the question of why there is a proviso preventing the reduction of entitlement in these forms of contract?98 The answer must be certainty. Parties need to know when the project will be completed to enable the works to be planned efficiently. In practice, however, the inability to reduce the entitlement creates an undesired rigid contractual framework. When a contractor claims an extension of time on a prospective basis, the employer may fear awarding too much time until the actual effect of the delay is known, without the power to adjust it downwards later. The potential consequence is overpaid costs for the extended period and the loss of its right to claim any delay damages.99 This is known as a “wait and see” approach which militates against the primary purpose of extension of time provisions.100

What would the effect be if a potential reduction could be applied? Taking cost management as an example, if an inflated interim payment application is submitted during the course of the project, the certifier may decide to award the claimed sum in the knowledge that it could still resort to a final account reconciliation through which any necessary adjustments can be made.101 The contractor is eventually paid what it actually deserves. The same rationale can be applied to time management. If, for example, a contractor was awarded an additional 10-week period, but then a retrospective review proved that it was only entitled to an eight-week period, two weeks would be deducted. There may be an argument that, as a result of the additional

10 weeks, the contractor “paced itself” to gain a commercial advantage of any windfall already awarded. Standard forms contain provisions that would prevent this scenario by compelling the contractor to carry out the works “with due diligence”.102 Another possible argument is that the contractor may be retrospectively deprived of time which might lead to liquidated damages being levied for a period that had already been accounted for as “excusable delay”. In such a scenario, the principle held in Balfour Beatty Building Ltd v Chestermount Properties Ltd 103 would apply whereby an extension of time would only be retrospectively awarded for periods of “excusable delay” by deducting any periods for which the contractor is deemed responsible.104 Specific periods of entitlement relating to specific excusable events would consequently be added to the completion date. The outcome (length of the extension) would be a matter of fact and degree with the burden of proof falling on the employer.105 No additional cost would be incurred as expert evidence would have to be provided if the parties disagree on the extent of the extension awarded or if no extension at all had been previously awarded. The benefit of enabling a reduction outweighs such potential complications as it defuses the much more common scenario in which no entitlement at all is given, by enabling the certifier to give incremental extensions of time with the safeguard that a subsequent adjustment can be done, once the true impact can be measured.

In Healthy Buildings and ICI, however, neither party operated the contract as stipulated, so it is suggested that the courts resorted to the compensatory principle set out in The Golden Victory 113 by which events that have occurred after the breach reducing the claimant’s loss must be taken into consideration to prevent over-compensating.114 It is yet to be seen what the outcome would be if a compliant claimant disputed the entitlement awarded. Case law suggests that a retrospective method of analysis would still be preferred.115 That outcome would, however, severely undermine the agreement of the parties under NEC by which the contractor takes the risk of an inadequate forecast and potentially being under-compensated as a result.116 The courts should not interfere with the risk allocation freely agreed by the parties, even when the results may differ from reality. The alternative is for NEC to incorporate a clear provision under which a prospective assessment is mandated when one party has strictly complied with the contract. That would deter unscrupulous parties from using tactics trying to escape previously agreed terms signed just because the outcome does not turn out in their favour.

However, such a review can only increase a previously awarded extension of time to provide certainty of when the work will be complete. The fact that no reduction is allowed defeats the purpose of any reassessment, as an employer could in practice simply do nothing until the actual entitlement can be measured. The restriction is not practicable and does not provide a workable mechanism. The provisions should be tailored to allow the parties to reassess once the true effect is known, irrespective of whether the result leads to a reduction. Pacing or other arguments relating to a lack of reasonably expected performance can be resolved by way of factual assessment based on expert evidence. At the very least, this procedure would enable the parties to move on and avoid falling into the trap of an early dispute.

Under NEC, in a dispute after the event, there is legal authority that a retrospective assessment will be carried out irrespective of the approach prescribed in the contract. To protect a compliant party, a provision should be incorporated to restrict the power of the courts to use any other records issued at a later stage. The agreement of the parties should be respected and not undermined simply because one of them has decided not to follow it. By doing so, the ethos of NEC of resolving claims whilst the issue is fresh would be preserved, thereby recognising the value of compliance with the contract.

Under NEC, it is widely acknowledged that no concurrent delay exists, as the analysis of the effect of a compensation event is carried out prospectively at the time it occurs, so the actual effect of the contractor’s delay (lack of progress) cannot be fully ascertained.124 Under FIDIC, there is a general statement addressing concurrent delay but it does not describe the process to be followed and merely refers to “be assessed in accordance with the rules and procedures stated in the Special Provisions”.125 Under JCT, no express reference to concurrent delay is identified. The Contract Administrator has a wide measure of discretion in how to assess concurrency. That may involve apportionment, which has divided opinions amongst practitioners.126 If no express provision has been included, the Malmaison approach will generally be followed under English law. The rationale is that the parties have implicitly agreed through the extension of time provisions that “the contractor is entitled to an extension of time for an effective cause of delay”.127

Accordingly, it would appear that the principle emanates directly from the contractual provisions. This view is shared by commentators who suggest that the principle is about risk allocation,128 which infers that under JCT at least, concurrent delay should be considered as a “neutral event” in which

the loss is shared.129 Others believe that the outcome of “all or nothing”130 when applying the Malmaison approach, leads to an unbalanced position.131 In The Royal Brompton Hospital NHS Trust v Hammond (No 7), Seymour HHJ held that if by reason of a contractor being already in delay, the effect of a relevant event does not extend beyond the already delayed date, “the relevant event simply has no effect upon the completion date”.132 In Adyard, Hamblen J approved this principle and concluded that “the act relied on … must cause some actual delay”.133 This has been known as the “first in time” approach and has successfully been used to defend extension of time claims by employers.134 In Thomas Barnes & Sons plc v Blackburn with Darwen Borough Council, Davies J 
recently decided that two events were “effective causes of delay”, even though one event arose first and extended even after the effect of the other had ceased.135 This decision appears contrary to the previous approaches in Hammond (No 7) and Abyard. As a result, there is uncertainty as to the precise circumstances in which two events will be held to be concurrent. This was acknowledged in North Midland Building Ltd v Cyden Homes Ltd 136 where “differences of view expressed in both the first instance cases and the textbooks” were noted, but left unresolved.137 Can standard forms of contract alleviate this situation and provide certainty to the parties?

In North Midland, an express term dealing with concurrency was agreed by the parties, which negated the Malmaison approach resulting in the contractor not being entitled to an extension of time for any period of concurrent delay. The Court of Appeal approved the validity of the clause so it is now established precedent that the parties can decide the principle by agreement. Some commentators suggest that this will increase the number of expressed concurrent delay clauses added to construction contracts.138 This author considers the potential increase in expressly stated concurrent delay provisions in contracts, to be not only an advantage that will increase certainty, but it should also be the way forward for standard forms of contract. As Coulson LJ stated, “there is no reason in principle why a workable concurrency clause could not be agreed”.139 In other jurisdictions, the courts have also held that if the parties have agreed an approach to concurrent

delay, this must be respected.140 In Australia, standard forms of contract already incorporate clear provisions by which the approach to concurrent delay is understood. Australian AS 4000-1997 states that if concurrent delay arises, “the Superintendent shall apportion the resulting delay”, according to the contribution of each party.141 Accordingly, standard forms of contract should follow the approach in North Midland of including express provisions describing how concurrency should be assessed, thereby providing certainty to throw this debate into oblivion.

Opinions are divided on the legal basis under English law on which to support such constructive acceleration claims. Lane points out that a claim could be based on an implied instruction to accelerate by the certifier’s wrongly refused extension of time request.145 Gusman argues that it could also be based on a claim for a breach of contract by demonstrating that the certifier has failed to fulfil an obligation under the contract.146 Conversely,

Bailey argues that it is difficult to attribute the breach of contract to the employer, as there is no express instruction to accelerate and the certifier is not a party to the contract.147 Unless an employer directly influences or exerts pressure on the contractor to accelerate, it is unclear how the employer could be held liable for a wrongful administration of the contract by the certifier. This is reflected in the greatly reduced number of available decisions under English law in which a claim directly or indirectly based on “constructive acceleration” has ever succeeded. In Amex Process and Energy Ltd v Stork Engineers BV 148 a contractor was allowed to recover as damages the additional costs of the measures implemented to overcome the effect of a breach of contract by the employer.149 In Great Eastern Hotel Company Ltd v John Laing Construction Ltd and Another 150 the court endorsed acceleration measures that were “adopted in order to mitigate [the employer’s] losses and as such the costs […] are recoverable from the contract breaker”.151 However, in Ascon Contracting it was held that a contractor cannot claim damages as a result of an extension of time and simultaneously, as a loss by way of mitigation “unless it is alleged and established that the attempt at mitigation, although reasonable, was wholly ineffective”.152 Perhaps the most relevant case is Motherwell Bridge Construction Ltd (t/a Motherwell Bridge Storage Tanks) v Micafil Vakuumtechnik 153 where a claim for acceleration costs was accepted under the circumstances of a refusal to grant an extension of time.154 However, the legal basis for the decision was not stated.

The general position of English law concerning how a contractor should deal with a “constructive acceleration” scenario has been clearly described by the Court of Appeal. In Lubenham Fidelities and Investments Co Ltd v South Pembrokeshire District Council,155 the argument that the employer was obliged to intervene and correct the certifier’s defaults was rejected, concluding that the “one simple remedy available [to the claimant] was to go to arbitration”.156 Accordingly, if a contractor considers that it is entitled to an extension of time, it should make use of the dispute resolution machinery included in the contract. This principle was reaffirmed in Pacific Associates Inc v Baxter and Others 157 in which Purchas LJ emphasised the mechanism is set within the “contractual provisions in the contract which afforded an avenue enabling the contractor to recover from the employer”.158 Adjudication is available under JCT

and NEC both as an express contractual provision159 and as a statutory right for those construction projects under the umbrella of the Construction Act.160 It provides a speedy and binding resolution of any dispute as to the contractor’s entitlement.161 Similarly, under FIDIC, the contractor can apply to obtain a DAB decision, which after the amendments made in the 2017 Edition, would provide a binding decision on both parties,162 who shall promptly give effect to it, irrespective of whether a notice of dissatisfaction is given.163 This can be referred directly to arbitration if the other party fails to comply.164 It is therefore apparent that any inclusion of an express clause to enable a constructive acceleration claim would provide little added practical benefit to the contractor under these standard forms of contract.

Accordingly, unless expressly stated in the contract, it would appear that the answer to the contractor’s dilemma is not to embark on a voyage into the unknown under the flag of “constructive acceleration”, but rather to seek recourse through the existing dispute resolution procedures available in the contract to demonstrate its entitlement to additional time.

To provide further flexibility this author recommends the Australian and Swedish approaches are followed. Time entitlement should not be conditional on the issue of a notice in circumstances where an employer’s act of prevention is the cause of the delay. A discretion should be given to the certifier to assess whether the employer was aware of the consequences of its actions and, if so, assess the claim based on its merits fairly and impartially. 
A notice should still be considered as a condition precedent for neutral events outside the employer’s responsibility and for which the contractor should proactively activate its right to additional time. The following wording should be included:

Standard forms that include a retrospective second stage assessment, such as JCT or FIDIC, should permit a reduction to be made with the onus of proof falling on the employer. Arguments around the contractor pacing the works should be resolved by resorting to those provisions relating to due diligence already contained in the contract. The following wording is proposed:

Those standard forms that solely prescribe a prospective assessment should reinforce that methodology by unreservedly mandating such an approach when one party has fully complied with the provisions thereby preserving the agreement made by the parties. A proposed wording for NEC could be:

Finally, following the Swedish approach, an express provision for constructive acceleration could potentially be incorporated in the standard forms of contract revised in this paper, however, this would have very little practical utility for the resolution of disputes after the decisions in Lubenham. Contractors can typically seek recourse via adjudication under JCT or NEC, whether by statute or contract, or via DAB under FIDIC which provides a speedy resolution of a potential refusal to award a genuine extension of time to the contract.