Construction Disputes – Delayed Works

What happens if a project is delayed?

Construction projects often involve issues surrounding delays to the works. Unfortunately works do not always go to plan and disputes can arise in a number of ways.

What is a dispute over delay?

A construction contract should set a date for completion of the project. If it does not, it is important to consider if it has been provided elsewhere by written or oral agreement.

If there has been no agreement, the job must be completed within a “reasonable time”.

If the contractor has passed the date for completion, the starting point will likely be that it is in breach of contract. A dispute may arise regarding whether the contractor has acted diligently through the project.

Claims can materialise by an employer wanting their property back or claiming liquidated damages (these are fixed damages for late completion). This often forms a ‘counter claim’ by an employer when a contractor claims payment for its works. On the other hand, a contractor may claim for more money caused by delays caused by another party.

Is the contractor entitled to more time?

Ideally, the contract will include provisions governing extensions of time to which the contractor may be entitled and the contractor will obtain these throughout the project. These provisions should specify whether notice of the extension is required before and as a condition of the extension being granted.

Unfortunately, this does not always happen in reality, and it becomes necessary to retrospectively consider if an extension of time should have been granted.

Whether a contractor is excused from late performance will depend on the reason for the delay and the provisions of the contract. Both parties should keep records to show why delays have occurred.

If there is an entitlement to an extension of time, the contractor is unlikely to be liable for liquidated damages and may be able to claim its losses and expenses for remaining on the site for longer than intended. Examples may include projects where additional works have been agreed or the employer has imposed restrictions on access to the site. It will be necessary to consider whether the delay is critical and prevented works altogether or has just disrupted the programme and caused an inconvenience.

It will also be necessary to consider other provisions which may impact performance; such as events outside either party’s control. These are called force majeure provisions.

Disputes concerning matters of delay may require the input of an expert delay analyst to consider the impact of a delay event. Such reports can be expensive.

Disputes regarding delay and extensions of time are often dealt with by way of adjudication. Further information regarding adjudication can be found by clicking HERE. It is important that you check your contract as it may dictate the forum for hearing disputes, which may be Court proceedings, adjudication, arbitration or expert evaluation.

Before any claim concerning delay can be started, a claimant should send a Letter of Claim under the Pre-action Protocol for Construction Disputes. This enables both parties to state their case before formal proceedings are commenced.

Where a construction project is not going to plan, it is advisable to discuss your concerns with your solicitor as early as possible. Berry Smith can assist contractors or employers in disputes regarding delayed works, regardless of the size or nature of the project in question.