Article

Allocating risk for delay: the tale of the savvy employer

 

By Tris Tucker

As you probably know, the usual position is that a contractor will still be entitled to an Extension of Time (EOT) where there are concurrent delays caused by the contractor at the same time as events outside of the contractors control/risk which are the subject matter of the EOT claim. In some circumstances that can be a little harsh on employers. However, recently, a shrewd employer managed to switch this principle on its head.

In the case of North Midland Building Limited v Cyden Homes Limited [2017] EWHC  (TCC) the parties had amended the 'Relevant Event' clause of the JCT D&B contract to read as follows:

"any delay caused by a Relevant Event which is concurrent with another delay for which the Contractor is responsible shall not be taken into account"

In other words, the contract apportioned the risk of any concurrent delay to the contractor regardless of the events outside of the contractors control/risk which were the subject matter of the EOT claim, ensuring that the employer did not have to provide an extension of time. The Court this week endorsed this as the correct approach.

The judgment confirms that the Courts will look to enforce contractual clauses that parties have negotiated, whether they are considered to be a bad bargain or not.  This may lead to astute employers trying to have their contractors take on the risk of concurrent delay. Why wouldn't they?  Contractors beware (again)!

Tris Tucker & Emma McCartney

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