Delays and time extensions under JCT contracts

The recent decision of the Technology and Construction Court in the case of Walter Lilly & Co Limited v Mackay and DMW Developments Limited will be of interest to both contractors and employers in the construction industry.

Water Lilly & Co Ltd (WLC), the contractor and claimant in this case, was appointed under a JCT contract to develop 3 high end London properties for DMW Developments, a corporate entity established by Mr Mackay and two others for the purpose of progressing this particular development.

With hindsight, it is clear that the project was in trouble from the start due to large elements of the design having not been completed by DMW’s architect to an extent that enabled WLC to realistically proceed with the works.  This led to practical completion being significantly delayed and a dispute arising between the parties as to who was at fault.  WLC claimed, amongst other things, an extension of time to complete the works under a relevant clause in the contract.

In his judgment, Akenhead J considered the question of what extension a contractor is entitled to, under a JCT or similarly drafted contract, where there have been concurrent delays i.e. delays caused by both “relevant events” (in relation to which the employer is at risk) and those which are not caused by “relevant events” (in relation to which the contractor is at risk).

Akenhead J held that, where there have been concurrent delays under a JCT or similarly drafted contract, the contractor will be entitled to an extension of time for the period of the delay caused by the “relevant event(s)” (at the employer’s responsibility/risk) even though there has also been a concurrent delay which was not caused by a “relevant event” (at the contractor’s responsibility/risk).  Akenhead J distinguished this position under English Law from the stance taken by the Scottish Courts, which is to apportion the effect of concurrent delays between the parties and thus reduce the length of any extension of time that would otherwise have been given to the contractor.

Initially this looks like a positive result for contractors with it being  confirmed once and for all that the less favourable apportionment method adopted by the Scottish courts does not apply under English Law.  However, it remains to be seen how employers will seek to respond to this decision.  The obvious assumption will be that there will be a movement by them away from relying on the standard JCT clauses in relation to the contractor’s right to an extension.

Holmes & Hills Solicitors has solicitors specialising in Construction Law who advise on resolving disputes in the construction industry.