Construction Law

Concurrent Delay Damages, Award and Allocation

By Ryan McCabe

            
            Michael and Daniel Drewry discussed the downstream allocation of concurrent delay damages in the ABA newsletter Under Construction. Concurrent delays arise when two or more delays occur within the same time, affecting the owner, contractor, and/or other subcontractors. To be concurrent, the delays must be independent of each other; one delay cannot cause the next one. Most concurrency issues arise in the owner/contractor context. Drewry argues that the same upstream framework should apply downstream?from contractor to subcontractors.

            If delays occur around the same time, courts will usually find they are concurrent. The party seeking damages has the burden to prove the delay is not concurrent. If the court decides the delays are concurrent, it will not be able to separate them and will likely not award damages.

            Courts have usually taken three approaches in attributing concurrent delays. First, if the delays cannot be separated, neither party is entitled to seek damages. The second approach is to apportion damages based on comparative fault. Third, the critical path method (CPM), identifies delays that are critical to the project and allocates them to the responsible parties.

            Defining concurrency is critical to identifying concurrent delays. Concurrent delays do not have to be simultaneous; they can be chronological. Thus, delays may occur at different times, but be related by circumstances. The time range can vary from days to several weeks. In addition, some jurisdictions only consider delays concurrent if they are critical to the project.

            Delays should be traced and attributed to responsible parties. Isolate and assign damages that are non-excusable and compensable while keeping contract terms in consideration. The apportionment does not have to be exact. A contractor may apportion an entire concurrent delay to a subcontractor who is responsible for a substantial portion of it. The apportionment is a fact-based issue for the jury. It is important, therefore, to keep as much project documentation and information as possible.

            In trying to apportion concurrent delays, a claimant may face several defenses. The difficulty of apportioning concurrent delays is a defense in itself. If delays cannot be apportioned, the remedy is usually just time extension. Even if delays can be apportioned, the claimant may not be able to convince the court the allocation among the responsible parties is adequate. A subcontractor may also claim that it was pacing its work: the predecessor was causing delay and the subcontractor was simply timing its work in the face of the preceding delay. However, a subcontractor who uses the pacing defense faces the risk of being accused of concurrently delaying the overall project if the subcontractor could have made up for the predecessor?s delay by reasonably accelerating its work.

            Another defense to an accusation of concurrent delay is that the responsible party, while causing delay, was consuming float time. Float is the difference between the earliest and the latest expected time for a particular activity; it is the extra time to complete the activity without delay liability. Notice is another defense. A claimant must give notice to the responsible party within 21 days of incurring cost or learning of the conditions that give rise to a claim. 

            The existing law permits allocation of concurrent delays among responsible parties; the difficulty is doing so successfully.

            This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

Full post as published by The South Carolina Construction Law Blog on January 28, 2009 (boomark / email).