Extension of Time Claims – Cause and Effect
If a claim is to succeed, it is vital that it contains a persuasive argument to demonstrate that the claimant is entitled to an award and the quantum of the award. In this paper, I am going to share with you some key elements that must be included to help a just extension of time claim to succeed and an award to be made in a timely manner. The elements discussed here are cause, effect and delay analysis: matters that are all essential to proving the case.
Cause and Effect
Often the best way to deal with the event itself is to present the details through a chronology. The chronology should describe what happened, when it happened and provide substantiation of the events by way of reference to the project records. The project records should, of course, be included in an appendix for verification and reference. We should also split the chronology into sections that deal with cause and effect so that it is very clear that we have these essential elements covered.
The chronology will demonstrate the cause, i.e. what happened and is usually a matter of fact. The effect is a little more subjective and often takes a little more work to demonstrate. The effect section should conclude with the following:
- What activity(ies) were affected;
- When did the delay start;
- When did the delay finish.
Once we have established the facts of the matter, it is necessary to demonstrate that the delay event or events actually delayed the time for completion and by how much. The above information can therefore be used to create a delay analysis to show the effect on the completion date.
The Delay Analysis
An essential part of any claim for an extension of time is a demonstration that the delay event actually had an effect on the time for completion. It is not the purpose of this paper to delve into the often murky science of delay analysis, so I would like to recommend the Society of Construction Law’s Delay and Disruption Protocol, which goes a long way towards explaining delay analysis principles and making recommendations as to the most suitable forms of project programming and delay analyses. Certain principles, however, do need to be understood and taken into account to demonstrate entitlement to additional time, so it is worthwhile reviewing the basics here.
Firstly, there must be a programme from which to measure the effect of a delay. Whatever programme is used for the delay analysis, it is necessary to make reference to it within the claim, possibly with an explanation as to how it came about. It is also necessary to include substantiation to demonstrate that it was approved or accepted by the Engineer and to include the programme within the appendices.
It must be remembered that delay does not automatically lead to an extension of time. For example, a 25-day delay to an activity will not automatically result in entitlement to an extension of time of 25 days because, in order to have an effect on the completion date, the delay event must impact the critical path of the programme. It could well be the case that a delay event will only use up float, or that the delayed activities are not on the critical path. Alternatively, it could be the case that the delay event uses up the entire available float, thus making the activity part of the critical path and therefore affecting the date for completion.
Another important principle to bear in mind at this stage is that where two delays occur at the same time or concurrently and one of the concurrent delays is the responsibility of the Contractor and the other is the responsibility of the Employer, the entitlement of the Contractor to an extension of time is not negated. Concurrency affects the payment of prolongation costs, but not time.
One of the frequently-used methods of delay analysis is to impact the delay into the current programme to produce an ‘impacted as-planned’ programme and this may be done by adding the delay event itself as a new activity within the programme. If this method is chosen, the appropriate logic links must be introduced. The resulting impacted as-planned programme will show the effect of the delay event on the critical path and consequently, on the completion date. The revised completion date will, in turn, demonstrate the extension of time to which the claimant is entitled.
Whatever method of delay analysis is used, it is important to justify that it is a suitable method. On many occasions, a claimant will adopt one method only for the respondent to state that a different method should be used. Sometimes there are good reasons for doing so, but frequently, this is just a reason for prolonging the making of a decision by the respondent. As with most matters when compiling a claim, it is best to deal with anticipated responses from a reviewer within the claim and effectively ‘close the door’ on them, rather than waiting for the response.
For example, one of the Society of Construction Law’s recommendations is that a time impact method of delay analysis is used to demonstrate the effect of delay, so if you are going to use this method, reference to the Society of Construction Law’s Delay and Disruption Protocol would provide sufficient justification. If it is preferred to use an alternative method, the reasons for doing so must be explained within the claim.
The narrative which justifies the method of delay analysis used could be dealt with in the section that provides details of the extension of time claim, or in a separate section within the claim. Much here depends on the level of explanation necessary to justify the basis of the delay analysis. Where this explanation is included in the claim document is not particularly important, but it is essential that a detailed explanation is provided for the reviewer.
It is also essential to include an explanation of the adopted method and exactly how the programme used to demonstrate entitlement has been created. Such an explanation should be given in such a way that a non-expert planner can understand the methodology. It is often the case that the claim narrative is produced by one person and the delay-analysis programmes by another and it is also frequently the case that the two documents have little interrelationship or are sometimes even contradictory. Possibly the logic would be obvious to an experienced planner, but it is also quite possible that the reviewer of your claim document won’t be an expert in this field and needs the benefit of an explanation. A step-by-step explanation of what has been done must be included at this point in the claim document and the resulting programme should be included in the appendices. The reviewer should certainly not have to guess the logic of, and the reasoning used in, the creation of the programme.
So, if your claim establishes cause and effect and includes a delay analysis to demonstrate the effect on the time for completion, the respondent will be in a position to understand your claim, verify the effect of the event and to make an award.