UK: Parties Free To Allocate The Risk Of Concurrent Delay In Construction

Last Updated: 17 September 2018
Article by Peter Cassidy and Sophia Harlow

This Client Alert discusses the recent decision of the Court of Appeal of England and Wales in North Midland Building Limited v. Cyden Homes Limited [2018] EWCA Civ 1744. The decision involved a bespoke extension of time clause in a construction contract that allocated to the contractor the risk of concurrent delay. The Court of Appeal upheld the first instance decision, confirming that parties to a construction contract are free to allocate the risk of concurrent delay and, if the drafting is sufficiently clear, the "prevention principle" will not invalidate the agreed risk allocation.


When negotiating a construction contract, the issue inevitably arises as to how the extension of time provisions will operate when delays happen for a combination of reasons, some of which are the contractor's responsibility and some of which are the employer's.  

Where a construction contract is silent on the subject of concurrent delay, a contractor's entitlement to an extension of time for such delay is, as Lord Justice Coulson1 put it in North Midland, "not entirely free from doubt". Having said that, there is first instance authority which supports the granting of an extension of time to the contractor in those circumstances. It is for this reason that parties, as was the case in North Midland, seek to introduce wording to reverse that potential outcome.

The Court of Appeal upheld Mr Justice Fraser's first instance decision, agreeing that parties are free to allocate the risk of concurrent delay in their contract as they see fit and emphasising the primacy of the construction contract, which is "a detailed allocation of risk and reward".  The Court of Appeal also held that a contractor would not be rescued from the inclusion of such an express allocation by reliance upon the "prevention principle". 

The prevention principle dictates that contractual obligations are not enforceable if the party seeking to enforce them has, in fact, prevented its counterparty from performing them, such as where an employer has prevented the contractor from completing by the agreed completion date.

Brief overview of the facts

In 2009, Cyden Homes Limited ("Cyden") appointed North Midland Building Limited ("North Midland") to design and build a house and associated buildings ("the project") under a JCT Design and Build Contract, 2005 Edition with bespoke amendments ("the contract").

The amendments included the following bespoke proviso to the award of any extension of time at clause

"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..."

The project was delayed and the contractor, North Midland, applied for an extension of time, which was partially denied on the basis of the proviso at clause  Court proceedings were commenced to determine the effect of that proviso in the event of concurrent events causing delay. 

At first instance, in the Technology and Construction Court in London, Mr Justice Fraser held that the effect of clause was to allocate the risk of concurrent delay to the contractor.  North Midland sought to appeal that decision.

The Court of Appeal's findings 

In upholding Mr Justice Fraser's decision, the Court of Appeal addressed two grounds of appeal:2 

Ground 1: clause and the prevention principle

The Court of Appeal held that clause was unambiguous and plainly sought to allocate the risk of concurrent delay to the contractor.  To use Mr Justice Fraser's words, it was "crystal clear".  During the appeal, North Midland had accepted that that was the case.

In light of that conclusion, the only remaining issue was whether there was any other term in the contract, or some overriding principle of law or legal policy, which would render the clause inoperable.

North Midland did not rely upon any other term in the contract in support of the argument that clause ought to be rendered inoperable.  Further, while Lord Justice Coulson was of the view that the prevention principle could only sensibly operate by way of implied terms, North Midland did not seek to make such an argument.

As a result, North Midland's sole line of attack against clause was that the prevention principle was a matter of legal policy which would operate to rescue it from the agreed clause.  

The Court of Appeal rejected that submission for the following reasons:

  1. There is no authority for such a proposition.  Indeed, as mentioned above, Lord Justice Coulson had earlier in his judgment opined that the principle could only operate by way of implied terms.
  2. The prevention principle is not engaged in any event as the provisions of clause 2.25.5 set out "acts of prevention" of the employer which give rise to the contractor's prima facie entitlement to an extension of time.
  3. There is no obvious connection between the prevention principle and the separate issues that arise from concurrent delay.  Further, there is no mention of concurrency in the authorities dealing with the prevention principle.
  4. The very purpose of clause was to reverse the result of what might otherwise have been the position based on the first instance decisions referred to above which support the granting of extensions of time to a contractor where there is concurrent delay.
  5. Most importantly, clause was an agreed term and there is no suggestion in the authorities that the parties cannot contract out of some or all of the effects of the prevention principle.  Indeed, Lord Justice Coulson pointed to Court of Appeal and first instance authority to the contrary.

Ground 2: liquidated damages

As a subsidiary submission, North Midland argued that, even if clause was enforceable, such that it was not entitled to an extension of time for concurrent delay, there was an implied term that would prevent Cyden from deducting liquidated damages.

In rejecting that ground, the Court of Appeal gave the following reasons:

  1. The liquidated damages provision is a valid and genuine pre-estimate of loss caused by the delay, there being no suggestion of a penalty.  There was a proper causal link between the delay and the damages irrespective of whether there was one effective cause or two causes of "approximately equal causative potency".3
  2. The express provisions that confer or deny a right to an extension of time are linked directly to the preservation of the employer's right to liquidated damages.
  3. As clause is valid, it expressly permits Cyden to levy liquidated damages for concurrent delay because it does not grant North Midland relief from such liability by extending the completion date.  As a result, the implication of such a term as contended for by North Midland would be contrary to the express terms of the contract.
  4. It is clear that the contract works in the form in which it was agreed and there is no need for any implied terms.
  5. Contrary to the submissions of North Midland, a failure to imply such a term would not be "in any way uncommercial or unreal".  As referred to above, first instance authority supports the grant of an extension of time to a contractor despite its default.  By clause, the parties sought to reverse that outcome.  As Lord Justice Coulson remarked, while either result might be regarded as being harsh on the other party, neither could be said to be uncommercial or unworkable.

Practical implications 

The Court of Appeal has made it clear that parties to a construction contract are free to allocate the risk of concurrent delay.  If they do so clearly and there are no conflicting express terms, such allocation will be enforceable with no scope for the implication of the prevention principle.

Interestingly, in the international arena, the new editions of the FIDIC forms of contract reflect the thinking of Mr Justice Fraser and the Court of Appeal by permitting parties to incorporate special conditions governing how the risk of concurrent delay is allocated.

As the Court of Appeal has stated, a construction contract is a detailed allocation of risk and reward.  The net result of wording such as that used in North Midland is that a contractor will not be entitled to an extension of time in the event of concurrent delays and will be subject to liquidated damages.   

The allocation of risk of concurrent delay could, during negotiations, be shifted to the employer.  Having said that, the balance of power in negotiations might suggest that that is not so likely.

Whatever the parties to the main contract agree to be the appropriate allocation, the contractor will need to ensure that that position is appropriately "dropped down" into its subcontracts.

Finally, as the Court of Appeal did not determine Ground 3, we will have to await appellate consideration and reconciliation of the differing views expressed in first instance decisions and textbooks as to a contractor's entitlement to an extension of time in the event of concurrent delays.

For more information or guidance on this topic, please get in touch with one of the authors of this alert or your usual Reed Smith contact.

  1. Lord Justice Coulson delivered the lead judgment with whom The Master of the Rolls (Sir Thomas Etherton) and The Senior President of Tribunals (Sir Ernest Ryder) agreed.
  2. There was a third ground of appeal, which concerned a subsidiary argument about the circumstances in which delay events qualify as concurrent delays.  However, as the appeal on Grounds 1 and 2 failed, the Court of Appeal considered it unnecessary and undesirable to address Ground 3 as the issue in question did not arise.
  3. Lord Justice Coulson cited this phrase from Adyard Abu Dhabi v. SD Marine Services [2011] EWHC 84 (Comm); which had been derived from John Marrin QC's definition in his article "Concurrent Delay" 2002. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions