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30/01/24

Demystifying cause and effect

Demystifying cause and effect

The complex nature of construction and engineering projects often leads to delays that impact the completion date of a project. The provisions of the contract may enable the contractor to apply for an extension of time (‘EOT’) for completion. Ultimately, the burden of proof is on the contractor to evidence the cause of the delay on a project and the effect such delay has on the completion date. This article discusses several of the essential elements required for substantiating the cause of the delay(s) and the subsequent effect of the delay on the completion date of a project. We also consider good practice and recommendations to enhance the potential for succeeding with a claim under a contract. 


Author: Paul Mullen, Associate Director Dubai, Driver Trett UAE


The cause

A cause is an event that has occurred which may give rise to a claim for relief under a contract. Typical examples of which are, regardless of where the project might be located across the globe:

  • Late issuance of an instruction / drawing.
  • Late access to site.
  • Unforeseeable physical conditions.
  • An instruction to vary the works. Issue of revised drawings / information.
  • Exceptionally adverse weather conditions.
  • Force Majeure.
  • Change in legislation.
  • Acts of prevention / delays by the Employer and/or its agents.
  • Delays by Authorities.

The above list is not exhaustive but provides details of some of the ‘usual suspects’. The basics of clearly drafting the narrative of an event that has occurred can often be lost when drafting an EOT claim. It is important for the narrative of the event to be drafted in a clear and structured manner, such that a person who is not involved in the project may understand the event.

An example of a well-structured narrative is set out below. 

  1. INTRODUCTION
    The introduction section should contain a brief description of the event, and the relevant facts that clearly describe the event that has occurred or is occurring.
  2. CHRONOLOGY
    The chronology establishes the facts of the event in a detailed manner. It should identify the start and end date of the event, or if the event is ongoing, it should state the same. It can be challenging to find a balance between ‘too much’ and ‘too little’ detail. In terms of ‘too much’ detail, this can occur where the chronology is presented in numerous pages of narrative, and in an unstructured manner becoming complex and confusing the recipient. In the case of the chronology containing ‘too little’ detail, the contractor can be at risk of failing to relay the facts of the event accurately.
  3. BASIS OF ENTITLEMENT
    Establishing the basis of entitlement will depend on the provisions of the contract. A common mistake in contractor claims is referencing incorrect clause(s) when attempting to establish entitlement, leading to rejection of the claim. It is important for a contractor to understand the contract provisions relevant to the event to correctly establish its entitlement. By way of example, for the FIDIC suite of contracts, a common error by the contractor is where the contractor attempts to establish entitlement under Clause 20.1 [Contractor Claims].1 This clause does not entitle the contractor to an EOT, rather it is the mechanism used for submitting the claim, which also contains specific provisions and requirements that must be adhered to by the contractor as part of the claim submission process. The entitlement, for time, is actually established under Clause 8.4 [Extension of Time for Completion].2

The effect

The effect of a delay event may result in delays to the project completion date and thereafter the contractor incurring additional costs. The issue of cost recovery is not tackled here but will be the topic  of a future article. There are several methods of delay analysis that can be used to demonstrate the effect of a delay event on the project completion date. In some cases, the contract may prescribe the method of delay analysis to be undertaken and the contractor may either apply the required methodology or give valid reasons for an alternative method of analysis being selected. Varying factors may also influence the choice of the most suitable delay analysis method such as the availability and quality of the data, records and information, the availability of the progress update programmes, as well as considering the nature, extent, and timing of the event(s).

Many leading industry publications such as the Society of Construction Law (SCL) Delay and Disruption Protocol3 and the American Association of Cost Engineer’s (AACE) recommended practice No.29R-034 provide guidance on appropriate methods of delay analysis. 

Choosing the most suitable delay analysis methodology will depend on the details provided within the contract and / or the level of information available. However, some important elements of conducting a delay analysis are discussed here, by way of illustration.

  1. There must be a programme to measure the impact of the event, and evidence ideally that it is an approved programme under the contract.
  2. The analysis must firstly identify the critical path of the programme, before then demonstrating the impact of the event on the critical path of the programme.
  3. The impact of the delay may be determined either by prospective or retrospective delay analysis. Prospective delay analysis identifies the likely effect of an ongoing event on the time for completion where the event and its actual impact have not ended. Retrospective delay analysis identifies the actual effect on the time for completion where the event and its impact have concluded.
  4. Consideration should be given as to whether the cause must be identified before establishing the impact of the event (CauseEffect), or where the effect must be identified before establishing the cause (Effect-Cause).
  5. Cause-Effect – Certain methods of delay analysis will begin with the event (the cause) and then look to establish the impact (the effect). This method is generally adopted where the event has occurred, but the works are ongoing and the overall impact of the event is ongoing, thereby avoiding a ‘wait and see’ approach.  
  6.  Effect-Cause – in contrast, other methods of delay analysis will begin with identifying critical delay (the effect) and then look to establish the reason for the delay (the cause). This method is generally adopted where the works have been completed or when the effect of the event has concluded. 

It is important for the delay analysis narrative to align with the narrative and the chronology of the event which may be detailed in another section of the claim. Often, the narrative of the event and the delay analysis narrative is drafted by separate individuals which may lead to misalignment and conflicting information between the two sections. Consideration should be given to the fact that the recipient of a claim may not be an expert in the field of delay analysis or overly familiar with delay analysis. Therefore, the narrative should be drafted in a manner that a person who is not technically versed in delay analysis methodology can understand it, including a detailed step-by-step explanation within the ‘claim’.

Conclusion

The following takeaway points can enhance the possibility of a successful outcome of an EOT claim:  

  • When drafting the narrative of the event, use a detailed and factual chronology, substantiated through project records.  
  • When establishing entitlement to an extension of time, use the correct provisions of the contract.  
  • The delay analysis methodology chosen and the logic surrounding the same should be explained as part of the narrative.  
  • The delay analysis section of the claim should be clearly drafted in a manner that a non-technical person may understand.  
  • The delay analysis narrative should align with the narrative explaining the event.  

 This article was written for issue 26 of the Driver Trett Digest. To view the publication, please visit: www.driver-group.com/digest-issue-26


1.  Sub-Clause 20.1 of the Conditions of Contract for Construction (First Ed. 1999) For Building and Engineering Works designed by the Employer.
2.  Sub-Clause 8.4 of the Conditions of Contract for Construction (First Ed. 1999) For Building and Engineering Works designed by the Employer.
3.  Society of Construction Law Delay and Disruption Protocol – 2nd edition – February 2017 – Guidance Part B: Guidance on Core Principals.
4.  American Association of Cost Engineer’s recommended practice No.29R-03 dated 25 April 2011, Section 3 ‘Method Implementation’.

Articles  /  Digest  /  Global  /  Middle East

Articles  /  Digest  /  Global  /  Middle East

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