N Midland v Cyden: clarity at last?

2 October 2018 | By Tom Francis

The contractor’s appeal of the original court ruling was thrown out due to a modified contract clause, explains Tom Francis.

The topic of concurrent delay has been a talking point this year following the case of North Midland Building v Cyden Homes.

The issue is simple enough, in theory. Two events, caused by different parties on a project, happen at the same time and both have an impact on the critical path, causing a delay to completion. It’s then down to lawyers to interpret the relevant contract terms and the law that applies.

In the case of North Midland v Cyden, the contractor had argued that time was “at large” and it only needed to complete the project in “reasonable” time. This was due to a combination of an employer delay and the “prevention principle”.

This holds that a party cannot benefit from causing its own problems, so, in construction for example, the employer can’t stop the contractor from working, then claim damages for the project running late.

In January, the case went to court and the employer won. However, to ensure clarity on the application of the prevention principle and assessment of concurrency, Mr Justice Jackson allowed an appeal.

He suggested it was “bizarre” that the employer should potentially receive damages when it had made a completion date impossible to achieve.

But, at the appeal ruling on 31 July, the courts upheld the original decision.

North Midland argued that the prevention principle was an implied contract term, which didn’t need writing into the contract. But Lord Justice Coulson said that the prevention principle did not apply and therefore time was not at large because the contract contained a “clear and unambiguous” clause stating how concurrent delay was to be managed.

The wording was, “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 contract was a modified JCT, and the clause modified was 2.25.)

As a result, the contractor was liable for the delay damages.

Though it may seem unfair, there’s nothing in law that can save a contractor from such a clause. Indeed, some lawyers have suggested that similarly clear clauses on assessment of delays may become more common to avoid such disputes in future. 

Tom Francis is a director at Decipher Consulting

Leave a comment