Parties in disputes globally rely on the Society of Construction Law Delay and Disruption Protocol (Protocol) to advance their own case and trounce their opponents. Several legal cases have discussed the SCL Protocol and this article discusses them and what conclusions may be drawn from this.
The SCL Protocol is in its second edition and the SCL website says that:
This Protocol has been prepared by the Society of Construction Law for determining extensions of time and compensation for delay and disruption. It exists to provide guidance to all parties to the construction process when dealing with delay and disruption matters. It recognises that transparency of information and methodology is central to both dispute prevention and dispute resolution.
In February 2017, the 2nd edition of the Protocol was published. This supersedes both the 1st edition of the Protocol and Rider 1 to the 1st edition of the Protocol.
Popularity of the Protocol
- Between 2005 and April 2018, there were over 38,500 downloads of the Protocol.
- Since 2009 there have been over 27,000 hits on the main Protocol website page.
- These visitors have come from 142 countries: (Main countries, approx.: UK 33%, UAE 9%, Australia 6%, Qatar 5%, Hong Kong 4%, USA 3%)[1]
The Protocol is a significant document and its status is of importance to many organisations operating in construction, engineering and shipbuilding both in the United Kingdom and globally.
ENGLAND & WALES
Surprisingly there are no English building cases that deal with the SCL Protocol in any significant way , pleadings mentioned the Protocol in Balfour Beatty Construction Ltd V Lambeth [2002] EWHC 597 (TCC) and also the Great Eastern Hotel Company Ltd V John Laing Construction Ltd [2005] EWHC 181 (TCC) but there was no judicial discussion of the SCL Protocol in either of these cases.
The Abu Dhabi case of Adyard Abu Dhabi V SD Marine Services [2011] EWHC 848 (COMM) which was a shipbuilding dispute dealt with the Protocol:
The claimant advanced the submission that it was entitled to an EOT if the duration of the relevant event or act of prevention extended over the original completion date, regardless of what other events may have been delaying the works and regardless of whether the relevant event / act would have any impact upon the actual progress of the works. [para 258-261] The claimant’s expert suggested that the Protocol supported this submission. [para 289]
The Court determined that the Protocol was of little assistance to that submission given:
(a) “the SCL Protocol is not in general use in contracts in the construction industry and nor has it been approved in any reported case”;(b) there was no evidence that the parties were aware of it or that they contracted with it in mind; and
(c) the Protocol itself says that "it is not intended to be a contractual document” and “[n]or does it purport to take precedence over the express terms of a contract or be a statement of law". [para 289]
The Court further determined that, even if the Protocol was relevant, there was no “real support” contained therein for the claimant’s causation submission. [para 292] Rather, the Court determined that, based upon the relevant contract provision, it was necessary to ascertain whether there was actual delay using a retrospective delay analysis. [para 299]
Arguably causation under the contract was required to be proved using a retrospective delay analysis.
Turning to Asia, the TCC in England heard the case of Mirant Asia-Pacific Construction (Hong Kong) Limited V Ove Arup [2007] EWHC 918 (TCC) about a dispute on a powers station at Sual in the Philippines. The court relied upon the Protocol in recognising that there may be more than one critical path; and the purpose and effect of critical path analysis.
AUSTRALIA
Surprisingly to some; the courts of Australia have generated the most case law on the use of the Protocol. Turning to the cases in chronological order; in 2006 the case of 620 Collins Street Pty Ltd V Abigroup Contractors Pty Ltd (NO1) [2006] VSC 490 was heard by the Supreme Court of Victoria. In an application to set aside an arbitrator’s decision for failing to take account of certain of the plaintiff’s submissions, the court noted that the arbitrator had relied upon “the guidelines for retrospective delay analysis published by the UK Society of Construction Law [2002]”. Ultimately the court decided there was no misconduct by the arbitrator in reaching the relevant conclusion.
In 2012 Supreme Court of South Australia heard the case of Alstom Limited V Yokogawa Australia Pty Ltd (NO.7) [2012] SASC 49, hear the court noted that the plaintiff’s expert relied upon the definition of “critical path”, explanation of logic links and resource levelling. The court rejected one of the plaintiff’s expert’s methods of delay analysis because it was not a “method recognised within the engineering profession”. This was because the method did not feature in the Protocol, in Keith Pickavance’s Delay and Disruption in Construction Contracts or, to the knowledge of the plaintiff’s expert, any other text on construction law. The court noted that the defendant’s expert’s use of an “As-planned v As- built” methodology was, in the circumstances, justified by the Protocol.
In the same year the Supreme Court of Victoria heard SMEC Australia Pty Ltd V McConnell Dowell Constructors (AUST) Pty Ltd (NO.3) [2012] VSC 557, in this case the plaintiff’s expert report relied upon the “Measured Mile” analysis of delay in accordance with the Protocol. There was no judicial discussion of the Protocol given the case concerned a strike out application. There is no reported decision on the merits of the case at trial.
Then in 2016 the Victorian Civil and Administrative Tribunal Civil Division heard the case of Allmore Constructions Pty Ltd V K7 Property Group Pty Ltd (BUILDING AND PROPERTY) [2016] VCAT 1770 . Here the court noted that one of the expert Quantity Surveyors called upon to give evidence made reference to the table at paragraph 4.13 of the first edition of the Protocol, which set out four alternative types of analysis that can be used to assess a claim for delay, including Time Impact Analysis. The expert in question used the Time Impact Analysis technique in order to create a chronology of key factual information, identify the relevant contractor's programme, link the delay activities to the existing programme activities, and determine the effect of the claimed delay event on practical completion. 8.3 The Court noted that the Quantity Surveyor for the other party did not use any of the four alternative types of analysis in the Protocol but used what he called "first principles" analysis.
Santos Ltd V Fluor Australia Pty Ltd [2017] QSC 153 was heard by the Queensland Supreme Court and here Fluor sought to strike out a number of paragraphs of Santos' claim on the basis that Santos relied upon multiple breaches as causing the works to be delayed and disrupted. Fluor asserted that Santos failed to identify a causal link between these multiple breaches and the claim for disruption. Santos had calculated the extent of disruption using a measured mile analysis. Fluor submitted that a measured mile analysis in accordance with the Protocol proceeds upon the basis that it is not possible to undertake a critical path analysis of delay or to analyse the cause and effects of the claimed delay. Fluor submitted that if a measured mile analysis was the basis of the claim, Santos should have expressly pleaded that it was not possible to disentangle the causative contribution of individual breaches. However, the judge refused to strike out the paragraphs referring to delay and disruption and found that Santos' claim did, in fact, include a sufficient pleading of material facts.
During 2019, two more Australian cases were heard. The first being Lucas Earthmovers Pty Limited V Anglogold Ashanti Australia Limited [2019] FCA 1049 where much of the evidence and submissions contained references to the “baseline program” and to delays being critical or non-critical. The court noted that the parties agreed as to the concepts of "critical path" and "critical delay". The court adopted the definition of "critical path" in the Protocol.
The second case of 2019 saw the Supreme Court of New South Wales discuss the Protocol. In White Constructions Pty Ltd v PBS Holdings Pty Ltd [2019] NSWSC 1166 [1] the court has reached a number of important decisions.
In this case the developer, White complained that the sewer design of the first defendant was late, delaying the completion of the development, which in turn was said to have caused it loss and damage. Each party relied on expert from construction delay experts as to when the project would have been completed and whether the default alleged delayed the whole project The Court noted that the methods used by the delay experts had been derived from the UK Society of Construction Law’s Delay and Disruption Protocol.
White relied on an “as-planned versus as-built windows analysis”, under which “the duration of the works is broken down into windows which are framed by revised contemporaneous programmes, contemporaneously updated programmes, milestones or significant events. Key measuring points are identified on the path taken by the analyst to be critical. Changes to the critical path, critical path delays and the causes of those delays within and between each of the windows are examined to determine slippages and causes of delays.”
PBS relied on a “collapsed as-built (or ‘but-for’) analysis”, which involved “extracting delay events from the as-built programme to provide a hypothesis of what might have happened had the delay events not occurred. This method requires the selection of “logic links” which link various components of the works to assume relationships of dependency to determine a critical path.”
White’s expert evidence was that the project could have been completed by 15 July 2016 and that asserted delay caused a critical delay of 240 calendar days to the project. PBS’s expert evidence was that at best the works would have, in any event, not been finished before 10 February 2017 by reason of other matters, together with the opinion that at best, on a series of assumptions, the program would have been completed only 19 days earlier than it in fact was.
Stepping back from the debate on analytical method, the Court said:
“In effect … the Court should apply the common law common sense approach to causation referred to by the High Court in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506. … The Court is concerned with common law notions of causation. The only appropriate method is to determine the matter by paying close attention to the facts, and assessing whether White has proved, on the probabilities, that delay in the under-boring solution delayed the project as a whole and, if so, by how much.”
With its own expert assistance, the Court concluded that “… neither method is appropriate to be adopted in this case, upon a detailed analysis of contested events, the Court determined that White had not proven the breach of contract on which its case depended. “This case demonstrates the importance of paying close attention to the actual facts rather than opinions about what the evidence establishes.”
“The expert reports are complex. To the unschooled, they are impenetrable. It was apparent to me that I would need significant assistance to be put in a position to critically evaluate their opinions and conclusions… “I record that Mr McIntyre’s assistance was invaluable to the Court. His advice demonstrated that the complexity that has been introduced is a distraction.”
The fact that a method appears in the Protocol does not give it any standing, and the fact that a method, which is otherwise logical or rational, but does not appear in the Protocol, does not deny it standing.
DISCUSSION
If we were to look at the United States courts admissibility tests for expert evidence the general premise from Frye v. United States, 293 F. 1013 (D.C. Cir. 1923) is that an expert opinion is admissible if the scientific technique on which the opinion is based is “generally accepted” as reliable in the relevant scientific community. Arguably expert evidence based on the Protocol would meet this requirement and the United States courts could give a method from the Protocol greater weight than an Australian court based on the more recent decisions.
The Supreme Court case of Kennedy v Cordia (Services) LLP (Scotland) [2016] UKSC 6 posed a question for the use of expert evidence; is there a reliable body of knowledge or experience to underpin their evidence?, arguably using a technique from the SCL Protocol would meet this criteria.
The Protocol is being used globally, in variety of courts and tribunals all of which have their own criteria and rules dealing with expert evidence; though there is similarity across common law jurisdictions and reliance upon each other’s cases. The UK case of Kennedy cited the Australian case of R v Bonython (1984) 38 SASR 45 to support the need for reliable body of knowledge or experience to underpin the evidence given by the expert.
Most courts and tribunals are unlikely to give the Protocol a special status, though where a delay expert is utilised and some form of critical path analysis is undertaken the tribunal is likely to expect the expert does use a methodology that can be explained logically and replicated by others, those in the Protocol have arguably been endorsed by leading experts in delay analysis and are recognised methodologies.
Parties are free to include in their contacts provisions for how delay can be assessed rather than take pot luck during later disputes. Parties must be aware that the Protocol states that:
The object of the Protocol is to provide useful guidance on some of the common delay and disruption issues that arise on construction projects, where one party wishes to recover from the other an extension of time (EOT) and/or compensation for the additional time spent and the resources used to complete the project. The purpose of the Protocol is to provide a means by which the parties can resolve these matters and avoid unnecessary disputes. A focus of the Protocol therefore is the provision of practical and principled guidance on proportionate measures for dealing with delay and disruption issues that can be applied in relation to all projects, regardless of complexity or scale, to avoid disputes and, where disputes are unavoidable, to limit the costs of those disputes. On certain issues, the Protocol identifies various options, with the choice of the most appropriate being dependent on the nature, scale and level of complexity of a particular project and the circumstances in which the issue is being considered. On other issues, the Protocol makes a recommendation as to the most appropriate course of action, should that be available.[2]
What parties must remember is that the matters demonstrated in the delay analysis need to be supported by evidence if they don’t their claim will fail on the issue of causation.
About the author
Sean Sullivan Gibbs BSc. LLB(Hons) PG Dip Arb, PG Dip Bar, LLM, MICE, AFICHEME, FRICS, FCIOB, FCICES is a director with Hanscomb Intercontinental Ltd. Hanscomb Intercontinental provide expert advisory and expert witness services to the onshore and offshore construction, engineering and shipbuilding industries in the United Kingdom and internationally from offices in London, Hong Kong, South Africa and New York. He can be contacted by email sean.gibbs@hanscombintercontinental.co.uk or telephone +44 (0)20 3287 8518
[1] https://www.scl.org.uk/resources/delay-disruption-protocol
[2] SCL Delay and Disruption Protocol 2nd Edition: February 2017, Page One