This month Quantum Executive Director, David Kelly, discussed a topical issues affecting the construction industry; constructive acceleration.

Who is to blame for construction delays, contractor or client?

A good construction project is like a finely tuned machine, the elements of the project move seamlessly around efficiently completing the tasks. However, as happens more often than not, a situation arises where a client does something that causes a delay to the contractor’s works, who then has to add additional resources and/or re-sequence the works to mitigate this event.

Determining liability

Where this event is clearly the client’s responsibility it should be relatively straight forward for a contractor to obtain compensation for it. However where the employer does not accept his liability and insists on the original programme being met, the contractor may be in a situation whereby they are accelerating, with no compensation. If it is subsequently found that the event was the client’s responsibility, then this acceleration becomes what is termed ‘constructive acceleration’.

“As with all claims, the contractor still has to prove that the client was responsible for the delay in the first place”

 

     

 

Definition of meaning and processes to reach a solution

The term ‘constructive’ comes from a series of American cases dealing with ‘constructive changes’, where a client wants work undertaken in a certain way, but refuses to acknowledge that the methodology is a compensable change to the contract.

There are four parts to a constructive acceleration claim. The first part being that, the event must be a client delay event, so it has to be an excusable delay to the contractor. This is largely defined by the contract terms, for instance sub-clause 8.4 of the ‘Conditions of Contract for Construction for Building and Engineering Works Design by the Employer’ published by FIDIC, 1999, which is typical, in that it lists client responsible delay events.

The contractor has to have followed the notice and claim procedures of the contract — such as those in sub-clause 20.1 of the previously mentioned publication — and the client has to have refused to accept liability and rejects such a claim. The client then goes further and instructs the contractor to meet the original programme, as though the delay is a contractor delay event. This is often the most contentious part of a constructive acceleration claim, in that there is no clear direction as to what conduct by the client may constitute such an instruction. The final element of a constructive acceleration claim, is that the contractor accelerates to meet what he believes he has been instructed to do, or to mitigate any subsequent claim for liquidated damages.  Even though the SCL Protocol recommends (1.18.5), that a contractor not accelerate in these circumstances, but attempts to resolve the dispute regarding the legitimacy of the delay claim using the contract  dispute resolution procedures, it is often not as simple as it may first appear.

No quick fix

Dispute procedures take time and the implications of not accelerating on the contractor if the dispute procedures do not fall in his favour, may be more severe.  As with all claims, the contractor still has to prove that the client was responsible for the delay in the first place. However where this can be done, then the elements of constructive acceleration come into play. It is seldom this simple, but the element still has to be found.

“The contractor has to have followed the notice and claim procedures of the contract…”

Want to learn more about claims? Join Andrew Woodward, Executive Director at QGS who will join Claims Class to deliver two back-to-back courses on construction claims and the how to manage claims using the FIDIC contracts. Click for dates and registration.

 


David Kelly
Executive Director

David Kelly, a Quantum Executive Director, has over 28 years of experience of both local and international construction project disputes; David is an eminent construction industry professional, possessing a background in quantity surveying. In 2015, David was awarded the prestigious “Construction Executive of the Year” award from Construction Week Qatar magazine. QGS is acknowledged as one of the leading management consultancies dedicated to serving the interests of national and international construction and engineering organisations.

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This article was previously published in the December 2015 edition of Construction Week Qatar