Breaking Down the Walls: A Series on Construction Delay, Part 2

In the fast-paced world of construction, delays and disruption can pose significant challenges to project success and execution. Throw concurrent delays into the mix, and it can be challenging to assign responsibility. This article seeks to demystify these concepts as they relate to delay claims and provide the reader with some useful takeaways for use in practice.

If you haven’t done so already, read the first part of this series that was published in January 2025 in the OBA’s Construction and Infrastructure Law Section | Section Insider.

PART A: Delay vs. Disruption Claims

Parties often find themselves conflating the concepts of delay and disruption while assembling claims. While delay impacts and disruption impacts can coexist on the same construction project, they are fundamentally different and should be distinguished.

Delay claims are used to recover the time and cost associated with a project’s extended duration. The costs contained in these claims are generally limited to the time-related indirect costs, with some exceptions. However, a project event may occur which results in additional direct contract costs to perform base scope work, regardless of whether the event causes, or was caused by, project delay. These impacts are often referred to as “disruptions”. Disruption claims aim to recover the additional cost to perform a scope of work beyond what was planned and are typically framed as loss of productivity or loss of efficiency claims.

While delay claims focus on the costs of extended performance of the work, disruption claims generally focus on the loss of efficiency on discrete work.

What is a disruption claim?

The SCL Protocol^[1] defines disruption as:

Disruption (as distinct from delay) is a disturbance, hindrance or interruption to a Contractor’s normal working methods, resulting in lower efficiency. Disruption claims relate to loss of productivity in the execution of particular work activities. Because of the disruption, these work activities are not able to be carried out as efficiently as reasonably planned (or as possible). The loss and expense resulting from that loss of productivity may be compensable where it was caused by disruption events for which the other party is contractually responsible.

Fundamentally, a disruption claim is for the additional cost resulting from events that impact planned productivity. Disruption claims are therefore often referred to as loss of (or lost) productivity claims.

Productivity is a metric used to define the amount of construction output per unit of input. A contractor will often bid its project based on some productivity rate that it presumes can be achieved on a given project. These rates are generally based on time (e.g., output per hour, day, or shift) or on cost (e.g., output per dollar). These measurements generally relate to labour, but can extend to equipment usage or other quantifiable performance metrics. Examples of productivity measurements include:

I. Weld inches per workhour,

II. Linear feet of pipe installed per crew per shift,

III. Cubic meters of concrete placed per day,

IV. Cubic meters of excavation hauled per truckload,

V. Cost per meter of track installed, or

VI. Meters of cable pulled per shift.

A disruption is generally viewed as an interruption to base scope work. This differentiates disruption from claims for new or changed scopes (e.g., requiring an additional storey in a new condominium tower) which would typically be put forth as a separate, discrete claim; however, in certain circumstances additional scope may impact (or disrupt) existing or original scope.

While disruption claims, delay claims, and discrete claims are separate concepts, there is the potential for interplay between them on a project:

• A disruption may result in project schedule delay – Reduced welder productivity extended the critical path pipe installation duration, which delayed substantial completion.
• Attempts to mitigate a delay may result in disruption – Adding an overtime shift to mitigate pipe installation delays reduced welder productivity.
• A discrete change may result in disruption – Changes to the pipe system design led to tighter workspaces and reduced welder productivity.

Under some contracts, a contractor may have a responsibility to accommodate or mitigate disruptions as they arise. However, mitigation strategies are not always feasible, or an increased cost may be inevitable. In these cases, a contractor could submit a claim for disruption.

While these concepts are related, best practice dictates that parties segregate their disruption, delay, and discrete costs, where possible. This separation recognizes the different claimed costs (e.g., time-related indirect costs versus additional direct costs) and allows for the evaluation of each claim under its own merits and against the differing legal frameworks for each claim. That said, the segregation of claims can lead to duplication, and proper attention should be paid to ensure that claimed damages are not duplicative and result in double dipping of alleged extra costs.

Supporting a disruption claim

As with other claims, the contract will ultimately guide how and when a disruption claim can be submitted, if at all. Contractual provisions notwithstanding, a successful disruption claim will generally feature the following four attributes:

1. Identification that a disruption event occurred,
2. Determination that the disruption event is excusable under the contract (i.e., there is causation which permits a party to claim against another),
3. Demonstration of loss of productivity resulting from the disruption event through a comparative analysis, and
4. Quantification of the increased cost resulting from the lost productivity.

The following sections discuss each of the above aspects in further detail.

1. Identifying a disruption event

Identifying whether a disruption event occurred can be relatively straightforward with the proper documentation and input from the project team. Disruption will often manifest as additional work hours or cost to execute a specific activity and may be evidenced by looking at the contemporaneous documents that measure these metrics. Practically, disruption is often a factual observation made by the project team, and their input will usually commence the process to determine whether there was disruption.

While each project is unique, some common disruption events are:

• Piecemeal, out of sequence, or incomplete site or work area access,
• Late and evolving design,
• Schedule acceleration measures (e.g., trade stacking, additional shifts, extensive overtime, etc.),
• Unforeseen site conditions,
• Availability and quality of labour,
• Defective plans or specifications,
• Poor project management,
• Late or piecemeal supply of material and equipment, and
• Severe or seasonal weather.

Once a disruption event is identified, the next steps involve determining the underlying causation of the event and demonstrating that there was indeed a loss of productivity.

2. Determine Causation

Determining the underlying causation involves investigating the source of a disruption. This can be a relatively straightforward exercise for some impacts. For example, if a piling subcontractor is experiencing lower productivity than planned, it could be the result of encountering unknown subsurface conditions. When planning the piling works, the contractor would likely have relied on geotechnical studies. If it can be determined that geotechnical data failed to identify the substrata experienced, then this could be the likely “cause” of the lower productivity.

Once the cause is determined, a review of the contract may determine which party bears the risk for the geotechnical information provided. Simply, if the contractor bears the risk, then the loss is not excusable, and conversely, if the owner bears the risk, then the loss may be excusable.

Conversely, it can be difficult to establish a causal link between nebulous concepts such as alleged mismanagement or the combined effects of multiple changes to the disruption. In these cases, parties may be more reliant on fact and expert witness testimony or industry studies to evidence the “cause” followed by an analysis of the contract to understand which party bears the risk.

3. Demonstrate Loss of Productivity

Demonstrating a loss of productivity is inherently a comparative exercise; it establishes that there was reduced output compared to a baseline. While there is no single industry standard for measuring lost productivity, various methodologies have been developed to demonstrate this loss, each with varying accuracy and acceptance in the industry. The SCL Protocol provides guidance on the assessment of disruption, and although not authoritative, is commonly used in Canada as persuasive authority in advancing (or defending) a disruption claim.

The SCL Protocol distinguishes between methods that utilize actual or theoretical measurements of comparative productivity (productivity-based methods) and those that are based on analysis of planned and actual expenditure of resources or costs (cost-based methods). The SCL Protocol provides the table shown in Figure 1 below:

Figure 1 - SCL Protocol List of Common Methods of Disruption Analysis^[2]

Productivity-based methods analyse experienced productivity against a baseline which is either established through the project in question or against outside sources, and only then calculates the loss of productivity and the resulting damages.  Conversely, cost-based methods focus on the difference between the planned versus actual cost, without necessarily considering time-unit productivity.

The SCL Protocol considers productivity-based methods more “robust” than cost-based approaches but acknowledges that certain project circumstances may require or favour the use of a cost-based method.^[3]

Productivity-based methods

a.Project Specific Studies

Project-specific studies utilize the data generated during project execution to determine actual productivity levels experienced by the contractor. These actual productivity levels are compared against a baseline productivity level. Each of these methodologies is dependent on the quality and availability of project records. A brief overview of some of the more common project specific study methodologies is contained below.

1. Measured Mile Analysis:^[4] This approach involves comparing the productivity achieved in an unimpacted period or scope of work, the “measured mile”, against the allegedly impacted scope or period. The objective of a measured mile approach is to compare “like for like” on the same project to quantify inefficiencies.
2. A key aspect of the measured mile approach is identifying the unimpacted comparative area or period of work. At times, it can be difficult to identify this period or scope as there may simply be no one period that was completely unimpacted. In these cases, certain adjustments may be made to isolate and model the unimpacted scope for the most appropriate comparison between unimpacted and impacted work. Care should also be taken to exclude factors that may have impacted productivity that are not necessarily causally linked to the party against whom the claim is being made, such as periods of ramp-up (or learning curve) where productivity may be lower for other reasons.
3. Further, a measured mile approach can be used as a basis of comparison to a contractor’s tender assumptions related to productivity. This comparison may either support or call into question the contractor’s assumptions depending on the outcome. In this way, owners and contractors may utilize the measured mile approach to support or defend claims in different ways.
4. A measured mile approach is more readily apparent on linear or repetitive projects or scopes, such as rail, road, or cable pulling, but can be deployed in nearly any setting if implemented correctly.  Regardless of project type, it is important that contemporaneous documentation exists to perform a measured mile analysis.
5. Earned Value Analysis:^[5] This analysis involves comparing the resources required to perform a disrupted task against the planned number of resources contemplated in the bid or proposal. The resource comparison is typically made in work hours as they are most representative of the effort required for a certain task, but if work hour information is not available, the analysis may utilize cost information instead.
6. This methodology is only as good as the reasonableness of the planned resources for any activity. If the planning or tender assumptions were overly optimistic, then the resultant productivity loss could be exaggerated and subject to scrutiny. The analysis should also account for resource or schedule re-baselines made during the project period, such as owner-directed crew additions or schedule extensions.
7. Many contracts call for an earned value analysis as part of the project controls process, so if this information is appropriately captured and maintained during the project, the analysis can be performed with relative ease.
8. Programme Analysis:^[6] Well maintained resource-loaded project schedules (or programmes) provide the ability to track planned and actual utilisation of resources on a project within the scheduling software itself, most notably Primavera P6. A comparative analysis of the resource-loaded schedules will result in quantifying inefficiencies. This methodology (as with many of the others) is only as good as the underlying data input to the software.

b. Project Comparison Studies

Where there are insufficient records to create or carry out a project-specific study, then the records from other analogous projects may be used for comparison. This is referred to by the SCL Protocol as a project-comparison study. As this analysis is not based solely on the project in question, it will generally carry less weight than a project-specific study.

c. Industry Studies

Industry studies provide an expected productivity output based on surveys or studies of many projects within an industry.^[7] Typically, these are published by industry trade groups such as NECA (National Electrical Contractors Association) and MCAC (Mechanical Contractors Association of Canada), educational instructions, or government agencies. Some industry studies allow an analyst to choose certain “impact factors” to the baseline productivity levels to account for the relative difficulties of various project or field conditions.

A productivity analysis using industry studies would compare the industry productivity levels to the productivity experienced in the project at hand. Similar to the project comparison studies, an analysis based on industry studies may not be considered as strong as one based on a project-specific study, such as a measured mile analysis, if the appropriate project-specific information is available. One further challenge in using industry studies is that they may not account for the unique environmental and other challenges that are faced on the project in question.

Cost-based Methods^[8]

Cost-based methods, according to the SCL Protocol, provide the least robust support for a construction claim and are generally limited to scenarios where productivity cannot be accurately assessed using productivity-based approaches. A major drawback of using cost-based approaches (according to the SCL) is that a party may need to demonstrate cost reasonableness, particularly in relation to the tender assumptions.

Notes on Demonstrating Loss of Productivity

The choice of productivity analysis methodology is largely driven by the underlying records that are available; a measured mile relies on an uninterrupted period of productivity for the same type of work that was disrupted. Sometimes a combination of a productivity-based approach and a cost-based approach may be best for a specific set of circumstances. In short, the contract and particular situation will dictate the most appropriate approach to use as there is no one-size-fits all methodology.

4. Quantifying Increased Costs

Once the loss of productivity has been demonstrated through a comparative analysis, the resulting damages can be assembled. If the productivity analysis methodology is based on work hours, the quantification will generally be based on applying an appropriate hourly rate to the claimed inefficient work hours. A cost-based approach may simply carry the output of the productivity analysis as the claimed damages.

The method of assessing any quantum will be dictated by the circumstances of a project and the available records.

Cumulative Impact Claims

Often discussed alongside disruption claims is the idea of a cumulative impact or “ripple effect” of multiple impacts to the project. This rests on the theory that one or multiple changes on a project can have a ripple effect and disrupt unchanged work (think “death by a thousand cuts”). Contractors may build some buffer into their project costs and schedule to account for minor changes, however, when the volume of changes becomes so great to disrupt unchanged work, a contractor may choose to pursue a cumulative impact claim.

It is often difficult to prove the impact of such changes to productivity of unchanged works. Therefore, cumulative impact claims generally involve a total productivity or cost analysis. A total productivity or total cost analysis will quantify all work hours or costs above the plan and claim the costs for that total overrun.

Total cost (and modified total cost) ^[9] claims have a reputation as being overly simple to determine damages and are therefore less favoured than other, more analytical, approaches. While the specifics vary by jurisdiction, a total cost or modified total cost claim may be tested to determine the validity of the total cost or total productivity approach, which involves meeting the following four conditions:

1. It would be impractical to prove actual losses directly,
2. The bid was reasonable,
3. The actual incurred costs were reasonable, and
4. The claimant party was not responsible for any added costs (or productivity impacts).

Quantum methodology aside, a cumulative impact claim should demonstrate that the impact of multiple changes resulted in project-wide disruption. Recently in Walsh Construction v. Toronto Transit Commission et al 2024 ONSC 2782 [Walsh] the court considered the cumulative delay impact caused by changes and RFIs on a project.^[10] An observation identified by the court was set out in paragraph 32, which states:

[32] Dr. William Ibbs, who was called by TTC and qualified as an expert in loss of productivity and disruption damage claims in the construction context, agreed with the proposition that the greater the change activity over the life of a project, the greater the probability of delay and extra cost. In an article written by him in 2008, marked as Exhibit 1457, he wrote that “[a]lmost every change to a construction project has some effect on the project’s cost and schedule” through “[t]he actual direct cost and time of performing the change” and “[t]he impact the change may have on other unchanged or contractual work because of delay, disruption, change of sequence, lack of resources, etc.” He further wrote that “[w]hen numerous changes occur, there is a compounding and negative effect commonly called ‘cumulative impact.’” In another article from 2013, marked as Exhibit 1458, he wrote that “when the amount of change labor hours approaches 10% of the original labor budget, warning bells should start to sound.” There is no doubt that the change in labour hours greatly exceeded ten percent of the original labour budget for most of the subcontractors.

[emphasis added]

Considering the above, the court found a [Bechtel] report on the number of RFIs and changes on the project compelling evidence of disruption and delays. At paragraphs 35 to 37 the court remarked:

[35] Bechtel, after stating that the status and statistics of RFIs are a good metric for the maturity of the design on most construction projects, concluded that based on the large number of RFIs associated with the design and the processing time for the RFIs, the bulk of the station delays were attributable to the overrun of tunnel boring contracts and the design not being as complete as described at award, resulting in substantial RFIs and CDs as well as excessive response times on RFIs as the primary contributors. The status of the design was identified as a central aspect of the delivery challenges.

[36] Bechtel did its own analysis of the station RFI logs and concluded that the average response time across all stations was 42 days, with 11 percent over 90 days. The response profiles were similar across all stations. It recommended that the cycle times on RFIs be reduced and that the designers’ response times be expedited to minimize the number of RFIs remaining open beyond 15 days.

[37] The Bechtel Report concluded that the number of post-issued-for construction design changes reflected in the number of RFIs was in the thousands, rather than the more-typical hundreds, based upon insufficient constructability reviews.

This decision serves as an example where the courts agreed that the cumulative effect of changes can impact project execution. Each project is unique, and a detailed review of the nature and extent of project change documents (such as change orders and RFIs) may be more compelling in a cumulative impact claim than merely presenting the total count of documents.

PART B: Concurrent Delay

Concurrency is a commonly argued concept when putting forth or defending against a delay claim. This contentious issue in construction arises when both contractor and owner impacts have the same effect on the critical or near-critical paths to completion. ^[11]

The complex nature of concurrent delays can make it challenging to accurately quantify the delays and ultimately determine responsibility. Many readers may be familiar with the “concurrency defence” where a claim is dismissed with a metaphorical hand wave by pointing out non-excusable issues encountered on the project, regardless of whether these issues actually impacted the critical path.

This article examines some of the fundamental aspects of concurrent delay, including:

• Reviewing the various definitions of concurrent delay,
• Identifying concurrent delay, and
• Recent case law that sheds light on how courts in Canada are addressing concurrency.

Defining Concurrent Delay

The complexity of assessing concurrent delay begins with a lack of clarity on how concurrency is defined for construction delays. Without a clear definition, differing views of concurrency have arisen both in terms of scheduling and in assessing legal entitlement to an extension of time (“EOT”). These divergent views are readily apparent when searching for industry accepted definitions of “concurrent delay”, including:

• The SCL Protocol,
• The Association for the Advancement of Cost Engineering International Recommended Practice No. 29R-03 Forensic Schedule Analysis (“AACEi 29R-03”), ^[12] and
• The American Society of Civil Engineers Standard 67-17 Schedule Delay Analysis (“ASCE 67-17”).^[13]

The SCL Protocol provides two broad definitions. The first definition is for so-called "true” concurrent delay, and the second provides a “more common” description of concurrency:

10.3 True concurrent delay is the occurrence of two or more delay events at the same time, one an Employer Risk Event, the other a Contractor Risk Event, and the effects of which are felt at the same time. True concurrent delay will be a rare occurrence. A time when it can occur is at the commencement date (where for example, the Employer fails to give access to the site, but the Contractor has no resources mobilised to carry out any work), but it can arise at any time.

10.4 In contrast, a more common usage of the term ‘concurrent delay’ concerns the situation where two or more delay events arise at different times, but the effects of them are felt at the same time.^[14]

Moving to the AACEi 29R-03, we encounter five different definitions within the same document. The document presents a selection of differing opinions and applications associated with concurrent delay:

(1) Two or more delays that take place or overlap during the same period, either of which occurring alone would have affected the ultimate completion date. In practice, it can be difficult to apportion damages when the concurrent delays are due to the owner and contractor respectively.

(2) Concurrent delays occur when there are two or more independent causes of delay during the same time period. The “same” time period from which concurrency is measured, however, is not always literally within the exact period of time. For delays to be considered concurrent, most courts do not require that the period of concurrent delay precisely match. The period of “concurrency” of the delays can be related by circumstances, even though the circumstances may not have occurred during exactly the same time period.

(3) True concurrent delay is the occurrence of two or more delay events at the same time, one an employer risk event, the other a contractor risk event and the effects of which are felt at the same time. The term “concurrent delay” is often used to describe the situation where two or more delay events arise at different times, but the effects of them are felt (in whole or in part) at the same time. To avoid confusion, this is more correctly termed the “concurrent effect” of sequential delay events.

(4) Concurrent delay occurs when both the owner and contractor delay the project or when either party delays the project during an excusable but non-compensable delay (e.g., abnormal weather). The delays need not occur simultaneously but can be on two parallel critical path chains.

(5) The condition where another delay-activity independent of the subject delay is affecting the ultimate completion of the chain of activities.^[15]

Lastly, the ASCE 67-17 offers that:

8.1 Concurrent delay can be described as a situation where two or more critical delays are occurring at the same time during all or a portion of the delay time frame in which the delays are occurring.^[16]

While the definitions contain nuanced differences between each other, they can be distilled into a few common themes in the context of construction claims:

• Concurrent delays involve delays occurring at the same time or in the same analysis period,
• The concurrent delays would cause a movement of the contractual completion date (or another contractual milestone that is being measured), and
• The concurrent delays would each cause critical path delay if the other did not exist.

The difficulty in defining concurrent delay has fuelled uncertainty in construction disputes and left the concept of concurrent delays open to exploitation. The next sections will shed light on how these different approaches are implemented and present situations where the “concurrency defence” may be overcome using the documents in the project record outside the schedules themselves.

Identifying Concurrent Delays

Project schedules can have a seemingly infinite number of moving parts, and forensic schedule analysis attempts to identify when and where delays occur within these elaborate schedule networks. While a forensic scheduling expert will strive for accuracy in their analysis, the SCL Protocol cautions that virtually no analysis will be perfect:

Delay analysis is rarely precise down to the day (or even few days). The application of common sense requires that the margin for imprecision should be taken into account in reaching a conclusion on concurrency. ^[17]

The Canadian courts have acknowledged this “common sense” approach to the practical complexity in identifying and assessing concurrent delays. This was eloquently summarized by Justice Hood in Walsh: 

A construction project of any complexity consists of a multitude of moving parts. Work can be carried out at the same time at a number of locations; it is not simply a linear process like the building of a Lego model. A delay on one aspect of a project may not have an impact on its ultimate completion date because there may be other delays happening concurrently that are, in the scheme of things, more important or critical to the eventual completion of the project.

Even a robust schedule analysis will involve some amount of subjectivity. A clear and rational opinion, based on the contemporaneous records and facts of the cast, rather than a non-sensical one simply based on the schedules alone, would be more acceptable to the trier of fact. An analysis is strengthened by ensuring that it is well reasoned and considers the available information in the contemporaneous project record, in addition to the project schedules.

The following subsections discuss some of the factors that a forensic scheduling expert could consider, within both the project schedules and the contemporaneous project record, in identifying and apportioning concurrent delays. These factors include:

• The Literal and Functional Theories of concurrency,
• Pacing delays,
• Acceleration measures, and
• The “but for” concurrency argument.

 

1. Literal and Functional Theories of Concurrency

Concurrency is based on the idea that multiple delays are impacting a project’s critical path at the same time. However, there are different interpretations of what “at the same time” means to an analyst. While two or more events are occurring on the same calendar day, these events are what AACEi 29R-03 refers to as “literal” concurrency. However, if the events merely occur within the same analysis period,^[18] they are said to have “functional” concurrency. AACEi 29R-03 explains:

Under the Literal Theory, the delays have to be literally concurrent in time, as in “happening at the same time.” In contrast, under the Functional Theory, the delays need to be occurring within the same analysis period.

Of the two, the functional theory is more liberal in identifying and quantifying concurrency since the delays need only occur within the same measurement period, while in the literal theory, only delays require same-time occurrence.

Considering the SCL Protocol definitions cited previously, it also differentiates between “literal” and “functional” approaches (definition repeated below for ease of reference):

10.3 True concurrent delay is the occurrence of two or more delay events at the same time, one an Employer Risk Event, the other a Contractor Risk Event, and the effects of which are felt at the same time. True concurrent delay will be a rare occurrence. A time when it can occur is at the commencement date (where for example, the Employer fails to give access to the site, but the Contractor has no resources mobilised to carry out any work), but it can arise at any time.

10.4 In contrast, a more common usage of the term ‘concurrent delay’ concerns the situation where two or more delay events arise at different times, but the effects of them are felt at the same time.^[19]

The AACEi 29R-03 Literal Theory is commensurate with the SCL Protocol “true” concurrent delay definition, while the AACEi Functional theory is more consistent with the SCL Protocol “common” definition.

The Literal or “true” theories insist that, to demonstrate concurrency, the delay events must occur at the same moment in time. An example implementation of the AACEi Literal Theory or SCL “true” theory on delays to a condominium tower is demonstrated in the following Figure 1:

Figure 1 - Literal Theory of Concurrency Example

In Figure 1 above, the two-month period from the start of Month 5 through Month 6 is being analyzed for delay. The project had two separate delays which impacted critical paths to completion: a one-month delay from the structural steel subcontractor failing to mobilize during Month 5, and a one-month delay to the delivery of owner-supplied equipment during Month 6. Under the AACEi Literal Theory or SCL “true” theory, these delays are not occurring at the same time and are therefore not concurrent. The analysis would assign one month of non-excusable, non-compensable delay to the contractor for failing to mobilize its subcontractor, and one month of excusable, compensable delay to the owner for the late owner-supplied equipment rather than 2 months of concurrent delay in the analysis period.

Although the delay days may appear to be a “wash” in this period, as both parties are allocated one month of delay responsibility, the allocation remains an important factor when determining delay damages. If one party’s alleged delay damages (or liquidated damages) are higher than the other, the result is no longer a simple offset, and one party may be at a net loss position because of this critical path delay allocation.

In contrast, the Functional Theory considers delays across the entire analysis period to identify concurrency, as illustrated in Figure 2, below.

Figure 2 - Functional Theory of Concurrency Example

The above Figure 2 shows the same project delays and analysis period as the AACEi Literal Theory and SCL “true” theory in Figure 1, but will yield different results. The AACEi Functional Theory and SCL common theory state that delay events attributable to opposing parties across an entire analysis period can be considered concurrent. As a result, the Month 5 steel subcontractor mobilization and Month 6 owner-supplied equipment delays are considered concurrent during the two-month analysis period. The analysis would conclude that, in this period, the contractor would be entitled to a two-month EOT and associated relief from owner liquidated or delay damages but not entitled to claim for its own delay damages.

The choice between these theories can significantly influence the outcome of delay claims. Both theories have seen success in different jurisdictions, although the Walsh decision seemingly favored the AACEi Functional Theory and SCL common theory.

While both the Literal and Functional Theories are grounded in the project schedules, it should first be determined if the delays are actually causing critical path delay prior to determining whether they are concurrent. For example, if an owner knows that it is responsible for excusable delay in a period, it may try to argue that the contractor encountered its own, non-excusable delay in this same period (either simultaneously under the Literal Theory or simply within the analysis period under the Functional theory).

Here, a careful review of the project record may support or reject an argument for concurrency if the assertion lacks the causation required for a well-reasoned analysis. While the other party’s delay may seem concurrent at first, there may be underlying factors that render the delay non-excusable. Further, a review of the contract may show that concurrency has already been defined, and that definition should be utilized in a forensic review when determining if concurrency existed.

2. Pacing of Work vs Concurrency

Pacing occurs when a contractor or subtrade deliberately lowers its output to match a supervening delay or “parent delay”, provided such pacing does not impact the completion of the project. In this way, a contractor could potentially decrease its resources, save costs and mitigate the damages incurred during the parent delay period. AACEi 29R-03 guides:

There may be no need to maintain the original schedule in the face of a known delay caused by the other party – no need to “hurry up and wait”. In other words, it is the consumption of float created in the pacing activity by the occurrence of the parent delay.^[20]

The decision to pace or suspend a scheduled activity does not come without risk. Pacing in response to a parent delay can appear to be concurrent with owner’s delay if the schedules are viewed in isolation. Thus, a contractor may allege that it was pacing the work as a rebuttal to an owner’s concurrency argument to maintain the excusable, compensable nature of the parent delay.

It follows, then, that a contractor should be prepared to defend its pacing decision with contemporaneous documentation. It is critical for a contractor to maintain records that demonstrate a clear decision, at the time, to pace a critical or near-critical activity based on the parent delay.^[21] Failure to evidence these factors could mean that the contractor’s pacing is deemed a concurrent delay and therefore prevent the contractor from claiming prolongation costs. Ideally, a contractor should provide written notice of its decision to pace works.

A review of the contract for pacing terms and conditions should be made prior to implementing the pacing of work to determine what is allowable under the specific agreement.

3. Impacts of Acceleration on Concurrency

If a project, or part of a project, begins to fall behind its planned schedule duration, the contractor may implement certain acceleration measures. These measures aim to make up for lost time and may be voluntarily deployed by the contractor or directed by the owner.

When a schedule is accelerated, tasks are compressed or stacked to complete the project within the specified amount of time, leading to tasks being performed simultaneously to meet the original deadlines. Acceleration measures increase schedule complexity and the associated difficulty in isolating delays, which can, without sufficient contemporaneous evidence, manifest and may be considered concurrent delay.

In assessing concurrency during a period of acceleration, the project record, including the factors leading to the acceleration, should be considered. For example, if an owner refuses to acknowledge its own delays, but the owner still insists on maintaining the original completion date, the contractor may employ constructive acceleration measures to comply with the owner’s demand and may have a stronger case to claim damages in this period.

Acceleration may therefore be one of the exceptions to the rule that concurrency will only result in ‘time but no money’.

4. The “But for” Argument for Concurrency

Like the pacing defence, contractors and owners may try to employ a “but for” argument to establish concurrent delays to limit potential prolongation cost or liquidated damages exposure. In this hypothetical approach, the analyst will assert that, if the controlling critical path delay were set aside, a non-critical path delay attributable to the opposing party will only then appear as critical, and therefore the delays are concurrent for some amount of time.

This approach, sometimes referred to as a “collapsed as-built,” attempts to elevate a non-critical impact as critical. This ignores one of the prerequisites for determining concurrent delay, which is to establish that both delay events influence the critical or near-critical path of the project. Often, this theoretical exercise fails to make that determination.

Potential Damages for Concurrent Delay

Where concurrent delays are proven, the general rule is ‘time but no money’ entitling a contractor to an EOT without compensation (i.e., its an excusable, but non-compensable delay). This concept that concurrent delays should result in an EOT is confirmed in the final sentence of the tenth core principle set out in the SCL Protocol:

Where Contractor Delay to Completion occurs or has an effect concurrently with Employer Delay to Completion, the Contractor’s concurrent delay should not reduce any EOT due.^[22]

Similarly, AACEi 29R-03 provides that:

Typically, when both Contractor and Owner are concurrently responsible for an extended period of performance, the Contractor is granted an extension of contract time without compensation and the Owner forgoes the collection of liquidated/stipulated damages.^[23]

While a contractor is typically precluded from recovery of delay damages in cases of concurrency, the contractor may be able to claim additional costs arising specifically from the owner delay event, if proven to be beyond what the contractor would have incurred from its delay event, alone. The SCL Protocol guides:

Where Employer Delay to Completion and Contractor Delay to Completion are concurrent and, as a result of that delay the Contractor incurs additional costs, then the Contractor should only recover compensation if it is able to separate the additional costs caused by the Employer Delay from those caused by the Contractor Delay. If it would have incurred the additional costs in any event as a result of Contractor Delay, the Contractor will not be entitled to recover those additional costs. ^[24]

While concurrency may serve as a valid defence to shield an owner from a contractor’s prolongation claim, the time to complete will be extended, and the owner will likewise be precluded from enforcing any liquidated damages that it would normally be entitled to claim had there been no EOT.

The ‘time but no money’ concept was recently confirmed in Walsh: “However, this is complicated by the fact that there may be concurrent delays for which Walsh is responsible; these would make an excusable delay non-compensable.^[25]”

Concurrent Delay in Canada (Ontario)

Construction disputes are predominantly battled behind the veil of confidentiality in the arbitration arena, and there is relatively little definitive Canadian authority as to how concurrency should be treated. There are two recent decisions, however, which provide guidance on the Ontario courts’ approach to concurrency:

• Schindler Elevator Corporation v. Walsh Construction Company of Canada 2021 ONSC 283 [Schindler], and
• Walsh Construction v. Toronto Transit Commission et al., 2024 ONSC 2782 [Walsh].

In Schindler, Master (now Associate Justice) Robinson seemingly rejected the view that “true” concurrent delay must exist, stating that: “I do not accept … that concurrent delay requires two co-critical and co-controlling activities that are parallel in time and identical in duration.^[26]” He added that such a position on concurrent delay would, in his view, be “too rigid for use by courts, at least in more complex cases of concurrency,” and that such an application, “may unfairly result in one party being held solely responsible for delay on a project where the evidence supports a finding of multiple parties delaying the project and difficulty assessing responsibility.^[27]”

Instead, Robinson favoured the position that, “It is not necessary for the independent causes of delay to occur exactly at the same time for them to be considered concurrent. Indeed, it is rare that concurrent delays start and end at the same time. Concurrent delays are more commonly experienced as overlapping events^[28],” adding that it “is more realistic and, in terms of the court's assessment, more likely to lead to a fair and just result.^[29]”

In Walsh, Justice Hood summarised the courts approach to concurrent delays, stating that,

Concurrent delay on a project is often difficult to evaluate, since it involves evaluating how each event delayed completion of the project, which is a more involved and speculative assessment process compared to an isolated or singular cause of delay. Analysis of concurrent delay requires breaking the overall delay into its component parts and apportioning time, responsibility and costs: see Schindler Elevator Corporation v. Walsh Construction Company of Canada, 2021 ONSC 283, 17 C.L.R. (5th) 253, at paras. 301-303.^[30]

Canadian courts have adopted a more relaxed approach, recognising that concurrent delays can encompass overlapping events, and not simply be confined to simultaneous delays.

Conclusion

While this article is generally written from the perspective of a contractor claiming for delay, however, the principles apply equally to other stakeholders. An owner or party higher in the construction pyramid can apply the same principles while proactively defending a claim for delay or deciding on appropriate mitigation steps to decrease the impacts of a potential delay.

This article is for informational purposes only and is not intended to constitute legal advice or an opinion on any issues contained therein.

 

 

Any article or other information or content expressed or made available in this Section is that of the respective author(s) and not of the OBA.