Programme Evidence for Prolongation Claims

A number of interesting programming issues were discussed in the English case of Costain v Haswell [2009]. In particular the Court gave some helpful guidance on the required content of programming and delay analysis to support a successful claim for prolongation damages.

The case itself involved claims by a Contractor against its Designer regarding the foundations of structures at a new water treatment plant at Lostock. These structures were the Gravity Filters Building (RFG) and Inlet Works (IW). Notably there were 8 other major structures at the Lostock plant, together with additional facilities at a separate site in Rivington. All of which were included in the Contractor's agreement with the local water authority.

In essence the Contractor claimed that the original design for the foundations of the RFG and IW structures was flawed. As such, the Designer was negligent and/or in breach of contract. The original design included pre-loading for a period of 6-8 weeks. However, after the pre-load material was removed it was found that consolidation had not been achieved as hoped and settlement would be a problem.

As a consequence the foundations had to be redesigned to incorporate 339 piles. Amongst other things, the Contractor claimed that this caused delay of 12 weeks to the foundations of the RFG and IW structures. Since these were critical to overall completion, the whole project was delayed by the same amount. In light of this the Contractor sort damages equivalent to the whole of its site overheads for the entire 12 week period.

Ultimately the Court did indeed find the Designer was in the wrong. It also held that the critical delay period was in the order of 8 weeks, but interestingly, only allowed the Contractor to recoup a fraction of its prolongation claim. The reasons underpinning the Court's decision are discussed below, along with some other programming issues raised in the judgment.

Tracing the impact of a delay event through to actual completion

The Court held that to succeed in its prolongation claim the Contractor should have adduced evidence that the critical 8 week delay suffered whilst redesigning the foundations and installing the new piles for the RFG and IW structures, as a matter of fact, carried through to the very end of the project some 16 months later. The Court was uncertain whether this critical 8 week delay, locked in to the programme at the end of the event, was later mitigated to some degree or not, or perhaps even exacerbated by subsequent events. Since the Contractor did not do this, the claim failed for lack of proof. The Court could not be satisfied that any actual damage was suffered as a direct result of the flawed design.

This suggests that a successful prolongation claim, even in relation to a single critical delay event at the start of a project, may need to be backed up by a more comprehensive analysis tracing critical path delay through to the very end of the project. Presumably this would help demonstrate a sufficient link between 'cause' and 'effect' to satisfy the burden of proof.

The whole of the site must be delayed if claiming associated general site overheads

In this case the Court held that for the Contractor to recoup the whole of its general site overheads for the critical 8 week delay period, it would have to show that the whole of the site was also delayed. Since the Contractor had only been able to show that 2 of the structures at the Lostock site were delayed, and despite these being on the critical path overall, it had not demonstrated that any of the other 8 structures were affected.

In making its decision the Court distinguished the current situation from an extension of time claim. The Court stated that for a successful extension of time claim:-

"...the Contractor needs to establish that a delay to an activity on the critical path has occurred of a certain number of days or weeks and that that delay has in fact pushed out the completion date at the end of the project by a given number of days or weeks, after taking account of any mitigation or acceleration measures. If the Contractor establishes those facts, he is entitled to an extension of time for completion of the whole project including, of course all those activities which were not in fact delayed by the delaying events at all, i.e. they were not on the critical path".

In contrast the situation with respect to a claim for damages on account of delays was held to be rather different. The Court said that:-

"...the Contractor needs to show the losses he has incurred as a result of the prolongation of the activity in question. The Contractor will not recover the general site overheads of carrying out all the activities on site as a matter of course unless [it] can establish that the delaying event to one activity in fact impacted on all the other site activities. Simply because the delaying event itself is on the critical path does not mean that in point of fact it impacted on any other site activity save for those immediately following and dependent upon the activities in question".

Ultimately the Contractor recouped about 13% of its claimed general site overheads. This equated to the proportion in value of the 2 affected structures compared to the whole of the Lostock works.

This decision therefore suggests a more expansive delay analysis is required when claiming prolonged general site overheads. Unlike extension of time, which can be demonstrated by focusing on what delayed the critical path, a claim for prolonged general site overheads requires a more comprehensive analysis of critical and non-critical works (and their associated resources). This would be particularly so when the project comprises a number of independent elements, like the water treatment plant in this case.

The time-impact approach

The programme experts in the case both agreed that the best way to analyse delay with respect to the Contractor's prolongation claim was via the 'time-impact' or 'windows-time-slice' approach. These methods are similar, but not identical, and it seems that one expert chose the former while the other chose the later.

While there was substantial agreement between the experts, the Court ultimately indicated a preference for the time-impact approach as espoused in the Society of Construction Law's Delay and Disruption Protocol. The Court found the time-impact approach in the current case to be "...more rigorous..." and "...eliminates any subjective distortion or manipulation (either advertent or inadvertent)...".

In doing so the Court helpfully defined the method as:-

"...considering the state of progress of the project prior to the delaying event in question and then impacting the effect of that event on the Contract Programme in order to establish the time effect of that event, in particular the delay to the Project Completion Date...".

The delay period for calculating prolongation costs

The case also reemphasised that the 'delay period' for which damages or prolongation costs are to be calculated relates to the time period when the event giving rise to the claim actually occurred. This was the 8 weeks during which time the new piled foundation design was finalised and the piles installed. The equivalent over-run period at the end of the project simply reflected the knock-on to overall completion, but not when the damage was actually suffered.