Delay versus disruption: A slice of legal advice
Contractors could file stronger claims if they knew the difference between delay and disruption and took steps to identify them within the context of construction schedules
Delay and disruption often occur together, but they are quite distinct issues. Delay, as it sounds, is being late. Disruption on the other hand, is a change to the planned working method.
It is generally accepted that for a contractor to be entitled to an extension of time for completion of works, an event for which the client is responsible must have had an impact on the critical path of the works — in so far as it requires that the date for completion be amended or that activities are accelerated to meet deadlines.
A disruption has been suffered where the work is carried out less efficiently than it would have otherwise been, had the disrupting event not have occurred.
If the client has caused the disruption, the contractor may claim the additional costs he suffers as a result of the inefficient working. Rarely is this claim an express contractual entitlement, and it usually arises as a breach of contract claim. It is an implied term of the contract that the client will not prevent the contractor carrying out the works he is contracted to do.
Delay and disruption also differ in the way they are compensated. A contractor who suffers a delay to the completion date due to the client may claim for prolongation — a longer time on site. These costs will necessarily be time-related costs: those which are incurred on the basis of the time they occurred at; for example, the daily or weekly cost of plant or site facilities, home office overheads, and supervision staff.
The contractor who suffers disruption will claim he would not have incurred the costs he has incurred if not for the disruption. It is usually necessary to identify these as the actual costs incurred, with a mark-up for profit where allowed.
Difficulty arises in evidencing that the disruptive event, or more often plurality of events, have caused the inefficient working. Disruption often manifests in out-of-sequence working and work-area congestion. The same issues can arise, however, from poor site management and lack of resourcing. Consequently, a claim for disruption can never be as simple as the difference between what was planned and what actually happened.
Evidencing the extent of the disruption may be by measure, with the actual progress of the undisrupted work against the progress of the disrupted work.
This technique is known as the ‘measured mile’, and might not be possible for projects where — once the learning curve has been omitted — there are insufficient undisrupted works against which to measure. The next best approach might be for the contractor to evidence the degree of disruption by comparing planned productivity with the actual productivity achieved during the disruption-impacted period. But this is not without its problems either: who’s to say the contractor’s plan was achievable?