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PART 2: Delays - the Importance of Record-Keeping

In Part 1 of our Construction Disputes series, we identified that delay and quality issues are often the biggest problems for construction projects and the cause of most disputes. Delay may increase both the time for performance of the contract and the cost of performance for both the Employer, the Contractor or may be out of either party's control (such as the Great British weather).

This article will consider 1) tactics for handling delays and 2) how to minimise disputes.

Tactics for Employers in Handling Delays

Your approach as an Employer will differ depending on whether the delay is a critical delay or a noncritical delay i.e. whether the delay will impact on the critical path and affect the duration of the project and the completion date. We advise that you need to first consider which of these is at play.

Tactics to consider for non-critical delays:

• Is there any provision within your modified contract to award bonuses for KPIs? If so consider writing to the contractor or bringing this provision to its attention at the next meeting. This may prevent further delays from occurring in the future;
• Within the same correspondence highlight the obligation placed on the contractor for early warning of delay and requests for extensions of time;
• Acceleration of works to ensure that the critical path is not affected; and
• Increased monitoring.

Main Consideration: Incentivise the contractor and start working collaboratively so that the critical path is not affected

Tactics to consider for critical delays:

• Invoke liquidated damages provisions;
• Consider awarding bonuses for earlier completion;
• Threat of loss of work in the future or a promise of extra work in the future; and
• Issuing a pay-less notice.

Main Consideration: Ensure that the project is completed as soon as possible at minimal cost

Tactics for Minimising Disputes

Construction Litigation causes further disruption to timeframes and disincentivises contractors at a time when you need them on side the most. Disputes and delays can be minimised by:

1. Introducing a transparent and unified approach to the understanding of the programmed works;
2. Record keeping - Our bonus tip from our previous article;
3. Careful monitoring combined with regular meetings and effective site management; and
4. Collaborative working.

It is crucial to have a properly prepared and realistic programme of works approved by the Contract Administrator/Employers Agent. All too often this document is not completed to the requisite standard or alternatively is not continually reviewed and updated to record actual progress, variations and milestones in order to lock in the completion date.

We understand that good record keeping requires an investment of time and costs, we would therefore recommend that at the outset you consider and agree the following*:

the type of records required;

• who is responsible for producing and checking the records;
• how often are the records to be updated;
• who are the records to be distributed to;
• what format should they be in; and
• who has the ownership of the records.

Usually the Contract Administrator is responsible for the assessment of delay. You therefore need to arm the Contract Administrator with as much evidence as possible to support your position on liquidated damages and extensions of time. Many claims fail due to poor records.

Records should be kept of the following:

• progress meeting records;
• general meeting records;
• programme progress updates;
• marked up drawings;
• site diaries;
• handover records;
• daily weather records;
• progress photographs; and
• correspondence.

It is also important that any commentary in the records is contributed to or agreed by more than one party. This will give your delay experts the best opportunity accurately and persuasively to produce their delay analysis.

These tactics to minimise disputes apply equally to Employers and Contractors. We understand that delays happen, sometimes it is no one's fault, but without good records and a good consultancy team to support you, you will not be able to analyse the delay and deal with it appropriately.

Our bonus tip is an important one - do not delay in making payment as a tactic to incentivise Contractors unless you have issued a well-reasoned pay less notice.

*Delay and Disruption Protocol from the Society of Construction Law

For more information contact Lucy Bailey in our Business Dispute Resolution department via email or phone on 0333 207 0677. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

Learn more about our Business Dispute Resolution department here

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