Redefining the Concurrent Delay : Lessons from The Schindler Vs Walsh Case (Canada 2021)

Concurrent delays in construction:

Before we delve into Schindler Elevator Corporation v. Walsh Construction Company of Canada (2021 ONSC 283), let us look at the concurrent delays in construction disputes.

What is a concurrent delay?

According to the SCL’s Delay and Disruption Protocol, 2nd Edition, “a concurrent delay is a situation in a construction project where two events cause a delay simultaneously, with one event being the responsibility of the employer (Employer Risk Event) and the other the responsibility of the contractor (Contractor Risk Event)”. This is called true concurrency

AACEI Recommended Practice (RP) 10S-90 describes concurrent delays as, ” Concurrent delays occur when there are two or more independent causes of delay during the same time period, but not necessarily within the exact timeframe”. This is called overlap concurrency

The third type of concurrent delay is defined as two independent delays (one caused by the contractor and the other by the owner) occurring one after the other on the same critical path. The first delay affects the critical path, and then the second delay follows in a different time period. Both delays cause the same time deferment and are leading the critical path. This scenario is known as a sequential, concurrent delay.

Dealing with Concurrent delays:

The construction industry has an ongoing debate about dealing with concurrent delays. Concurrency is sometimes used as an argument to avoid liability for delays. The Society of Construction Law (SCL) suggests granting (EoT) but no additional costs in cases of true concurrent delays.

The case of Schindler Vs. Walsh in Ontario, Canada, has been a significant reference where Grenier’s analysis influenced the court’s decision in “EVALUATING CONCURRENT DELAY: UNSCRAMBLING THE EGG” from the Construction Law Letter, Vol 26 , No. 6, setting a precedent for handling concurrent delays.

Background to the case :

Walsh Construction, in partnership with Bondfield Construction Company Limited (“WBP”), began construction for the new hospital in Ontario. The project involved the demolition of the old hospital and the construction of a new one. WBP subcontracted Schindler to provide ten elevators for the new hospital facilities. However, due to multiple delays in the project, WPB filed a claim against Schindler for failing to meet their contractual performance and causing delays to the project. Schindler filed a lien claim for approximately $1 Million for non-paid service and material and WPB counterclaimed that for $2.2 Million for breach of contract and delaying the project.

The Concurrent Delay case:

Schindler stated that when they started the work, the project was already delayed due to other several events that were out of Schindler’s direct control. Schindler delay expert provided a report showing that Schindler delays were concurrent to other delays. The definition of concurrency in this case was two co-critical, co-controlling activities with the same timing and duration, the defination that conforms to true concurrancy.

WPB acknowledged the concurrency but claimed that Schindler caused damages to the project by non-compliance to the contract and the failure to achieve the contractual performance, which led to the delay of other trades and the project’s completion.

The court decision :

Reconsidering concurrent delays

The court’s decision disregarded Schindler’s expert testimony about the concurrent delay. Instead, the court adopted Grenier’s analysis of Concurrent Delays. The court decided 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.”

The court also stressed that evaluating concurrent delay liabilities in complex multi-trades and multi-delays situation is a complex and speculative process compared to isolated or singular delay causes. The court leaned toward a more flexible definition of concurrency that will not hold one party solely responsible for delays.

Review of critical path:

In addition, to determine liability for overall project losses, it was crucial to establish that Schindler’s actions directly caused critical path delays. WPB was responsible for proving that Schindler’s delays were directly linked to the critical path and affected the project completion, resulting in losses to WPB.

WPB failed to prove that Schindler’s delay directly affected the critical path. The court ruled that Schindler didn’t impact the project completion but breached the contract by not fulfilling their performance obligations.

Accordingly, the court dismissed the 2.2 Million claims of WPB, assessing the concurrent delays and apportioned responsibilities between the parties. The net result was that WPB paid Schindler approximately $650K instead of $1 Million.

Lesson Learned :

• Align with Contractual Terms: Understanding the contract’s language on delays is vital. Courts often refer to these terms when deciding the scope of excusable and compensable delays.
• Concurrent Delay Misconception: The court rejected the notion that concurrent delay always involves co-critical, co-controlling activities with identical timing and duration. Real-world delays often overlap rather than coincide precisely.
• Lack of Clear Evidence: There was no definitive proof that Schindler materially contributed to the critical path delay. The connection between Schindler’s actions and the overall project delay wasn’t adequately demonstrated.
• Comprehensive Approach: Experts must consider not just the timing but also the nature of delays, their impact on the project’s critical path, and the contractual obligations of involved parties.

References

Ontario Court underlines the evidence and analysis required to establish critical path delays.

New Guidance for Assessing Concurrent Delay on Construction Projects

Gernier’s Report: Evaluating concurrent delays: unscrambling the eggs

Schindler Elevator Corporation v. Walsh Construction Company of Canada, 2021 ONSC 283