Noticias

In construction claims and disputes related to multi-party delays, the apportionment of liability is a crucial task for a consultant and/or expert and one that is complex enough at the best of times. Throw in the concept of concurrent delay, which has multiple definitions depending on the governing jurisdiction and industry guideline utilised, and that complexity increases exponentially. However, the ruling in Schindler Elevator Corporation v Walsh Construction Company of Canada (2021 ONSC 283) has provided clarity in Canada on definitions of concurrent delay and guidance on the application of apportionment of liability.  While not providing precedence in other jurisdictions, the case does however reflect a more nuanced evaluation of concurrent delays, which may provide guidance for fair analysis in other jurisdictions. 

Author: Andrew Palmer, Senior Consultant, Calgary, Canada

In Schindler, Walsh Construction was contracted in 2010 to redevelop the Women’s College Hospital in Toronto, Ontario. Schindler Elevator Corporation was subcontracted by Walsh to fabricate, deliver, and install all the elevators for the new building.

At the completion of the project, Schindler alleged that Walsh had not paid for certain services and materials provided by Schindler. Walsh countered that Schindler had caused a delay to the project and thereby caused Walsh to incur losses. The accompanying delay analysis submitted by Walsh showed concurrent delay caused by multiple subcontractors. Walsh thusly claimed that Schindler was liable for an equitable proportion of damages.

Schindler’s defence went to the heart of the principle of concurrent delay. The subcontractor claimed that for a delay to be considered concurrent, the delay had to start at the same time and end at the same time, a concept commonly referred to as True Concurrency.  

It was this defence that compelled the court to acknowledge the rareness of True Concurrency and that it was only a fair and equitable expectation that concurrent delays “are more commonly experienced as overlapping events". 

Ultimately, the Court found that Schindler was in delay and had consequently delayed interrelated successor activities. Walsh was accordingly granted set-off damages. However, Walsh was also found to have not sufficiently substantiated that Schindler caused delay and so the majority of Walsh’s claimed damages were found to be not proven. The decision was a true validation of the complexity inherent in establishing concurrent delay. Essentially, each individual event must be proven to have been a determinative cause of a critical path delay.  

As a result of Schindler, there is now a certain degree of alignment in Canada, that the definition of concurrent delay that requires the delay to exhibit True Concurrency is too narrow to be practically applied with any sense of fairness. A more flexible approach to the definition of concurrent delay is required. The implication of only considering True Concurrency in any analysis is that only one party would be held liable for the delay, which may not be a fair reflection of actual events.  In essence, the court has acknowledged the complexity of concurrent delays. 

How concurrent delay is defined and apportioned varies around the globe, but all delay analysts ought to consider the lessons of Schindler and its illustration of the complexity of concurrent delay analysis, as well as the value of rigorous project record-keeping in proving any such analysis.

This article was originally written for issue 29 of the Diales Digest. You can view the publication here: https://www.diales.com/diales-digest-issue-29