Question 2 of 6: Litigation

Question 2: Litigation (20 marks)

Question text not reproduced: the examination questions are © Engineers and Geoscientists BC. Open the official past paper (linked at the top of this page) to read the question, then follow the worked solution below.

A delay claim is a request for more time, more money, or both, founded on the argument that the work took longer than the contract contemplated for a reason the claimant did not assume the risk of. Almost every such claim can be traced to one of four families of cause. The first is owner-side interference with the work: late or piecemeal release of drawings, slow answers to requests for information, late delivery of owner-supplied equipment, restricted or late site access, and the accumulation of change orders whose schedule effect is never priced at the time they are issued. The second is differing site conditions — rock where boreholes showed till, contaminated soil, unrecorded utilities, or a groundwater regime that the geotechnical report understated. The third is events that neither party controls: abnormal weather, labour disputes, permit and regulatory delay, force-majeure events and, as the last few years have made routine, supply-chain failure on long-lead equipment. The fourth is contractor-side performance, meaning under-resourcing, low productivity, defective work requiring rebuilding, subcontractor failure and simple over-optimism in the tendered programme.

What turns a cause into a dispute is usually not the event itself but the way the contract handles it. Claims proliferate where the baseline programme was never accepted, where the specification and the drawings conflict, where notice provisions are onerous but unenforced until the end of the job, where the risk of subsurface conditions is disclaimed rather than allocated, and where progress payments lag far enough behind the work that the contractor is financing the owner. The claim is then argued retrospectively on records that were never kept for the purpose.

Contractual modifications that reduce delay claims. The most effective changes are those that force the schedule consequence of an event to be dealt with while the event is still fresh. A baseline schedule submittal and acceptance clause, with a defined level of detail, a required critical path and monthly updates in native file format, removes the argument about what the plan was. A float-ownership clause states plainly whether float belongs to the project (first come, first served) or is shared, which decides a large fraction of concurrency disputes before they begin. Time-impact analysis on every change order requires the parties to price the schedule effect of a change at the moment it is priced commercially, so extensions of time are granted or refused contemporaneously; CCDC 2 GC 6.5 already contemplates this, and the supplementary conditions should make it mandatory rather than optional. A weather baseline defined against Environment and Climate Change Canada normals for the nearest station converts "abnormal weather" from an argument into an arithmetic comparison. Realistic notice periods that are actually administered, a differing-site-conditions clause that shares geotechnical risk rather than disclaiming it, an agreed schedule of daily and weekly delay damages or a no-damages-for-delay carve-out, and prompt payment with reduced or phased holdback all lower both the frequency and the temperature of claims. Partnering workshops and a standing dispute review board complete the picture: the cheapest claim is the one settled while the crew is still on site.

Approaches to settlement. Resolution normally escalates through the ladder above. Direct negotiation between the site teams settles most claims and costs almost nothing. Failing that, CCDC 2 Part 8 requires the Consultant to give a written finding, and either party may call in a project mediator whose finding is binding unless a notice of arbitration follows within the stated period. Statutory adjudication, now in force under Ontario's Construction Act and being adopted across other provinces alongside prompt-payment legislation, produces an interim binding determination in roughly thirty working days and is designed to keep money moving during the job rather than settle the matter finally. Mediation is a facilitated settlement with no imposed outcome. Arbitration under CCDC 40 gives a private, technically competent decision-maker, a confidential record and very limited grounds of appeal. Litigation is the residual route: public, procedurally complete, and by a wide margin the slowest and dearest. A dispute review board constituted at the outset sits alongside this ladder and issues non-binding recommendations as issues arise, which on large infrastructure jobs has a strong record of keeping disputes off the later rungs altogether. Whatever the route, the claimant must still prove three things independently: entitlement under a contract clause, causation linking the event to the critical path, and quantum supported by records.

Delay analyses used to validate and judge the claim. Forensic schedule analysis exists to answer the causation question, and the method chosen materially changes the answer, which is why AACE RP 29R-03 and the Society of Construction Law Protocol both insist that the method be declared and justified. The as-planned versus as-built comparison simply lays the accepted baseline against what actually happened and attributes the difference; it is quick, intuitive and weak, because it makes no allowance for a critical path that moved. Impacted as-planned inserts fragnets representing the claimed events into the baseline and measures the resulting extension; it is prospective, ignores the contractor's own delays, and is generally treated as a contractor-favourable method. Collapsed as-built, or "but-for", starts from the as-built programme and removes the claimed events to show what would have happened without them; it depends entirely on the quality of the as-built record and on the logic retrofitted to it. Time impact analysis, the windows or contemporaneous-period method, updates the programme to the day before each event, inserts the event, and measures the movement of the completion date; it is the most defensible and the most laborious, and it is the method the Protocol prefers where the records permit it. Underlying all of them is the taxonomy the analysis must resolve: whether each delay is excusable and compensable (owner-caused: time and money), excusable but not compensable (neutral events such as abnormal weather: time only), or non-excusable (contractor-caused: neither), and how to treat concurrent delay, where an owner delay and a contractor delay affect the same period. The prevailing Canadian and Commonwealth treatment of true concurrency is that the contractor obtains an extension of time but not delay damages, so the identification of concurrency is usually the single most valuable finding in the whole exercise. Robust analysis of any kind depends on contemporaneous records — daily reports, manpower returns, minutes, correspondence and the monthly schedule updates in native format — which is the strongest practical argument for the record-keeping clauses described above.