Article in Building Magazine, 19 July 2002

Third time lucky?

by Melinda Parisotti

Nick Henchie (5 July, pages 46-47) left no doubt as to his views on the Society of Construction Law's protocol for determining extensions of time and compensation for delay and disruption. But, apart from its less than catchy title, is it really the antithesis of all that is good and worthy in the construction world?

Although Henchie makes some valid points, I am less inclined to condemn the protocol entirely. It contains a good deal of valuable advice, and the second draft is a notable improvement on the first. Nevertheless, it still has a long way to go. What are the main changes in the second draft and what further amendments are necessary?

The status of the document still evades all attempts to be pinned down precisely. We are no longer presented with a choice of two confusingly similar alternatives, both of which seemed roughly to amount to the protocol being used to deal with issues the building contract is unclear of. However, just as that particular fog is lifted, the second draft advises, at one point, against incorporating the entire protocol into the contract, and elsewhere advises against incorporating only part. And, despite the provision that the building contract takes precedence over the protocol in the event of conflict, the fact that the protocol introduces terms contradictory to those of standard-form contracts will inevitably cause confusion and increase claims. Surely for this reason, and to address the criticism that the protocol is overly prescriptive, it should be no more than a guide without contractual status. At the very least, it should indicate at the end of each section exactly how it conflicts with each of the standard forms.

"To address the criticism that the protocol is overly prescriptive, it should have no contractual status"

The provision that the float be used on a "first come, first served" basis in terms of employer or contractor delay caused gnashing of teeth among contractors, who tend to regard the float as their own personal lifeboat. The second draft addresses this to some extent, allowing the contractor to preserve some time exclusively for its own delay.

This new draft no longer requires that the contract administrator (CA) "approves" the programme, but instead that they "accept" it. This should take some of the heat off the CA, but acceptance still amounts to an acknowledgement that the programme is achievable, presumably making the CA partly responsible for it. This cannot be right. The programme is intrinsically linked to price. Both are contractor-controlled and both should be matters exclusively for contractor risk.

The first draft of the protocol seemed to invite parties to bolt straight off to adjudication in the event of any dispute over what constitutes the "accepted programme" – rather perplexing in a document which complained that delay issues "all too often become disputes which have to be decided by third parties". Thankfully, sanity has now prevailed and adjudication is no longer promoted as a knee-jerk reaction.

As a sop to complaints that the protocol is too prescriptive and unduly ties the CA's hands, the SCL has now emphasised the need for the CA to apply common sense and experience. However, I doubt this will prove sufficient to prevent inexperienced CAs playing safe by following the protocol in preference to their own initiative.

Most disappointingly, this second draft has done nothing to address the valid concern, expressed by Henchie and others, that the protocol places too great an administrative burden on the parties in terms of programming and record-keeping, which will inevitably increase construction costs.

The publication of the delay protocol will, ironically, be delayed until later this summer. The SCL has advised that it is being "refined" to take account of feedback received. "Refinement" sounds disturbingly conservative in view of the radical changes necessary. The protocol is a potentially useful guide with immense significance. If the SCL doesn't want egg on its face, it needs to get it right.

(Melinda Parisotti is an in-house barrister at Wren Managers, which manages a professional indemnity mutual for architects.)

Reproduced with permission from Building Magazine (http://www.building.co.uk)