These are two alternative ways of assessing extensions of time and can have very different results. A judgment at the High Court, Mace Construction Ltd v Baltic Investment Holdings Ltd, has provided guidance on how an adjudicator is to act when deciding extensions of time. It was decided that the adjudicator can open up, revise and review extensions of time granted under clause 2.25.1 of the JCT Design and Build contract. In so doing, he is to carry out the task that the clause requires, i.e. a prospective assessment in response to the notice and particulars submitted.
This requires the adjudicator to “stand in the shoes” of the Employer / Agent. This may be a difficult task for the adjudicator, who has to travel back to a time at which the notice and particulars were submitted. It also requires the adjudicator to ignore what has happened since that date.
Often when disputes are referred to adjudication it is many months, if not years, after the original extension of time notification. At that point the adjudicator is presented with full project records, detailed programmes and sophisticated delay analysis all prepared with the benefit of hindsight. It becomes tempting to use that information to reach a decision. But with the benefit of hindsight the result is different and the question that the adjudicator is answering is also different to the one that the Employer / Agent faced at the time.
The implications of this judgment are not just relevant to the JCT contract. The JCT contract requires an estimation of a fair and reasonable extension of time if the completion date is likely to be delayed by a relevant event. This is to be done on receipt of a notice and particulars, i.e. in real time and this process is forward looking often with incomplete information. Under the NEC contract the position is even clearer, there are defined processes and timescales for the assessment of compensation events, and this is built around a prospective assessment.
The role of the adjudicator is not to be a forensic investigator armed with perfect hindsight. The adjudicator must place themselves “in the shoes” of the Project Manager at the date a compensation event is notified, and this is what the contract mechanisms require. In doing so, the focus shifts away from what is known now, and back to what was known then. And in many cases, that shift in perspective can make all the difference.
