the crystal ball or the microscope: Deciding on a prospective or retrospective approach to delay analysis
Manoj Bahl
In the recent case of Fluor v Shanghai Zhenua Heavy Industry Co [2018]1 the difference between prospective and retrospective approaches to the analysis of delays was considered.
Introduction Delay analysis is a widely debated element of construction law due to the number of projects that are not completed on time, the financial implications of such late completions and the often contrasting conclusions arising from the method of analysis used to assess effect of delays. Specialist delay experts are normally engaged by each party to a dispute to evaluate delay by way, ideally, of a critical path analysis. However there remains no general consensus as to which method of analysis is to be preferred and, instead, the choice is normally a consequence of the contractual, factual and legal aspects at play. These aspects are often unique to a project and, as such, add to the lack of a common approach and symmetry in selecting and undertaking a delay analysis. The facts This dispute related to the construction of 140 wind turbine generators within the Greater Gabbard wind farm off the coast of Suffolk. The Claimant, Fluor, entered into an EPC contract for the foundations and infrastructure works for this scheme and in turn engaged the Defendant, Shanghai Zhenua Heavy Industry Co, to fabricate and provide the steel foundation structures. Following delivery of these items it was discovered that there were, amongst other issues, defects in the welds of the structures which, as asserted by Fluor, led to large delays2 to the project (as well as additional costs) due to the need to employ a lengthy inspection and repair regime. The Court was required to consider the critical path before and after the defects had been discovered and whether a prospective or retrospective approach to delay analysis ought to be adopted to correctly identify the critical path and quantify the critical delay incurred. Retrospective and prospective assessments of delay A delay analysis is a forensic investigation into the events or issues that delay a project. These delays can be critical (delaying the completion date as a whole) or non-critical (affecting progress but with no direct effect on the completion date). Each method of delay analysis falls, broadly, into one of two categories; prospective or retrospective. (i) Prospective analyses (the crystal ball) Prospective methodologies (such as ‘time impact’ or ‘impacted as-planned’ analyses) involve theoretically assessing criticality and