Recent Changes To Time Bars And Their Impact On Industry

By Kenzie Consulting – www.kenzieconsulting.com

What is a time bar and what do recent changes mean?

Answer: FIDIC is an international standards organisation within the construction industry.

FIDIC is probably best known for its commonly used contract templates between employers and contractors on construction projects.

It is common practice to have included in this type of clause a time bar (sub clause 20.1). This clause entitles the contractor 28 days to bring a claim for time and money.

But if the contractor presents a claim out of the 28-day period, the employer was justified in ignoring the claim as it was out of the allowed period.

However, the recent case of Obrascon Huarte Lain SA v Her Majesty’s Attorney General for Gibraltar [2014] EWHC 1028 (TCC) allowed insight into the sub clause 20.1.

This case involved a FIDIC contract (with some minor amendments) for the contractor to build a road and tunnel. In this case, he had experienced problems in construction and presented a claim for additional time.

The employer argued clause 20.1 and stated that the contractor was out of time (time barred).

The important thing to look at here is – what point triggers the 28-day period?

Clause 20.1 states that the 28- day period begins from when the contractor becomes aware of the event that forms the basis of the claim.

In this case, the employer states that the 28-day period should start from when the contractor become aware of the event that forms his claim.

However, the contractor stated that the 28-day period should begin when he became aware that the event would cause delay to the project. In this case, the latter was a later date.

The Judge held in this case that the contractor’s arguments were justified.

He stated that the 28-day period should begin when a contractor becomes aware that the event will cause delay and not the event itself. Contractors are still obliged to issue a notice.

Therefore, this is advantageous for contractors when presenting a claim as the 28-day period before they are time barred may start at a later day depending on the circumstances.

Contractors should read the contract to check whether they are time barred as although FIDIC is an international contract the above could be subject to interpretation.

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The content of this article is provided for informational purposes only and does not constitute legal advice. This article is offered only for general informational and educational purposes. It is not offered as and do not constitute legal advice or legal opinions. You should not act or rely on any information contained in this article without first seeking the advice of a solicitor.