When Acceleration Costs Can Be Recovered: Motherwell Bridge v Micafil [2002]

The Technology and Construction Court’s decision in Motherwell Bridge Construction Ltd v Micafil remains an important authority on delay analysis and the recovery of acceleration costs.

The decision is particularly important where a contractor is wrongly refused an extension of time. This decision was echoed more recently in V601 Developments Pty Ltd v Probuild Constructions Pty Ltd [2021].

Background

Micafil engaged Motherwell Bridge Storage Tanks (“MBST”) under two FIDIC‑based sub‑contracts for the construction of an autoclave. During the works, Micafil introduced design changes that, according to MBST, went well beyond what had originally been contemplated under the contracts.

As the project progressed, MBST encountered delay which it said was critical to completion. Despite this, Micafil refused to grant appropriate extensions of time and insisted that the contractual completion date be maintained. Faced with the risk of liquidated damages, MBST undertook accelerated working, including night‑shift operations.

MBST subsequently claimed that it was entitled to recover the additional costs incurred because of this acceleration.

How the Court Approached Delay

The court adopted a clear and structured approach to delay analysis, identifying two key questions:

1. Was the relevant delay on the critical path?

2. If so, was the delay caused by the contractor?

On the evidence, the court found that the delays were on the critical path and were not caused by MBST. The consequence was twofold. First, MBST was entitled to recover prolongation costs. Second, Micafil was not entitled to levy liquidated damages.

This aspect of the judgment is notable for its express endorsement of the approach taken in Henry Boot v Malmaison, reinforcing the courts’ commitment to a consistent methodology in dealing with construction delay.

Recovery of Acceleration Costs

The more significant aspect of the decision concerned MBST’s claim for acceleration costs.

The court held that MBST was entitled to recover the additional costs it had incurred by accelerating the works to avoid liquidated damages. Crucially, this entitlement arose even though there was no express agreement between the parties requiring acceleration.

The court accepted that where:

• a contractor is wrongly refused an extension of time; and

• accelerates the works to mitigate the risk of liquidated damages,

the resulting acceleration costs may be recoverable as damages.

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Why the Decision Matters

The judgment provides important support for contractors faced with unreasonable refusals of extensions of time. While the concept of “constructive acceleration” has long been recognised in the United States, this case confirms that English courts are prepared to reach a similar outcome in appropriate circumstances.

The concept of constructive acceleration is not recognised under English law, as most standard forms of contract contain express provisions governing delay mitigation and acceleration, which ordinarily requires an express instruction to accelerate.

What Motherwell Bridge Construction Ltd v Micafil and V601 Developments Pty Ltd v Probuild Constructions Pty Ltd have in common, is that the acceleration costs due to the employers’ breach of contract in failure to award and extension of time are recoverable as damages.

For employers and contract administrators, the decision is a reminder that insisting on completion dates without properly addressing entitlement to extensions of time can carry significant consequences. For contractors, it confirms that acceleration undertaken defensively, rather than voluntarily may be recoverable, even in the absence of an express instruction.

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