The prevention principle is a rule of construction law that a party cannot hold the other to a contractual obligation, such as a completion date, where its own act or omission prevented performance. If an employer causes delay and there is no effective mechanism to extend the completion date, time can be set at large, meaning the contractor is obliged only to complete within a reasonable time and the employer loses the right to deduct liquidated damages.
The principal modern statement is in Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd (No 2) [2007] EWHC 447 (TCC), which explains how the principle interacts with extension-of-time clauses.
The prevention principle usually operates between employer and contractor. A professional indemnity exposure can arise because the professionals administering the contract are the ones who operate the extension-of-time machinery. If an architect or contract administrator fails to assess or grant an extension of time properly, or a quantity surveyor mishandles the loss-and-expense process, the employer may lose its entitlement to liquidated damages. The employer's loss is then channelled into a negligence claim against the professional.
Where liquidated damages are lost because time has been set at large, the sum at stake can be substantial and is often measured by the liquidated damages the employer can no longer recover, together with any actual loss it can prove. Because the loss crystallises long after the design work, notification timing and the run-off position both matter.
The professional's strongest protection against a prevention-principle claim is a contemporaneous paper trail. An architect or contract administrator who assesses extension-of-time applications on time, applies the contractual test, and records the reasoning is far better placed than one who reconstructs decisions after the event. Delay analysis should be kept with the assessment, and any employer-caused delay should be recognised and dealt with through the contract mechanism rather than ignored. Where the contract has been amended so heavily that the extension machinery no longer works, the professional should flag that to the client at the outset, because operating a broken mechanism is itself a source of liability.
For architects acting as contract administrators, and for quantity surveyors handling loss and expense, contract administration is a recognised source of claims. Apex takes account of the administration role when assessing a firm's activities and the appropriate limit of indemnity. The sector context is in the guides for architects, quantity surveyors and engineers.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.