Skip to content

How does NEC4 clause 61.3 work?

In most cases you have 8 weeks from becoming aware of a compensation event to notify it, or you lose the change to your price and dates.

Updated: . By Jack Butler-Kettle, Construction Claims Consultant.

If the eight weeks may already have passed, see what happens if you miss the 8 week deadline for a compensation event.

For what a notification should say and how to send it, see how to notify a compensation event under NEC4.

The answer

Clause 61.3 is your notification and the time bar attached to it. In the NEC4 main contract the Contractor notifies the Project Manager. On an NEC subcontract you notify your main contractor. Notify any event you believe has happened, or expect to happen, that is a compensation event and has not already been notified to you. You must notify within 8 weeks of becoming aware the event has happened. If you do not, you are not entitled to a change in the Prices, the Completion Date or a Key Date. The exception is an event the other side should have notified to you and did not. That exception matters. Events that come from the other side's own instruction or changed decision are ones it should notify. So the 8 weeks bites hardest on events you discover yourself: physical conditions, weather, late access, something you were to be given, or a breach. The clock runs from awareness of the event, not from when its cost becomes clear. Waiting for the figures is the commonest way the claim is lost. The notification is separate from an early warning and from the quotation, and one does not do the work of another. Three things go wrong. The notice is buried in a progress report or meeting minute instead of sent as a notification. The awareness date is disputed because nobody recorded when the site team first saw the problem. Or the event is notified as a general complaint, without saying which compensation event it is. Keep a dated record of first awareness beside each notification. Check your signed subcontract too, because amended forms change both the period and the exception.

Example

Illustrative example. The scenario and figures are invented.

The facts

A subcontractor's digging gang breaks into an unrecorded brick culvert on a drain run, and the site diary records it that morning. The subcontractor believes the conditions fall within compensation event 60.1(12).

What happens

  1. The 8 weeks run from the day the diary records the find, not from the day the QS prices the extra digging 4 weeks later.
  2. A notification sent in week seven keeps the change to the Prices.
  3. The same content sent in week ten, or mentioned only in the monthly progress report, does not, unless the main contractor should have notified the event.

The outcome

If the extra work costs £30,000 and the notification was late, the £30,000 stays with the subcontractor, however strong its case on the ground conditions.

Our Compensation Event Loss Prevention puts the notification clock for every event on the diary, and keeps a log of each event from the day you spot it.