How do I notify a compensation event under NEC4?
In writing, through the communication system your subcontract names, as a separate notification that names the event, within 8 weeks of becoming aware.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
For the clause and its time bar in detail, see how NEC4 clause 61.3 works.
The answer
That is the period in the unamended NEC4 main contract, and your subcontract may set a different one. On an NEC subcontract you notify your main contractor. A good notification does five things. Its heading says it is a notification of a compensation event. It names the event and the paragraph of clause 60.1 you rely on. It gives the date you became aware and how you know. It says briefly what the event affects: the work, the cost or the dates. And it goes as its own communication, not as a line in a progress report or meeting minutes. You do not need the cost yet. The quotation comes later, when you are asked for it. Waiting for the figures is the commonest way to miss the 8 weeks. Events that come from your main contractor's own instruction or changed decision are for it to notify. If it does not, notify them yourself anyway. Keep proof of sending, and a copy of the site record that fixes the awareness date. Our Compensation Event Loss Prevention service sets up the log, the template and the diary that get every event notified in time.
Example
Illustrative example. The scenario and figures are invented.
The facts
A mechanical subcontractor on an NEC4 subcontract is due access to the plant room on 14 October, the date on the Accepted Programme. The room is still full of another trade's scaffold.
What happens
- The supervisor records the refused access in the site diary that day, with photographs.
- On 16 October the subcontractor sends a notification headed as a notification of a compensation event, through the project's document system.
- It names clause 60.1(2), access not given by the date on the Accepted Programme, and gives 14 October as the awareness date.
- It says the plant room work cannot start, and that a quotation will follow when asked for.
- Access comes 10 days later, and the quotation prices the effect then.
The outcome
The event was notified 2 days after awareness, not 7 weeks later when the cost was known, so the time bar never came into play.
To have every event logged and notified inside its period, see our Compensation Event Loss Prevention service.