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NEC: Managing and Assessing NEC Compensation Events

Commercial & Contract Law

Courses Overview:

This 1 day course will provide a detailed insight into the mechanisms for managing and assessing compensation events and claims, including ways in which the ethos of the contract can be used to assist project managers, contractors and subcontractors.

The course will also provide a detailed analysis of the contractual basis to compensation events and claims, under the 3rd Edition of the ECC Contract as well as the Subcontract, Professional Services Contract and the other forms.


• Background and principles
• What is a compensation event?
• What other contractual entitlements apply?
• Common law claims

The Compensation Events
• The core clauses
• The main options
• The secondary options
• Additional compensation events
• Omissions from the list

Notification of Compensation Events
• Contractual requirements and limitations
• Notifications: by the project manager; by the contractor, effect of failure to notify or reply
• Conditions precedent
• Deemed acceptance and project manager failure

Quotations for Compensation Events
• Status of quotations, if instructed; if not instructed
• Procedure and timetable; instructions for alternative quotations; contractor’s alternatives
• Revised quotations
• Project Manager’s assumptions
• Extending time for quotations
• Cost of preparing quotations
• Deemed acceptance and project manager failure

Assessment of Compensation Events
• Cost of work; use of schedule of cost components; use of shorter schedule of cost components; use of bills of quantities; the contractor’s fee
• Cost of subcontracted work
• Reduction in prices
• Differences between main options
• Time; delay to completion; content of and reference to the accepted programme; time and risk allowances
• Failure to give early warning
• Assessing the effects of ambiguities or inconsistencies
• Project manager’s assessments

Implementation of Compensation Events
• Procedure and timing
• Effect of implementation

Practical Examples and Problems
• This course includes practical examples of the management and assessment of compensation events and discussion on problems frequently encountered in notices, quotations and assessments

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