How to Notify a Compensation Event Under NEC4 (and Survive the 8 Week Time Bar)

More NEC4 entitlement is lost to clause 61.3 than to any argument about the merits. The rule is brutal and simple: if a compensation event has happened and the Project Manager has not notified it, the contractor must notify it within eight weeks of becoming aware that the event has happened. Miss the window and, unless the event arises from a Project Manager or Supervisor instruction, notification, certificate or changed decision, the entitlement to a change in the Prices, the Completion Date or a Key Date is gone.

We have sat across the table from subcontractors with strong five and six figure claims that were dead before we ever saw them. Not because the events were not compensation events. Because nobody sent a one page notice in time. This guide covers how to notify properly, what the notice needs to say and the mistakes that keep paying for our dispute work.

When the clock starts

The eight weeks runs from awareness that the event has happened, not from when its cost becomes clear. That distinction catches people constantly. Ground conditions are encountered in March, the cost impact crystallises in June, and the site team assumes the clock started in June. It did not. If you knew about the event in March, the window closed in May.

The practical answer is to notify early and notify on less than perfect information. A notification does not need a quantified claim attached. It needs the event. Value comes later, through the quotation process under clause 62.

What the notification must contain

NEC4 does not prescribe a form, but a notification that does its job states the event and does so as a notification. In practice a good notice covers five things: what happened, when it happened, when you became aware of it, why you say it is a compensation event including the clause 60.1 ground relied on, and an initial view of the effect on the Prices and the Completion Date, even if that view is simply that the effect is being assessed.

Two formal points matter more than most people realise. Clause 13.1 requires communications in a form which can be read, copied and recorded, and clause 13.7 requires a notification to be communicated separately from other communications. A compensation event raised in the middle of a progress meeting email is asking for an argument about whether it was ever notified at all. Send it as its own document, clearly titled, to the right person at the right address.

The mistakes we see every month

Waiting for certainty is the biggest. Teams sit on events for weeks trying to work out what they are worth, then discover the bar has passed. Notify first, value second.

Relying on early warnings is the second. An early warning under clause 15 is a different notice doing a different job, and giving one does not notify a compensation event. Plenty of contractors have raised a matter conscientiously at an early warning meeting and still lost the entitlement because no clause 61.3 notification followed.

The third is assuming the Project Manager's knowledge helps you. It does not matter that everyone on the project knew about the event. Unless the Project Manager notified it, or it arose from an instruction or other listed act, the obligation to notify within eight weeks sits with the contractor.

The fourth is subcontract back to back traps. NEC4 ECS subcontracts often shorten the notification period so the contractor has time to pass the event up the chain. If your subcontract says three weeks, eight weeks of comfort is an illusion. Read Contract Data Part One, not the unamended book.

After the notification

Under clause 61.4 the Project Manager replies within one week, or a longer agreed period, stating whether the event is a compensation event and whether a quotation is instructed. If there is no reply, notify the failure: a further two weeks of silence becomes deemed acceptance and a deemed instruction to quote. Then the clause 62 machinery takes over, with three weeks to submit the quotation and two weeks for the reply. Every one of those periods belongs in a register with a named owner, which is exactly what our free CE and early warning registers track automatically.

Run the process properly and most compensation events settle as routine administration. Run it late and you are choosing between writing off the money and paying for a dispute about waiver and interpretation that you might not win. Prevention is cheaper. It usually is.

Common questions

Does the 8 week time bar always apply under NEC4?

No. Under clause 61.3 the time bar does not apply where the event arises from the Project Manager or Supervisor giving an instruction or notification, issuing a certificate, changing an earlier decision or correcting an assumption. For everything else, the eight weeks runs from when the contractor became aware that the event has happened, and a late notification loses the entitlement unless the contract has been amended.

Can I notify a compensation event by email?

Only if your contract allows it. Clause 13.1 requires communications in a form which can be read, copied and recorded, and many contracts specify a communication system or address. A notification buried in an email chain about something else also risks falling foul of clause 13.7, which requires notifications to be communicated separately. Check Contract Data Part One before relying on email.

What if the Project Manager does not reply to my notification?

Clause 61.4 requires a reply within one week or a longer agreed period. If there is no reply, the contractor may notify the Project Manager of that failure, and if a further two weeks pass without a response the notification is treated as acceptance that the event is a compensation event and an instruction to submit quotations. Diarise these dates and use them.