Plain English Explanation
Under NEC4, the contract includes a Risk Register — a live document maintained by the PM that records identified risks and who owns them. Risks can be allocated to the Client, the Contractor, or shared. If an event occurs that is listed in the Risk Register as a Client risk, this is a CE.
This CE reinforces the collaborative risk management approach of NEC. By identifying and explicitly allocating risks at the outset (and reviewing them through the project), both parties know in advance which risks trigger CEs. Early Warning meetings and the Risk Register are core NEC project management tools.
In practice, what is in the Risk Register is negotiated. Subcontractors should review it carefully at tender stage and push back on any risks that are inappropriately allocated to them.
Key Takeaway
Review the Risk Register at tender — if a risk that could affect your works is missing or wrongly allocated, negotiate to correct it before contract signature, not during the project.
What This Means for Subcontractors
Whether this CE flows down to subcontractors depends on whether the subcontract includes a Risk Register and how risks are allocated within it. Push for risks that are genuinely outside your control (third-party utilities, public body consents, statutory undertaker delays) to be listed as Client/Contractor risks in the Risk Register. This preserves your CE entitlement if they materialise.
Common Risks & Disputes
- 1The Risk Register not being maintained or updated, so it no longer reflects the live risk profile of the project
- 2Risks being allocated to the Contractor in the Risk Register that are not truly within their control
- 3The PM removing a Client risk from the Risk Register post-contract without a CE instruction
- 4Confusion between a listed risk and an actual event — the risk must materialise into a specific event to trigger the CE
- 5Subcontractors not receiving or reviewing the Risk Register as part of the subcontract documentation
Sources
Related Clauses
Physical conditions within the Site not weather
Ground risk is often addressed in the Risk Register as well as 60.1(12)
A breach of contract by the Client
Client breach — a risk Register event caused by Client action may also be a breach
Additional compensation events stated in Contract Data
Additional CEs — may supplement the Risk Register allocation
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