NEC4 clause 60.1 lists 21 compensation events — the defined circumstances under which a contractor (or subcontractor) is entitled to claim more time and/or money. Understanding each one is critical to protecting your commercial position.
Compensation events (CEs) are the mechanism by which NEC4 manages change and risk during a construction project. Unlike traditional variation orders under JCT contracts, NEC CEs are not just about scope changes — they cover any defined event that causes the Contractor to incur more cost or take more time than was anticipated at the Contract Date. Clause 60.1 lists 21 such events, ranging from PM instructions to change the Scope (60.1(1)) through to unforeseen ground conditions (60.1(12)) and weather exceeding historical thresholds (60.1(13)).
For subcontractors, the CE mechanism is both a protection and a discipline. It protects you by providing a contractual route to recover additional time and cost whenever a defined event occurs. The discipline is the notification regime: under NEC4 you must notify the PM of a CE within 8 weeks of becoming aware of it. 'Becoming aware' is not the same as the event occurring — you are expected to identify and notify events promptly. Fail to notify in time and you lose your entitlement, regardless of the merits of your claim. This time-bar is the most commercially significant procedural requirement in NEC contracting.
Contemporaneous records are the foundation of every CE claim. The NEC CE process requires you to price the impact on Defined Cost and the Accepted Programme. Without site diaries, labour allocation sheets, plant records, and programme updates, you cannot substantiate either element. Many subcontractors win the right to a CE in principle but then fail to recover fair compensation because they cannot demonstrate actual cost. Treat every potential CE as a claim from the moment you become aware of it — don't wait until the event is over to start assembling your records.
| Clause | Title | Trigger | Frequency |
|---|---|---|---|
| 60.1(1) | Change to Scope | PM instruction altering the defined Scope | Common |
| 60.1(2) | Access not given | Client fails to give site access by programmed date | Common |
| 60.1(3) | Client does not provide something | Client fails to provide items by programmed date | Moderate |
| 60.1(4) | Stop/don't start instruction | PM instructs suspension of all or part of the works | Moderate |
| 60.1(5) | Others breach Scope conditions | Client or Others fail to work within stated conditions | Moderate |
| 60.1(6) | PM/Supervisor late reply | PM or Supervisor fails to respond within contractual period | Common |
| 60.1(7) | Changed PM decision | PM reverses a decision previously communicated | Moderate |
| 60.1(8) | Withdrawal of acceptance | PM withdraws acceptance of a Contractor submission | Rare |
| 60.1(9) | Post-Completion Defect correction | Client notifies pre-Completion Defect after Defects Date | Rare |
| 60.1(10) | Search for Defect not caused by Contractor | PM instructs search; no Contractor-caused Defect found | Moderate |
| 60.1(11) | Test or inspection causes unnecessary delay | Test or inspection exceeds programmed allowance | Moderate |
| 60.1(12) | Unforeseen physical conditions | Ground or site conditions beyond experienced contractor's allowance | Common |
| 60.1(13) | Exceptional weather | Weather measurements exceed contractual thresholds | Moderate |
| 60.1(14) | Client risk event in Risk Register | Event listed as Client risk in Risk Register materialises | Moderate |
| 60.1(15) | Early take-over | PM certifies take-over of part of works before Completion date | Rare |
| 60.1(16) | Client does not provide free-issue items | Client fails to provide materials/facilities stated in Scope | Moderate |
| 60.1(17) | Correction of CE assumption | PM notifies that an assumption used in CE quotation was wrong | Moderate |
| 60.1(18) | Client breach of contract | Client breaches a contractual obligation not covered by other CEs | Rare |
| 60.1(19) | Force majeure event | Event beyond Contractor's control stops completion by planned date | Rare |
| 60.1(20) | Additional CEs in Contract Data | Bespoke CE events added by parties in Contract Data Part 1 | Moderate |
| 60.1(21) | Instruction to prepare revised programme | PM instructs a programme revision beyond routine contractual updates | Rare |
Under NEC4, the Contractor must notify a compensation event within 8 weeks of becoming aware of it. If notification is late, the PM can reject it and the Contractor loses entitlement to additional time and money — regardless of the merits.
Yes. NEC subcontracts contain equivalent compensation event clauses. The Contractor takes on the Client role, and the subcontractor must notify CEs to the Contractor within the required time limits.
You need contemporaneous records including site diaries, labour allocation sheets, plant records, photographic evidence, and programme updates. The NEC CE assessment is based on Defined Cost and the effect on the Accepted Programme.
This is the most commonly used compensation event. It arises when the Project Manager (PM) gives an instruction that changes the Scope — the document that defines what you must do. The Scope includes ...
This CE arises when the Client fails to give you access to the Site (or a part of it) by the date shown on the Accepted Programme. Access dates are not just the start date — they apply to each area or...
Similar to 60.1(2), this CE covers situations where the Client is supposed to provide something — materials, equipment, information, or a free-issue item — by a date in the Accepted Programme, but fai...
This CE is triggered when the PM instructs the contractor to stop work that is already underway, or not to start an activity that was planned. This is sometimes called a 'suspension' or 'stop notice'....
This CE covers situations where the Client, or parties described as 'Others' in the contract (e.g. other contractors appointed directly by the Client), fail to work within the conditions set out in th...
Under NEC, the contract sets specific time periods for the PM and Supervisor to respond to communications — typically two weeks unless a different period is stated in Contract Data. If the PM or Super...
This CE arises when the PM changes a decision they have already communicated to you. If you have acted in reliance on the PM's earlier decision and they then change it, you are entitled to a CE for th...
This CE applies where the PM has previously accepted a Contractor communication — such as a design submission, a programme, or a method statement — and subsequently notifies the Contractor that they a...
This CE arises in a specific post-Completion scenario. Under NEC, at the Defects Date (the end of the defect correction period), if the Client has not notified a Defect that existed at Completion, the...
Under NEC, the PM can instruct the Contractor to search for a Defect — opening up completed works, testing, or investigating. If the search reveals a Defect that was not caused by the Contractor (e.g....
Under NEC, tests and inspections are required by the contract (set out in the Scope). If a test or inspection is carried out by the Supervisor (Client's representative for quality) and the delay to th...
This CE arises when the Contractor encounters physical conditions within the Site — things encountered in or on the ground — that an experienced contractor would have judged, at the Contract Date, to ...
This CE applies where weather conditions at the Site are recorded as more severe than the weather measurements stated in the Contract Data (or, if not stated, as would have occurred less than once in ...
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 share...
This CE arises when the PM certifies that the Client has taken over a part of the works before the Completion date. Under NEC4, if the Client starts using a section of the works before Completion (and...
This CE covers the situation where the Scope states that the Client will provide certain materials, facilities, samples, or equipment for the Contractor's use, and the Client fails to provide them. Th...
When the PM assesses a compensation event that involves an uncertain future event, they can state assumptions about that event and instruct you to quote on that basis. If those assumptions later prove...
This CE is a broad catch-all that covers any breach of contract by the Client that is not already covered by one of the other compensation events. Under NEC4, if the Client breaches an obligation and ...
This CE applies where an event occurs that stops the Contractor completing the works by the planned Completion date — and that event is not one of the other listed CEs and is not the Contractor's faul...
NEC contracts allow the parties to add additional compensation events to the standard list through the Contract Data. These are bespoke CEs agreed at tender stage that are specific to the project or t...
This CE applies where the PM instructs the Contractor to prepare a revised programme — meaning a new programme beyond those that are required under the contract in the normal course of events. NEC con...
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