On 1 March 2019 NEC issued a set of amendments to its NEC4 suite of contracts. There are quite a few. The majority deals with typos and the like. There are, however, a couple of substantive changes. This blog deals with one change: the amendment to clause 63.5.
The original clause didn’t quite work and shortly after NEC launched its new suite, it issued an explanatory note (Practice Note 1) to explain how the clause was intended to work. It would appear that the note didn’t go far enough.
So what was wrong with clause 63.5 and what’s changed?
In the ‘old’ NEC4, a compensation event was assessed by reference to the Accepted Programme current at the dividing date. Practitioners pointed out that if the Accepted Programme had not been updated, the Project Manager had to use an ‘out of date’ programme. This could produce slightly odd results.
In the ‘new’ NEC4 (January 2019), clause 63.5 has been amended as follows:
“The assessment [of any delay caused by a compensation event] takes into account:
- any delay caused by the compensation event already in the Accepted Programme; and
- events which have happened between the date of the Accepted Programme and the dividing date.”
This means that the Project Manager is no longer stuck with an ‘out of date’ programme.
This is a sensible tweak to the NEC4 and reflects what practitioners were often doing in practice. For those of you who use the NEC, here’s a link to the page on the NEC website which covers the changes: https://www.neccontract.com/About-NEC/News-Media/NEC4-Amendments.