Early Warning Notices v Compensation Event Notices under NEC Contracts
Richard Hildrick
NEC Contracts: Early Warning Notices v Compensation Event Notices
NEC Subcontracts : Early Warning Notices (“EWN”s) v Compensation Event Notices (“CEN”’s)
ALWAYS ALWAYS be focused on issuing timely and well drafted CEN’s, and never believe that EWN’s are enough to protect your commercial interests.
Subcontractors often come to us when they are already well into a project which has hit delays and/or they have been asked to carry out the works under very different conditions and constraints.
From the outset the Contractor has stressed the importance of the Subcontractor issuing EWN’s, to ensure that cost/time issues are flagged early and addressed, if possible.
So the Subcontractor has ‘toed the line’ and has issued some EWN’s. He tells me that he is well covered as a result, but yet he fears that the Contractor isn’t going to pay him anything extra for all of the delays and extra costs he has suffered.
So I ask him: Can I see your CEN’s? More often than not the reply is: What are those, we were told to issue EWN’s?
The Subcontractor has been led up the garden path by the Contractor, to wrongly believe that EWN’s are the holy grail. Yes EWN’s are an important mitigation tool, but they do very little to help a Subcontractor to get paid for delays and extra constraints, or even to protect himself from contra-charge claims for delay. ONLY COMPENSATION EVENT NOTICES CAN DO ALL OF THAT.
If, as a Subcontractor, you fail to raise CEN’s, you become time barred (after 7 weeks under the standard NEC terms) and cannot recover the cost of delays/disruption and the like. Neither can you secure any extensions of time to protect you from delay / damages claims from the Contractor.
Richard Hildrick - Founder
BSc(Hons) MSc MRICS MCIOB FCIArb
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