What happens if a compensation event is not notified within eight weeks?

Under the unamended NEC4 ECC, if the Contractor does not notify within eight weeks of becoming aware of the event, it generally loses the right to a change to the Prices, the Completion Date or a Key Date, unless the event is one the Project Manager should have notified. Many contracts amend this, so check yours, and treat the eight weeks as a maximum rather than a target.

How is a compensation event assessed under NEC4?

As its effect on the Defined Cost of the work, plus the resulting Fee, together with any delay to planned Completion shown on the Accepted Programme. Work already done is assessed using records of actual Defined Cost; work still to come is assessed on forecasts. The exact components of Defined Cost depend on the main option and any amendments.

What if the Project Manager makes their own assessment?

The Project Manager can assess a compensation event themselves in defined circumstances, for example where the Contractor has not submitted a quotation in time or the quotation is not assessed correctly. In practice the Project Manager will use whatever records they have, and if the Contractor’s records are thin, that assessment is likely to be cautious. Your records are what make it possible to challenge it.

Does a missed early warning reduce a compensation event?

It can. Under the ECC, if the Project Manager has notified that the Contractor did not give an early warning it should have given, the event is assessed as if a warning had been given, which may reduce what is recoverable. Raising early warnings promptly, and recording that you did, protects the later assessment.

Records for NEC compensation events

NEC compensation events are assessed on cost and time, and the assessment is only as good as the records behind it. Here is what site teams should keep, from the first early warning to the quotation.

Written from construction commercial and claims experience. Last reviewed 7 October 2026.

Why NEC rewards good records and punishes thin ones

The NEC4 Engineering and Construction Contract is built around managing change as it happens rather than arguing about it at the end. That is good news for contractors who keep proper records, and hard news for those who don’t. Compensation events are priced on their effect on Defined Cost and the time for Completion, so every quotation is a cost and programme argument that has to be supported by facts. Where the records are missing, the Project Manager may make the assessment instead, using whatever information they have.

What follows describes the unamended ECC in general terms. The detail varies depending on the main option and any amendments (and Z clauses are common), so read this alongside your own contract.

Early warnings: the first record

The early warning is where an NEC record starts. Either party is expected to warn the other as soon as it becomes aware of something that could increase the Prices, delay Completion or a Key Date, or impair the performance of the works. The early warning register then tracks how each matter is being managed.

The site record matters here for two reasons. First, it fixes the date you became aware of a problem, which later starts the clock on notification. Second, under the ECC a Contractor who should have given an early warning and didn’t may find the event assessed as if it had, which can reduce what is recovered. A diary entry noting the issue, the early warning raised and who it went to is cheap insurance.

Notification: the eight-week clock

Under clause 61.3 of the unamended NEC4 ECC, the Contractor notifies a compensation event within eight weeks of becoming aware that it has happened. Miss that window and, broadly, the Contractor loses the entitlement to more money or time for it, unless it is an event the Project Manager should have notified. Some contracts shorten the period or add further conditions; few make it more generous.

The practical rule for site teams: notify early and factually, and never let an event sit in a diary while the clock runs. Contemporaneous records also help settle the question that often decides a late notification argument, which is when you actually became aware of the event.

What a compensation event record needs

The event itself: what happened or was instructed, where, and when you became aware of it
The early warning reference, if one was given, and the date it was raised
The date the compensation event was notified, and to whom
People affected: names or gangs, hours worked and hours stood, day by day
Equipment affected: fleet numbers, working and standing hours, hired or owned
Plant and Materials used on the changed work, with delivery tickets
Subcontractor resources and invoices that relate to the event
Which programme activities were affected, and how the sequence changed
Photos and documents that show the condition, the change or the obstruction

The thread running through that list is people and Equipment. Defined Cost is built from the resources actually used, so a quotation is far stronger when each line can be traced back to a named operative or fleet number on a given day. “Additional excavation in Zone 4” is a description; “gang of 3 and 21t excavator, 07:30–16:00, breaking out unforeseen concrete obstruction in Zone 4” is a cost record.

Quotations: forecast and actual

A quotation sets out the proposed changes to the Prices and any delay to Completion or Key Dates, assessed as the effect on Defined Cost plus the resulting Fee. Where some of the work is already done, that part is assessed from records of what it actually cost; the remainder is a forecast. Delay is shown on the programme, against the Accepted Programme.

Both halves lean on site records. Actual Defined Cost needs the labour, Equipment and materials records for the days the work was done. Forecasts are more credible when they rest on achieved outputs from similar work on the same job, rather than on tender allowances. And the delay to Completion is much easier to show when the diary records which activities were affected and what was resequenced.

Putting it into practice on site

The daily habit is the same one that supports any delay or change claim: record the event on the day, name the affected labour and plant, attach the photos, and tie it to an instruction or early warning reference where one exists. In Site Chronicle, delay records carry the affected labour and plant, instructions sit in a register with their references, and the client’s representative can acknowledge the daily record from a link. That acknowledgement confirms receipt but does not by itself constitute contractual acceptance; it is a contemporaneous record, not a substitute for the notices and quotations the contract requires.

Frequently asked questions

What happens if a compensation event is not notified within eight weeks?: Under the unamended NEC4 ECC, if the Contractor does not notify within eight weeks of becoming aware of the event, it generally loses the right to a change to the Prices, the Completion Date or a Key Date, unless the event is one the Project Manager should have notified. Many contracts amend this, so check yours, and treat the eight weeks as a maximum rather than a target.
How is a compensation event assessed under NEC4?: As its effect on the Defined Cost of the work, plus the resulting Fee, together with any delay to planned Completion shown on the Accepted Programme. Work already done is assessed using records of actual Defined Cost; work still to come is assessed on forecasts. The exact components of Defined Cost depend on the main option and any amendments.
What if the Project Manager makes their own assessment?: The Project Manager can assess a compensation event themselves in defined circumstances, for example where the Contractor has not submitted a quotation in time or the quotation is not assessed correctly. In practice the Project Manager will use whatever records they have, and if the Contractor’s records are thin, that assessment is likely to be cautious. Your records are what make it possible to challenge it.
Does a missed early warning reduce a compensation event?: It can. Under the ECC, if the Project Manager has notified that the Contractor did not give an early warning it should have given, the event is assessed as if a warning had been given, which may reduce what is recoverable. Raising early warnings promptly, and recording that you did, protects the later assessment.

This guide is general information for construction site teams, not legal advice. Contract terms differ. Check yours, and take professional advice on live disputes.