The compensation event clock: what happens when nobody replies

12 November 2026

Dr Stuart Kings

NEC4 Drafter & Co-author

PhD, MRICS, MCIPS, BSc (Hons)

5 minutes read

NEC4’s compensation event timescales are strict for a reason. Both parties have remedies when the other side goes quiet, and both need to know them.

Why the deadlines exist

Compensation events are where NEC4 does its hardest work. Unlike many other forms, it assesses the effect of a change on time and money together, under a single event. That is more logical than agreeing the cost and arguing about an extension of time months later, but it means important decisions have to be made quickly.

Dr Stuart Kings, one of the nine drafters of NEC4, explained the thinking at Sypro’s October webinar with a deliberately everyday analogy: “if there were no parking tickets for parking badly, or no speeding tickets, then everybody would speed, it’s human nature.” His conclusion: “If we had no deadlines, nothing would get done.”

The contractor’s clock

For events it notifies, the contractor must notify within eight weeks of becoming aware that the event has happened. Under clause 61.3, missing that window means the contractor is not entitled to a change in the Prices, the Completion Date or a Key Date, unless the event is one the Project Manager should have notified. This is the timebar that ends the habit of throwing in a retrospective claim.

Once the Project Manager has instructed quotations, or accepted that an event is a compensation event, the contractor has three weeks under clause 62.3 to submit a quotation covering both time and money. Where the supply chain is involved, three weeks can be tight, and the period can be extended by agreement before the quotation is due.

The Project Manager’s clock

The Project Manager has a defined period to decide whether a notified event is a compensation event, and then two weeks to reply to a quotation. That reply can accept the quotation, instruct a revised one with reasons, or notify that the Project Manager will make its own assessment.

Two weeks is often not enough on a high value or programme critical event. NEC4 assumes the Project Manager has full delegated authority, but in practice many must take decisions through internal approval routes. The answer is to agree an extension in time, not to let the deadline pass.

When the Project Manager goes quiet

If the Project Manager fails to reply in time, the contractor can notify that failure. If the Project Manager still has not replied two weeks after that notification, the outcome is treated as accepted. For a notified event, it is treated as a compensation event. For a quotation, under clause 62.6, the quotation itself is treated as accepted.

This is the remedy most likely to cause commercial anxiety on the client side, because a quotation accepted by default may be higher than the Project Manager would have assessed. Stuart’s advice to Project Managers was practical: log in every day and ask, “have I followed the procedures in a contract?”

When the contractor goes quiet

The contract protects the client in the same way. If the contractor does not submit a quotation in time, and has not agreed an extension, the Project Manager must step in and make its own assessment. That assessment must be made impartially, but the contractor loses the chance to shape the figures.

There is also a sting for missed early warnings. Under clause 61.5, if the contractor failed to give an early warning that an experienced contractor could have given, the event is assessed as if it had been given. CECA’s guidance illustrates the effect: where half of the delay could have been mitigated by an early warning, a quotation of £60,000 could be assessed at £30,000.

Nothing left at large

The purpose of these remedies is that nothing is left at large. As Stuart put it, “so long as one of the two parties is following the procedures, then the compensation events will be implemented.” The contrast with older forms, where variations accumulate unresolved into a final account negotiation, is deliberate.

The practical lesson is that the clock works for whoever is watching it. A party that tracks every deadline can rely on the remedies. A party that does not may find a quotation accepted, or an assessment made, without its input.

Making the clock work for you

Meet between deadlines. Agree at the launch event to review compensation events every fortnight, or weekly when volumes are high. Informal agreement before formal submission speeds up formal acceptance.

Use assumptions. Where an event is hard to quantify, the Project Manager can state assumptions for the quotation under clause 61.6. If they prove wrong, the correction is itself a compensation event. This often unlocks better value and faster decisions.

Agree extensions in writing and in time. Supply chain input and internal approvals are legitimate reasons for more time. Agree them before the deadline passes.

Track everything in one place. A dashboard showing what is overdue, what is due this week and what is comfortably in time is the simplest protection against a remedy being used against you.