{
  "query": "UK construction liquidated damages rates NEC4 industry benchmark 2024",
  "raw_results": [
    {
      "url": "https://www.fenwickelliott.com/sites/default/files/l_liquidated_damages.pdf",
      "title": "[PDF] Liquidated Damages - Fenwick Elliott",
      "content": "Conclusion Liquidated damages are commonly used in the construction industry and standard form contracts typically provide for them. However, when considering whether to include liquidated damages, care should be taken to ensure that the provisions are clear (i.e. what the liquidated damages relate to) and workable, and parties must then follow the contractual mechanism. Huw Wilkins June 2024 Footnotes 1 They are provided for in standard form contracts, such as Optional Clause X7 in NEC4. 2 Dunlop Pneumatic Tyre Co Ltd -v- Selfridge & Co Ltd  A.C. 847.\n3 Cavendish Square Holding BV -v- Talal El Makdessi  UKSC 67.\n4  EWHC 283 (Comm).\n5  EWHC 6 (TCC).\n6 Temloc Ltd -v- Errill Properties Ltd  39 B.L.R. 30.\n7 Baese Pty Ltd -v- RA Bracken Building Pty Ltd (1990) 6 BCL 137.\n8  WASC 246. [...] 8  WASC 246.\n9 Cavendish Square Holding BV -v- Talal El Makdessi  UKSC 67.\n10 Robophone Facilities -v- Blank  1 WLR 1428 CA at 1447; Dunlop Pneumatic Tyre Co Ltd -v- Selfridge & Co Ltd  A.C. 847; Cavendish Square Holding BV -v- Talal El Makdessi  UKSC 67; Dunlop Pneumatic Tyre Co Ltd -v- New Garage & Motor Co Ltd  A.C. 79; Eco World – Ballymore Embassy Gardens Company Limited -v- Dobler UK Limited  EWHC 2207 (TCC).\n11 Taylor Woodrow Holdings Ltd & Anor -v- Barens & Elliott Limited  EWHC 3319 (TCC); Buckingham Group Contracting Ltd -v- Peel L&P Investments and Property Ltd  EWHC 1842 (TCC).\n12 Rapid Housing -v- Ealing Family Housing  29 BLR 5. [...] Historically, the rate of liquidated damages was required to be a genuine pre-estimate of loss.2 More recently, the Supreme Court reviewed the law in this regard and recast the test.3 In doing so, it recognised that a party may have a legitimate interest in enforcing a liquidated damages provision extending beyond the pecuniary compensation for the breach. The Tribunal can therefore look at more than just a comparison of the rate of liquidated damages and the loss actually incurred (for example, in certain circumstances the Tribunal could look at the impact of a delay to a project on the employer’s reputation). In the construction industry, liquidated damages are commonly used to compensate employers for a contractor’s failure to complete the works by the contractual completion date, or a",
      "score": 0.66203266,
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    {
      "url": "https://medium.com/@nihanthreddy65/why-nec-contracts-are-revolutionizing-uk-construction-and-what-you-need-to-know-38de679222c8",
      "title": "Why NEC Contracts Are Revolutionizing UK Construction (And What ...",
      "content": "Hong Kong has adopted NEC as a standard for public infrastructure. Singapore’s Building and Construction Authority announced NEC4 uptake in 2024, with specialized Y clauses published to align with local laws. Peru signed an agreement in August 2024 to officially translate and implement NEC for public infrastructure, with US$9 billion in projects already delivered using the suite.\n\nMajor international projects from tunnel boring machine procurement in France to nuclear waste containers in Germany to the world’s largest radio telescope observatory spanning Australia and South Africa have all used NEC contracts. [...] Improved Dispute Resolution:\n\nNEC4 introduced a dispute avoidance option (W3) featuring a Dispute Avoidance Board for proactive resolution before issues escalate. It also added a senior representatives negotiation step before formal adjudication — giving parties one more chance to resolve matters internally.\n\nSimplified Fee Structure:\n\nNEC3 used separate direct and subcontracted fee percentages. NEC4 simplified this to a single fee percentage, reducing administrative complexity.\n\n## Get nihanth reddy’s stories in your inbox\n\nJoin Medium for free to get updates from this writer.\n\nSubscribe\n\nSubscribe\n\n- [x] \n\nRemember me for faster sign in\n\n \n\nValue Engineering: [...] Remember me for faster sign in\n\n \n\nValue Engineering:\n\nNEC4 introduced a value engineering percentage allowing savings from contractor-led proposals to be shared in priced contracts. This encourages innovation even in fixed-price scenarios.\n\nTechnology Integration:\n\nNEC4 explicitly accommodates modern construction technology, including Building Information Modeling (BIM). The contract recognizes that digital collaboration tools and data-rich 3D models are now central to project delivery.\n\nPayment Application Requirements:\n\nNEC3 allowed contractors to optionally submit payment applications. NEC4 makes this mandatory, with project managers gaining powers to assess if no application arrives. This ensures payment processes keep moving.\n\nPress enter or click to view image in full size",
      "score": 0.55709904,
      "raw_content": null
    },
    {
      "url": "https://www.necplanningsolutions.co.uk/post/the-future-of-nec-contracts-in-the-uk-a-2035-projection",
      "title": "Future of NEC Contracts in the UK",
      "content": "NEC is not a theoretical future contract in the UK market. It is already established on major programmes. HS2 has described using the NEC3 suite for most of its project requirements, citing industry support and the contract's collaborative approach. Sellafield's Programme and Project Partners framework has operated under NEC4 ECC and PSC contracts. Network Rail confirmed in 2024 that it had adopted the NEC4 Alliance Contract for the proposed £1.4 billion Midlands Rail Hub programme.\n\nThe question is therefore not whether NEC suddenly arrives. It is how the commercial environment around it continues to change, and what capabilities become more important as it does. [...] The Construction Playbook continues to favour earlier supply chain involvement, integrated timescales and collaborative approaches where they suit the project. NEC has a specific tool in the NEC4 Alliance Contract, designed for multi-party programmes where shared risk and reward models are appropriate. [...] Conclusion\n\nThe evidence does not support a precise claim about NEC's share of the UK construction market in 2035. It does support a clearer and more commercially useful conclusion: the UK delivery environment continues to move toward earlier engagement, stronger contract management, better digital working and more structured performance measurement. NEC is already established on major programmes and has continued to evolve through its digital platform, Option X29 on climate change and contract mechanisms such as KPI and climate provisions that can support more structured performance management where clients require it.",
      "score": 0.39747116,
      "raw_content": null
    },
    {
      "url": "https://www.pinsentmasons.com/out-law/news/jct-db-contract-2024-clarifies-treatment-liquidated-damages-termination",
      "title": "JCT D&B contract 2024 clarifies treatment of liquidated damages at termination",
      "content": "+974 4426 9200\n\n#### Explore all Saudi Arabia\n\n### Riyadh\n\nParcel 4.01, 7182 KAFD Ring Road, 2848 Al Aqeeq District, Riyadh 13519\n\n+966 11 260 4900\n\n#### Explore all United Arab Emirates\n\n### Abu Dhabi\n\nUnit 8, Level 7, Al Maryah Tower, ADGM Square, Al Maryah Island, Abu Dhabi\n\n+971 4 373 9700 ### Dubai\n\nThe Offices 1, (adjacent to the Dubai World Trade Centre), One Central, PO Box 115580, Dubai\n\n+971 4 373 9700\n\n#### Explore all United Kingdom\n\n#### Explore all England\n\n### Birmingham\n\n55 Colmore Row, Birmingham, B3 2FG\n\n+44 (0)121 200 1050 ### Leeds\n\n1 Park Row, Leeds, LS1 5AB\n\n+44 (0)113 244 5000 ### London\n\n30 Crown Place, Earl Street, London, EC2A 4ES\n\n+44 (0) 20 7418 7000 ### Manchester\n\n1 St Michael's, 36 Jackson's Row, Manchester, M2 5AE\n\n+44 (0)161 234 8234 [...] Ladner said that the updated JCT design and build contract not only provides “well needed certainty to users of that contract” but also brings the contract in line with “the later NEC contracts and what had been previously considered the orthodox approach, and what must now be considered to be the market norm”.\n\n Construction Contracts\n Construction\n Construction Advisory & Disputes\n Construction Services\n Construction Standard Form Contracts\n Infrastructure\n Projects\n United Kingdom\n\nContact an adviser\n\nJames Ladner James Ladner\n\nLegal Director\n\n+44 (0) 774 779 1129 (/cdn-cgi/l/email-protection#751f141810065b1914111b100735051c1b06101b011814061a1b065b161a18)\n\nView Profile\n\n## Latest News\n\n### VAT rule change confirmed over education grants after UK Court of Appeal ruling [...] The JCT recently introduced its Design and Build Contract 2024. The update gives employers and contractors in the construction industry clarity as to whether liquidated damages for delay can be charged against a slow performing supplier or contractor where the supplier’s contract has been terminated.\n\nThis issue lacked clarity prior to the UK Supreme Court’s guidance in Triple Point Technology v PTT in 2021. Now, the updated design and build contract reflects the court’s decision.\n\n#### Read more on the new JCT 2024 design & build contract",
      "score": 0.3659556,
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    },
    {
      "url": "https://www.procore.com/en-gb/library/liquidated-ascertained-damages-construction",
      "title": "Liquidated & Ascertained Damages (LADs) in UK Construction | Procore UK",
      "content": "NEC (New Engineering Contract)\n\nThe current edition, NEC4, uses the term \"Delay Damages\" under secondary Option X7. It is worth noting that the NEC4 Engineering and Construction Contract does not use the terminology \"liquidated damages\" itself, though the mechanism operates on the same principle.\n\nIn both cases, the Contract Administrator or Project Manager plays a vital role in certifying the completion date.\n\n### Do LADs Apply After Termination?\n\nOne frequently asked question in UK law concerns whether LADs continue to accrue if the contract terminates before contractors complete the work. [...] Construction worker looking at documents on a worksite\n\nStaying on programme is one of construction's greatest challenges. Contractors must juggle multiple clients' deadlines, labour, and plant – and when delays occur, the consequences extend well beyond inconvenience. Contracts between employers and contractors frequently contain a Liquidated and Ascertained Damages (LADs) clause, holding the contractor liable for damages if they fail to complete on time.\n\nTable of contents\n\n## Understanding LADs in Construction\n\nIn the UK construction industry, Liquidated and Ascertained Damages (LADs) represent a fixed sum, agreed upon in the contract, that the contractor pays to the employer for every day the project runs beyond the agreed Practical Completion date. [...] Specifically, liquidated damages cover the costs for each day the project exceeds the Completion Date. Employers typically withhold these funds from the interim payment via a Pay Less Notice for the work – a deduction that impacts the contractor's preliminaries and margin.\n\n### Qualifying Factors for Liquidated Damages",
      "score": 0.34720555,
      "raw_content": null
    }
  ],
  "formatted": "Source: [PDF] Liquidated Damages - Fenwick Elliott\nURL: https://www.fenwickelliott.com/sites/default/files/l_liquidated_damages.pdf\nConclusion Liquidated damages are commonly used in the construction industry and standard form contracts typically provide for them. However, when considering whether to include liquidated damages, care should be taken to ensure that the provisions are clear (i.e. what the liquidated damages relate to) and workable, and parties must then follow the contractual mechanism. Huw Wilkins June 2024 Footnotes 1 They are provided for in standard form contracts, such as Optional Clause X7 in NEC4. 2 Dunlop Pneumatic Tyre Co Ltd -v- Selfridge & Co Ltd A.C. 847. 3 Cavendish Square Holding BV -v- Talal El Makdessi UKSC 67. 4 EWHC 283 (Comm). 5 EWHC 6 (TCC). 6 Temloc Ltd -v- Errill Properties Ltd 39 B.L.R. 30. 7 Baese Pty Ltd -v- RA Bracken Building Pty Ltd (1990) 6 BCL 137. 8 WASC 246. [...] 8 WASC 246. 9 Cavendish Square Holding BV -v- Talal El Makdessi UKSC 67. 10 Robophone Facilities -v- Blank 1 WLR 1428 CA at 1447; Dunlop Pneumatic Tyre Co Ltd -v- Selfridge & Co Ltd A.C. 847; Cavendish Square Holding BV -v- Talal El Makdessi UKSC 67; Dunlop Pneumatic Tyre Co Ltd -v- New Garage & Motor Co Ltd A.C. 79; Eco World – Ballymore Embassy Gardens Company Limited -v- Dobler UK Limited EWHC 2207 (TCC). 11 Taylor Woodrow Holdings Ltd & Anor -v- Barens & Elliott Limited EWHC 3319 (TCC); Buckingham Group Contracting Ltd -v- Peel L&P Investments and Property Ltd EWHC 1842 (TCC). 12 Rapid Housing -v- Ealing Family Housing 29 BLR 5. [...] Historically, the rate of liquidated damages was required to be a genuine pre-estimate of loss.2 More recently, the Supreme Court reviewed the law in this regard and recast the test.3 In doing so, it recognised that a party may have a legitimate interest in enforcing a liquidated damages provision extending beyond the pecuniary compensation for the breach. The\n\n---\n\nSource: Why NEC Contracts Are Revolutionizing UK Construction (And What ...\nURL: https://medium.com/@nihanthreddy65/why-nec-contracts-are-revolutionizing-uk-construction-and-what-you-need-to-know-38de679222c8\nHong Kong has adopted NEC as a standard for public infrastructure. Singapore’s Building and Construction Authority announced NEC4 uptake in 2024, with specialized Y clauses published to align with local laws. Peru signed an agreement in August 2024 to officially translate and implement NEC for public infrastructure, with US$9 billion in projects already delivered using the suite. Major international projects from tunnel boring machine procurement in France to nuclear waste containers in Germany to the world’s largest radio telescope observatory spanning Australia and South Africa have all used NEC contracts. [...] Improved Dispute Resolution: NEC4 introduced a dispute avoidance option (W3) featuring a Dispute Avoidance Board for proactive resolution before issues escalate. It also added a senior representatives negotiation step before formal adjudication — giving parties one more chance to resolve matters internally. Simplified Fee Structure: NEC3 used separate direct and subcontracted fee percentages. NEC4 simplified this to a single fee percentage, reducing administrative complexity. ## Get nihanth reddy’s stories in your inbox Join Medium for free to get updates from this writer. Subscribe Subscribe - [x] Remember me for faster sign in Value Engineering: [...] Remember me for faster sign in Value Engineering: NEC4 introduced a value engineering percentage allowing savings from contractor-led proposals to be shared in priced contracts. This encourages innovation even in fixed-price scenarios. Technology Integration: NEC4 explicitly accommodates modern construction technology, including Building Information Modeling (BIM). The contract recognizes that digital collaboration tools and data-rich 3D models are now central to project delivery. Payment Application Requiremen\n\n---\n\nSource: Future of NEC Contracts in the UK\nURL: https://www.necplanningsolutions.co.uk/post/the-future-of-nec-contracts-in-the-uk-a-2035-projection\nNEC is not a theoretical future contract in the UK market. It is already established on major programmes. HS2 has described using the NEC3 suite for most of its project requirements, citing industry support and the contract's collaborative approach. Sellafield's Programme and Project Partners framework has operated under NEC4 ECC and PSC contracts. Network Rail confirmed in 2024 that it had adopted the NEC4 Alliance Contract for the proposed £1.4 billion Midlands Rail Hub programme. The question is therefore not whether NEC suddenly arrives. It is how the commercial environment around it continues to change, and what capabilities become more important as it does. [...] The Construction Playbook continues to favour earlier supply chain involvement, integrated timescales and collaborative approaches where they suit the project. NEC has a specific tool in the NEC4 Alliance Contract, designed for multi-party programmes where shared risk and reward models are appropriate. [...] Conclusion The evidence does not support a precise claim about NEC's share of the UK construction market in 2035. It does support a clearer and more commercially useful conclusion: the UK delivery environment continues to move toward earlier engagement, stronger contract management, better digital working and more structured performance measurement. NEC is already established on major programmes and has continued to evolve through its digital platform, Option X29 on climate change and contract mechanisms such as KPI and climate provisions that can support more structured performance management where clients require it.\n\n---\n\nSource: JCT D&B contract 2024 clarifies treatment of liquidated damages at termination\nURL: https://www.pinsentmasons.com/out-law/news/jct-db-contract-2024-clarifies-treatment-liquidated-damages-termination\n+974 4426 9200 #### Explore all Saudi Arabia ### Riyadh Parcel 4.01, 7182 KAFD Ring Road, 2848 Al Aqeeq District, Riyadh 13519 +966 11 260 4900 #### Explore all United Arab Emirates ### Abu Dhabi Unit 8, Level 7, Al Maryah Tower, ADGM Square, Al Maryah Island, Abu Dhabi +971 4 373 9700 ### Dubai The Offices 1, (adjacent to the Dubai World Trade Centre), One Central, PO Box 115580, Dubai +971 4 373 9700 #### Explore all United Kingdom #### Explore all England ### Birmingham 55 Colmore Row, Birmingham, B3 2FG +44 (0)121 200 1050 ### Leeds 1 Park Row, Leeds, LS1 5AB +44 (0)113 244 5000 ### London 30 Crown Place, Earl Street, London, EC2A 4ES +44 (0) 20 7418 7000 ### Manchester 1 St Michael's, 36 Jackson's Row, Manchester, M2 5AE +44 (0)161 234 8234 [...] Ladner said that the updated JCT design and build contract not only provides “well needed certainty to users of that contract” but also brings the contract in line with “the later NEC contracts and what had been previously considered the orthodox approach, and what must now be considered to be the market norm”. Construction Contracts Construction Construction Advisory & Disputes Construction Services Construction Standard Form Contracts Infrastructure Projects United Kingdom Contact an adviser James Ladner James Ladner Legal Director +44 (0) 774 779 1129 (/cdn-cgi/l/email-protection#751f141810065b1914111b100735051c1b06101b011814061a1b065b161a18) View Profile ## Latest News ### VAT rule change confirmed over education grants after UK Court of Appeal ruling [...] The JCT recently introduced its Design and Build Contract 2024. The update gives employers and contractors in the construction industry clarity as to whether liquidated damages for delay can be charged against a slow performing supplier or contractor where the suppl\n\n---\n\nSource: Liquidated & Ascertained Damages (LADs) in UK Construction | Procore UK\nURL: https://www.procore.com/en-gb/library/liquidated-ascertained-damages-construction\nNEC (New Engineering Contract) The current edition, NEC4, uses the term \"Delay Damages\" under secondary Option X7. It is worth noting that the NEC4 Engineering and Construction Contract does not use the terminology \"liquidated damages\" itself, though the mechanism operates on the same principle. In both cases, the Contract Administrator or Project Manager plays a vital role in certifying the completion date. ### Do LADs Apply After Termination? One frequently asked question in UK law concerns whether LADs continue to accrue if the contract terminates before contractors complete the work. [...] Construction worker looking at documents on a worksite Staying on programme is one of construction's greatest challenges. Contractors must juggle multiple clients' deadlines, labour, and plant – and when delays occur, the consequences extend well beyond inconvenience. Contracts between employers and contractors frequently contain a Liquidated and Ascertained Damages (LADs) clause, holding the contractor liable for damages if they fail to complete on time. Table of contents ## Understanding LADs in Construction In the UK construction industry, Liquidated and Ascertained Damages (LADs) represent a fixed sum, agreed upon in the contract, that the contractor pays to the employer for every day the project runs beyond the agreed Practical Completion date. [...] Specifically, liquidated damages cover the costs for each day the project exceeds the Completion Date. Employers typically withhold these funds from the interim payment via a Pay Less Notice for the work – a deduction that impacts the contractor's preliminaries and margin. ### Qualifying Factors for Liquidated Damages"
}