{
  "query": "NEC4 contract early warning vs compensation event notice frequency benchmarks",
  "raw_results": [
    {
      "url": "https://www.somaprojectcontrols.com/resources/guides/nec4-early-warnings-the-mechanism-most-teams-waste/",
      "title": "NEC4 Early Warnings — The Mechanism Most Teams Waste · SOMA Project Controls",
      "content": "## The link to compensation events\n\nThe early warning mechanism sits upstream of the compensation event mechanism, and understanding the relationship is essential to using both effectively. An early warning is a prospective notification of a matter that could have an effect. A compensation event notification (under Clause 61) is a retrospective notification of an event that has occurred and falls within the Clause 60.1 list. They are different mechanisms for different purposes. [...] Some matters are explicitly not early warnings. Risks that are listed in the Contract Data part one — employer's risks — are not events the contractor needs to notify as early warnings if they arise in expected ways. Events that have already occurred and have already had their effect are compensation events (if they fall within Clause 60.1) rather than early warnings. The test for early warning is prospective: something that could happen, or has started to happen but whose full effect is still to come. Retrospective notification of an event that has already completed its impact is a compensation event notification, not an early warning. [...] The link is that many matters that start as early warnings become compensation events when they actually occur. A notified early warning about a supply chain delay becomes a compensation event notification when the delay is confirmed and its impact is measurable. A notified early warning about a design query becomes a compensation event if the resolution of the query meets the Clause 60.1 criteria (typically 60.1(1) — the Project Manager gives an instruction changing the Works Information). The early warning does not itself produce an extension of time or additional cost; the compensation event does.",
      "score": 0.82048416,
      "raw_content": null
    },
    {
      "url": "https://www.neccontract.com/news/nec-early-warning-notices-a-unique-risk-management-tool-of-mutual-benefit?srsltid=AfmBOoq8nPaataLj3rvWmAXZseYMiWCi9h0bE90JhkV885PYvPcYECvV",
      "title": "NEC early warning notices: a unique risk management tool of mutual benefit",
      "content": "Certainly ignoring early warning notices is a dangerous game. Apart from a possible breach of clause 10, any compensation event that may follow is likely to be costlier to the client than if the matter had been dealt with at the outset. But remember there is no direct link between early warning notices and compensation events – an early warning notice might not lead to a compensation event, and a compensation event might occur without an early warning notice.",
      "score": 0.72489023,
      "raw_content": null
    },
    {
      "url": "https://www.neccontract.com/news/nec-early-warning-notices-a-unique-risk-management-tool-of-mutual-benefit?srsltid=AfmBOooydKa8dALty2Xjaj1n3MwAyX60kiXMApcozqjhBCgsjcZkU0bz",
      "title": "NEC early warning notices: a unique risk management tool of mutual benefit",
      "content": "Certainly ignoring early warning notices is a dangerous game. Apart from a possible breach of clause 10, any compensation event that may follow is likely to be costlier to the client than if the matter had been dealt with at the outset. But remember there is no direct link between early warning notices and compensation events – an early warning notice might not lead to a compensation event, and a compensation event might occur without an early warning notice.",
      "score": 0.72489023,
      "raw_content": null
    },
    {
      "url": "https://www.neccontract.com/news/nec-early-warning-notices-a-unique-risk-management-tool-of-mutual-benefit?srsltid=AfmBOopWc6hKMtD9noN4kDbYJtSEBi0dzV7NCsaImQAAv6ccxs53BZ15",
      "title": "NEC early warning notices: a unique risk management tool of mutual benefit",
      "content": "Certainly ignoring early warning notices is a dangerous game. Apart from a possible breach of clause 10, any compensation event that may follow is likely to be costlier to the client than if the matter had been dealt with at the outset. But remember there is no direct link between early warning notices and compensation events – an early warning notice might not lead to a compensation event, and a compensation event might occur without an early warning notice.",
      "score": 0.72489023,
      "raw_content": null
    },
    {
      "url": "https://www.ceca.co.uk/wp-content/uploads/2022/09/CECA-NEC4-Bulletin-No.5-Early-Warnings-and-Liability-for-Not-Notifying-May-2021.pdf",
      "title": "[PDF] Early Warnings and Liability for Not Notifying - CECA NEC4 Bulletin",
      "content": "believe this issue to be a compensation event. Whilst the Project Manager cannot say it is not a compensation event due to CECA NEC4 Bulletin the lack of an early warning, they can state that the quotation will only be assessed as though the Contractor had notified an early warning at that point in time (clause 61.5) if they feel one should/could have been raised. Considering that this lack of notification may have lost the Project Manager opportunity to mitigate the impact of the event on the Client. If a subsequent compensation event quotation is issued at say £60k, where the Project Manager considers that had the early warning been notified, they could have mitigated half of the resultant quote, they can then assess the quotation at half the cost, i.e. £30k. If they believe that all [...] one. What else has changed under NEC4 compared to NEC3 with regards to early warnings? The name of the meeting has been changed from the “risk reduction meeting” to the “early warning meeting”. Clause 15.3 brings additional emphasis on the early warning meeting to review previous actions and decide any different actions that need to be taken and who should take them. It also now obligates the Project Manager to issue the revised Early Warning Register within one week of holding the early warning meeting. How could a lack of early warning affect the Contractor financially? If something occurs that costs the Contractor additional money that is not their risk under the contract, they will notify accordingly as to what and why they believe this issue to be a compensation event. Whilst the [...] It can, in the sense that if the Project Manager fails to notify an early warning about a potential issue, the Contractor is not going to be able to come up with mitigation ideas for something they did not know about. For example, if the Project Manager was aware of a potential late issue of Client design, by notifying an early warning to this effect means they can discuss with the Contractor the potential impact that this late design issue could have upon their programme. The Contractor may be able to point out the elements of the design that they need first to mitigate any delay, that might then provide the Client some time to produce the rest of the design. Without any such early warning, the late notice could result in a compensation event at a value that could have been avoided or at",
      "score": 0.70799106,
      "raw_content": null
    }
  ],
  "formatted": "Source: NEC4 Early Warnings — The Mechanism Most Teams Waste · SOMA Project Controls\nURL: https://www.somaprojectcontrols.com/resources/guides/nec4-early-warnings-the-mechanism-most-teams-waste/\n## The link to compensation events The early warning mechanism sits upstream of the compensation event mechanism, and understanding the relationship is essential to using both effectively. An early warning is a prospective notification of a matter that could have an effect. A compensation event notification (under Clause 61) is a retrospective notification of an event that has occurred and falls within the Clause 60.1 list. They are different mechanisms for different purposes. [...] Some matters are explicitly not early warnings. Risks that are listed in the Contract Data part one — employer's risks — are not events the contractor needs to notify as early warnings if they arise in expected ways. Events that have already occurred and have already had their effect are compensation events (if they fall within Clause 60.1) rather than early warnings. The test for early warning is prospective: something that could happen, or has started to happen but whose full effect is still to come. Retrospective notification of an event that has already completed its impact is a compensation event notification, not an early warning. [...] The link is that many matters that start as early warnings become compensation events when they actually occur. A notified early warning about a supply chain delay becomes a compensation event notification when the delay is confirmed and its impact is measurable. A notified early warning about a design query becomes a compensation event if the resolution of the query meets the Clause 60.1 criteria (typically 60.1(1) — the Project Manager gives an instruction changing the Works Information). The early warning does not itself produce an extension of time or additional cost; the compensation event does.\n\n---\n\nSource: NEC early warning notices: a unique risk management tool of mutual benefit\nURL: https://www.neccontract.com/news/nec-early-warning-notices-a-unique-risk-management-tool-of-mutual-benefit?srsltid=AfmBOoq8nPaataLj3rvWmAXZseYMiWCi9h0bE90JhkV885PYvPcYECvV\nCertainly ignoring early warning notices is a dangerous game. Apart from a possible breach of clause 10, any compensation event that may follow is likely to be costlier to the client than if the matter had been dealt with at the outset. But remember there is no direct link between early warning notices and compensation events – an early warning notice might not lead to a compensation event, and a compensation event might occur without an early warning notice.\n\n---\n\nSource: NEC early warning notices: a unique risk management tool of mutual benefit\nURL: https://www.neccontract.com/news/nec-early-warning-notices-a-unique-risk-management-tool-of-mutual-benefit?srsltid=AfmBOooydKa8dALty2Xjaj1n3MwAyX60kiXMApcozqjhBCgsjcZkU0bz\nCertainly ignoring early warning notices is a dangerous game. Apart from a possible breach of clause 10, any compensation event that may follow is likely to be costlier to the client than if the matter had been dealt with at the outset. But remember there is no direct link between early warning notices and compensation events – an early warning notice might not lead to a compensation event, and a compensation event might occur without an early warning notice.\n\n---\n\nSource: NEC early warning notices: a unique risk management tool of mutual benefit\nURL: https://www.neccontract.com/news/nec-early-warning-notices-a-unique-risk-management-tool-of-mutual-benefit?srsltid=AfmBOopWc6hKMtD9noN4kDbYJtSEBi0dzV7NCsaImQAAv6ccxs53BZ15\nCertainly ignoring early warning notices is a dangerous game. Apart from a possible breach of clause 10, any compensation event that may follow is likely to be costlier to the client than if the matter had been dealt with at the outset. But remember there is no direct link between early warning notices and compensation events – an early warning notice might not lead to a compensation event, and a compensation event might occur without an early warning notice.\n\n---\n\nSource: [PDF] Early Warnings and Liability for Not Notifying - CECA NEC4 Bulletin\nURL: https://www.ceca.co.uk/wp-content/uploads/2022/09/CECA-NEC4-Bulletin-No.5-Early-Warnings-and-Liability-for-Not-Notifying-May-2021.pdf\nbelieve this issue to be a compensation event. Whilst the Project Manager cannot say it is not a compensation event due to CECA NEC4 Bulletin the lack of an early warning, they can state that the quotation will only be assessed as though the Contractor had notified an early warning at that point in time (clause 61.5) if they feel one should/could have been raised. Considering that this lack of notification may have lost the Project Manager opportunity to mitigate the impact of the event on the Client. If a subsequent compensation event quotation is issued at say £60k, where the Project Manager considers that had the early warning been notified, they could have mitigated half of the resultant quote, they can then assess the quotation at half the cost, i.e. £30k. If they believe that all [...] one. What else has changed under NEC4 compared to NEC3 with regards to early warnings? The name of the meeting has been changed from the “risk reduction meeting” to the “early warning meeting”. Clause 15.3 brings additional emphasis on the early warning meeting to review previous actions and decide any different actions that need to be taken and who should take them. It also now obligates the Project Manager to issue the revised Early Warning Register within one week of holding the early warning meeting. How could a lack of early warning affect the Contractor financially? If something occurs that costs the Contractor additional money that is not their risk under the contract, they will notify accordingly as to what and why they believe this issue to be a compensation event. Whilst the [...] It can, in the sense that if the Project Manager fails to notify an early warning about a potential issue, the Contractor is not going to be able to come up with mitigation ideas for something th"
}