Compensation events are a critical component of NEC4 contracts, designed to manage changes and unforeseen circumstances effectively. Properly identifying, notifying, and assessing these events is essential to maintaining risk management and ensuring fair time and cost compensation. At Sunderland Ives, we provide comprehensive guidance and support to help parties navigate the complexities of compensation events.
OUR SERVICES INCLUDE:
Identifying compensation events
Understanding which events qualify as compensation events is fundamental. We assist parties in identifying events that fall under this category, including changes in the Scope, delays caused by external factors, and unforeseen site conditions. Proper identification ensures timely notifications and helps prevent disputes down the line.
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Notification requirements
NEC4 requires parties to notify each other promptly of any events that could be classified as compensation events. in many instances such notice is a condition precedent to entitlement. We guide clients in drafting clear and timely notifications to meet these contractual obligations, minimising the risk of disputes arising from late or inadequate communication.
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Assessing the cumulative time and cost effects
Compensation events can have cumulative impacts on both time and cost. Our team provides practical advice on assessing these effects, focusing on how smaller, frequently occurring events can accumulate to cause significant delays or additional costs. We utilise established methodologies to ensure accurate assessments.
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Evaluating the effect on Defined Cost
When a compensation event occurs, it is essential to evaluate its impact on the Defined Cost as outlined in the contract. We assist in assessing how delays and disruptions affect the Accepted Programme and the associated costs, ensuring that claims are substantiated with clear evidence.
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Revising the Accepted Programme
Maintaining an up-to-date and accurate programme is crucial for effective project management. We provide expert advice on revising the Accepted Programme in accordance with the contract requirements, ensuring that all parties have a shared understanding of the project timeline and milestones.