Client trying to recover monies for a defect dispute p

We’re a subcontractor working on a nec 4 ecs main option A contract. You’ll have to forgive me if I’m asking simplistic questions as I’m not a QS.

There is a dispute between ourselves and client over a defect and who is paying for it.

*end July carried out instructed works. Verbal agreement between ourselves and our clients design manager to change the scope when inspection took place prior to grout installation (this was a demolition and repair instruction to old structure not an existing defect). We don’t have any correspondence on devolved responsibility to other members of the clients team and any agreement wasn’t followed up by written agreement. Worth noting the 9 months prior the design manager has made many changes verbally which we’ve followed without issue.

  • mid September nec supervisor reviewed changes and raised a defect as didn’t meet scope post clients design manager leaving their business. By this point the works are complete and client has progressed with completing follow on works (not fully)
    *at point of enquiry and defect from the NEC supervisor the client hadn’t finished their works - part of Tarmaccing and other finishings. The client continued to finish these works whilst they raised an RFI to try get the defect accepted as is. Unfortunately the designers and their client wouldn’t accept this so defect stood
  • our client sends us email about the defect and makes comments ‘we need to follow contract processes to close this out’. This was end of September
    *we’ve refuted the defect as design manager changed works information and we had adhered to these changes.we requested instruction but wasn’t forthcoming
    *throughout trying to agree liability the client took upon themselves to carry out enabling works and install traffic mgt to carry out works to original scope start October - breakout tarmac, kerbs and so forth without any agreement between parties they would do this and charge us as we hadn’t accepted defect.
  • to maintain the working relations we carried out concrete repair FOC but still don’t accept the defect.
    *Client carried out reinstatement of road/white lining/waterproofing/kerbs post repair early November
    *as we approach final account client writes to us on 3rd December by email that the email of 29th September notified us it was a defect for Ourselves therefore they’ll be charging us for their contributions towards rectifying it.

All works were carried out before completion date so they can’t use clause 46.1 to recover cost.

All other defect clauses are unamended

There is an added z clause to the contract called contra charges - any of their liabilities and/or costs for any act/omissions or liabilities caused by the subcontractor for not following works information can be charged to ourselves. This is an addition to original nec clause 29. There is no wording around time limits to this clause.

I can appreciate the wording around the above z clause nulifys the usual liabilities clauses 80-81 and any other referenced in contract date or 1 which would usually be the deciding factor in an unamended nec contract for this issue.

The only option I can see to help stop the client reducing monies due to amendments of clauses is notification timelines but not sure how these works from the client side.

*Client notified defect 29th September
*Client notified intent to recover money on 3rd December by email only. No contract terminology used referring to clauses and using forms set out n contract for cen/pmi - 9.2 weeks post defect notice/ 9 weeks post carrying out enabling works
*Client provides build up of costs on 23rd December with simple comment on email we’ll be reducing these costs
*We refute cost on 23rd December but ask which clauses they intend to recover monies with immediate response of the clause above

The contract has normal contract response times within it in line with NEC. There are forms that have been setup and referenced in contract for instructions and CENs.

Finally for the question; client carried out works without agreement, they have opportunity to recover costs through additional z clause but should they have notified earlier and would they be time barred due to when they notified by email in December and possibly they still haven’t notified as they haven’t provided an official instruction or a CEN?

For those who manage to read my novel thank you and I look forward to your replies.

Quite a lengthy question! I’ll deal with the principles and leave you to work out your position.

Clause 46 deals with uncorrected Defects and gives the Contractor the right to assess the cost of having Defects corrected by other people in certain circumstances either (1) the Subcontractor did not correct within the defect correction period or (2) the Subcontractor is not given access before the defects date.

It sounds like (1) applies to your situation in which case the defect correction period begins at Completion for Defects notified before Completion and when the Defect is notified for other Defects.

If you don’t agree with their assessment then your only recourse is to dispute resolution. I’d advise you to consider using the Senior Representatives procedure in the first instance as adjudication can be expensive and the value of the dispute might not be worth it.

Not that their rights under clause 46 and by the sounds of it their Z clause also do not require their assessments to be agreed with you.