I would welcome some guidance/views on the common use of Vesting Certificates on NEC3 contracts. These seem to be issued quite commonly on large civils projects to secure ownership of materials outside the Working Areas.
I believe that “Vesting” should not used under NEC, ownership is dealt with Cl.70 - “Title”. The Schedule of Cost Components does allow for payment of materials outside the Working Areas (SCC: 3 - Plant & Materials). The issue I see with this is who now insures the materials if they are paid for by the Employer and “vested”? Would the Contractor be right to claim they are now exempt from their insurance policy, as they are no longer the owner of the materials? Should a “Certificate of Title” be used instead for NEC? Cl.70 is clear on what and how materials change ownership, as stated in the Works Information. If the materials are not named in the Works Information how can the Title be changed ?
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@WilliamBrown Would you be able to advise?
Anyone able to comment on this please ? Key question is: “Can vesting be used under NEC3, when there is no allowance/clause for it’s use in the contract?”.
@stevebrownassociates Would you be able to help with this questions?
Hi LU, so the clauses which cover title of P & M 'outside of the Working Areas are 70.1 and 71.1.
With regards to your specific question in relation to the use of Vesting under NEC3, there is nothing within the NEC to exclude the established way of vesting things. Clause 71.1 refers the Supervisor and Contractor to the Works Information for how things should be marked, the Employer’s WI should state the requirements for marking, if they do not the PM can always change the WI.
On the question of insurance, clause 80.1 sets out the Employer’s liabilities and 81.1 says that the Contractor is liable for everything not carried by the Employer.
Clause 84.1 obliges the Contractor to provide the insurances stated in the insurance table, the first item is “loss of or damage to the works, Plant and Materials” - there is nothing under 80.1 to transfer the liability to the Employer.
Happy to discuss.
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Thanks Steve, much appreciated. In my example the materials would be vested to the Employer, but still insured by the Contractor, correct ?
Hi LU, yes that’s correct.
Perhaps worth mentioning for anyone reading it in the future that vesting certificates are not effective under Scots law, only under English and Welsh. You might be well advised to find out exactly where your materials are.
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