NEC ECS: Coronavirus - Compensation Event Options

The contract:

NEC3 Subcontract Option A
Option X2 included
Amended to omit 60.1(19) as a compensation event.

If notifying a Compensation Event, what would the approach be considering 60.1(19) is deleted?

I understand that 60.1(19) is where ‘force majeure’ would come in. In the absence of this, however, 19.1 seems to do the same thing but requires the project manager to act.

The PM has not given an instruction under 19.1 so can a Notification of CE be submitted simply stating that there has been a failure to issue an instruction under 19.1 and we would consider this to be a CE. Essentially achieving the same end as submitting a CE under 60.1(19)?

Alternatively, should a CE be notified on the basis of a change in law under Option X2, and if so how should this be composed?

Perhaps both?

Jon Broome’s answer in relation to the ECC is equally relevant to the ECS:

With clause 60.1(19) being deleted you will have to look elsewhere for your CE though which could be any of:

  • clause X2: changes in the law
  • clause 60.1(2): Contractor does not allow access
  • clause 60.1(4): Contractor gives an instruction to stop or not to start work

The force majeure clauses do not work as you describe. Yes under clause 19 the Contractor is obliged to give an instruction if the event occurs however, in the case where this doesn’t happen, the Subcontractor can still notify the CE under clause 60.1(19). The instruction is not a condition precedent on notifying the CE. In your case it’s a moot point anyway as the CE was deleted from the contract so you have to rely on one of the others.

As a side, check your Z clauses in case 60.1(19) was deleted but replaced with something similar, I’ve seen this in contracts where the drafter isn’t happy with the NEC approach.

My point regarding 19.1 is that the Contractor should issue an instruction if an event occurs e.g. a flood, pandemic etc. If they acted in accordance with the contract then there would be an instruction and this would be a CE under 60.1(1), (2), or (4). The instruction itself becomes the CE and not the underlying event as would be the case under 60.1(19). As 60.1(19) is deleted then as the SC the only option seems to be to notify the compensation event under 61.3 on the basis the Contractor has not notified the event and ‘guess’ what instruction they would issue, as the underlying event itself is not a CE. Or is the SC in no mans land until the Contractor instructs?

Will double check the other Z Clauses, thanks for the advice.