Is it necessary to respond to each Early Warning Notification, and if not what are the consequences?
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No. Nothing in the contract says you HAVE TO respond.
If you are the Project Manager though, you do have to enter it into the Risk Register.
And if the Contractor instructs a risk reduction meeting, you are obliged to attend (although the contract has no sanction / remedy if you do not). More often than not, this is a regular weekly or fortnightly event put into the project diary.
And at that risk reduction meeting you do have obligations listed in clause 16.3 which definitely include agreeing actions which, as the Project Manager, you have to record.
Set aside the express contractual obligations though. If you do not, as PM, take prompt action on EWs then it is likely that the impact will be bigger than if you did not. As a PM that is not what you want !