{"id":115689,"date":"2022-09-20T11:17:26","date_gmt":"2022-09-20T10:17:26","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=115689"},"modified":"2022-09-20T11:17:26","modified_gmt":"2022-09-20T10:17:26","slug":"the-importance-of-maintaining-good-communications-in-nec-contracts-to-avoid-disputes","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/the-importance-of-maintaining-good-communications-in-nec-contracts-to-avoid-disputes\/115689\/","title":{"rendered":"The importance of maintaining good communications in NEC contracts to avoid disputes"},"content":{"rendered":"

In Part 1 of our series covering communications in NEC contracts, John Elven, senior consultant at Arbicon<\/a>, discusses the importance of maintaining good communications in accordance with the requirements of NEC contracts as a means of promoting dispute avoidance<\/h2>\n

NEC contract disputes often arise when the parties fail to communicate in the manner required by the contract. For example, I have seen situations where verbal instruction has been given to a site operative by the project manager or supervisor, and there has been nothing subsequently put into writing. This has led to disputes where the instructed works have been carried out by the contractor but not paid for, with the project management team asserting that the works were never instructed.<\/p>\n

To avoid this type of situation occurring, it is important to look at the NEC contract to see what is required<\/a> when it comes to communications between the parties (including for the purposes of this article, the project manager and supervisor).<\/p>\n

NEC contracts are prescriptive when it comes to the requirements for communications related to matters such as the giving of notices, making applications for payment (as NEC 4) and the procedures required with respect to compensation events. Whilst these are matters to be considered on another occasion, this article will focus on NEC 4 clause 13, which details the NEC general requirements with respect to \u2018communications\u2019.<\/p>\n

NEC 4 clause 13: 13.1<\/h3>\n

Starting with clause 13.1, we note: \u201cEach communication which the NEC contract requires is communicated in a form which can be read, copied and recorded. Writing is the language of the contract.\u201d<\/p>\n

So, right from the start, NEC\u2019s intention is clear \u2013 every communication should be in writing; it is the very language of the contract itself. These communications could include documents sent by post, email, and any other electronic means.<\/p>\n

NEC 4 clause 13: 13.2<\/h3>\n

In keeping with the trend towards digital contract management, NEC 4 continues in clause 13.2:<\/p>\n

\u201cIf the Scope specifies the use of a communication system, communication has an effect when it is communicated through the communication system specified in the Scope.<\/p>\n

If the Scope does not specify a communication system, communication has an effect when it is received at the last address notified by the recipient for receiving communications or, if none is notified, at the address of the recipient stated in the Contract data.\u201d<\/p>\n

Those familiar with NEC 3 may remember that clause 13.2 uses similar wording to that used in the second half of the NEC 4 version above. However, NEC 4 now includes the use of a \u2018communication system\u2019 as \u2018specified in the scope\u2019 (\u2018scope\u2019 is akin to NEC 3\u2019s \u2018works information\u2019).<\/p>\n

It is essential that those working under NEC 4 projects familiarise themselves with any communications requirements that may be specified in the Scope \u2013 such as the use of \u20184P\u2019.<\/p>\n

If use of a system such as \u20184P\u2019 has been specified, those using NEC 4 must pay particular attention to the fact that \u201ca communication has an effect when it is communicated through the communication system specified in the scope.\u201d [Emphasis added.] In other words, if you do not use the communication system as specified in the Scope, your \u2018communications\u2019 could become meaningless and have no effect!<\/p>\n

NEC 4 clause 13: 13.3<\/h3>\n

Another problem frequently encountered with \u2018communications,\u2019 is the timing. To ensure that all matters are dealt with promptly under NEC 4, clause 13.3 requires that:<\/p>\n

\u201cIf the contract requires the project manager, the supervisor or the contractor to reply to a communication unless otherwise stated in these conditions of contract, they reply within the period for reply.\u201d<\/p>\n

Firstly, we can discern that \u2018the project manager, the supervisor\u2019 and \u2018the contractor\u2019 are all required by the contract to respond to a communication.<\/p>\n

Further, NEC 4 imposes constraints to ensure that all matters are dealt with in a timely manner. For example, clause 61.3 identifies the maximum amount of time within which a contractor must notify a compensation event, i.e., 8 weeks.<\/p>\n

Other sections of the NEC contract impose a timetable by which certain actions are supposed to have been carried out \u2013 e.g., clause 62.3, where the contractor has 3-weeks to submit a quotation after being instructed to do so (in respect of a compensation event), and then the project manager has 2-weeks to respond (please note that timings may be altered pursuant to clause 62.5).<\/p>\n

However, where the \u2018conditions of contract\u2019 do not impose a specific timeframe, clause 13.3 still requires that other communications be responded to \u2018within the period for reply.\u2019 This period will be defined in the contract data Part 1 and is typically a period of 2-weeks.
\nThe prompt responses to communications, as required by NEC contracts, ensure that matters are dealt with in a timely manner which then results in a more efficiently run project.<\/p>\n

In my experience, failure to observe the NEC\u2019s requirements in respect of communications has led to several unnecessary disputes that could so easily have been avoided had the parties acted \u2018as stated in the contract\u2019 and issued all their communications in writing, and on time.<\/p>\n

Part 2 will continue to look at the provisions of NEC 4 clause 13 where we will consider, amongst other things:<\/strong><\/p>\n