Yes, you can challenge them, and delay damages deducted under NEC can be wrong on a checkable point. What decides it is whether Option X7 is in the contract, which Completion Date was used, when the clock stopped and what was still open when the deduction was made.
Start with the arithmetic and the date, because neither needs any argument about fault. This page follows the NEC4 Engineering and Construction Contract (ECC); X7 has the same three clauses in NEC3. For how the Option works, see Option X7; more live problems are in NEC questions answered.
Six checks, in order
| Check | If it fails |
|---|---|
| Is X7 selected, with a rate in the Contract Data? | No contract rate exists to deduct. Anything else is a claim to be argued, not a line in a certificate |
| Was the rate correct? With sections under Option X5, was it the rate for that section? | Recalculate |
| Was the start date the current Completion Date, after every implemented compensation event? | A common slip: the tender date was used. Recalculate |
| Was the end date the earlier of Completion and take over of the works? | Days after that shouldn't count, even if the certificate came later |
| Was any part taken over early? | The rate falls from that date under X7.3, whether or not anyone noticed. See the Client moving in early |
| How did the deduction reach the payment? | In the certificate: part of the amount due. Taken off after it: needs a valid pay less notice |
The last check often matters most
Under Option Y(UK)2, the certificate states the notified sum. If the Client paid less than that figure and gave no notice at least seven days before the final date for payment (Y2.3), the shortfall looks recoverable for that cycle, even if damages are genuinely owed. What a missed pay less notice means goes through it. The damages may then come back in the next certificate, so this buys cash and time, not a final win.
What to do now
- Rebuild the figure on one page: start date, end date, days, rate, any reductions and the total.
- List every open compensation event affecting planned Completion, with its stage. Notify any you have not, within eight weeks of becoming aware (61.3). Without this, the date can't move later.
- Push the events forward. Submit overdue quotations and use the failure notices if replies are overdue. Damages while events are open covers this in more detail.
- Write to the Project Manager asking for a correction in the next certificate under 50.6. A wrong figure carries interest when corrected for a mistake (51.3).
- Diary the dispute route. Under W2, adjudication is available at any time. Under W1, four weeks runs from when you became aware. See time limits for disputes.
Sample letter, in our own words
"Certificate [number] deducts [£] as delay damages for [days] days from [date]. We disagree. The current Completion Date, after compensation events [numbers], is [date]. Completion occurred on [date]. Part of the works was taken over on [date], and no reduction has been applied under X7.3. We calculate the correct figure as [£], shown on the attached sheet. Please correct this under clause 50.6 in the next certificate, with interest. Our position on open events [numbers] is reserved."
A fictional example
| Illustrative item | As certified | Corrected |
|---|---|---|
| Start | Original date, 1 June | Current date, 8 June |
| End | Certificate date, 30 June | Completion, 26 June |
| Days | 29 | 18 |
| Rate of £2,500 a day | £72,500 | £45,000 |
Two simple corrections are worth £27,500 here before any event is argued about.
What you will probably hear back
- "Your events aren't implemented, so the date stands." That is right on the wording, for now. The answer is repayment later under X7.2, with interest.
- "You'd have been late anyway." If an event delayed planned Completion on the Accepted Programme, the assessment under 63.5 is about that, not about a general view of who was to blame.
- "We can claim actual loss too." X7 is an agreed rate. If someone threatens more, or you think the rate can be attacked, take legal advice on your contract.
The rate applies whatever the Client's real loss turned out to be, so arguing about actual loss rarely helps. In practice, a sensible settlement often looks at the events and damages together, so keep the two calculations ready side by side.
Related guides
- NEC Questions Answered: Real Situations on Site
- Can Delay Damages Apply While Compensation Events Are Unresolved?
- The Client Has Not Paid on Time: What Are Our Rights?
- The PM Certified Far Less Than We Applied For
- The Client Moved In Before Completion: What Happens?
- Can the PM Refuse Completion Because of Snagging?
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This guide is general information in our own words, not legal advice. Your contract and its Contract Data always govern. NEC, NEC3 and NEC4 are trade marks of Thomas Telford Ltd; Contract Status is not affiliated with or endorsed by NEC.