Ask for the reasons in writing straight away, and diary your dispute deadline from the day you got the rejection. If a PM rejects a compensation event under NEC4 ECC, clause 61.4 requires the reasons to be stated in the notification; under NEC3 it's good practice but the clause doesn't say so.
What decides your next step is which edition you have, which reason (if any) really applies, and whether your contract uses W1 or W2. A bare "rejected" is still probably a reply, so don't assume it restarts the failure route in PM silence. See the full NEC questions section.
What to do, in date order
- Today: note the date you received it. Under the NEC4 subcontract's W1 table, a challenge to an action of the party managing the contract goes to Senior Representatives within four weeks of becoming aware. NEC3 W1 has its own limit of four weeks to notify. Under W2 you can refer at any time, but don't drift: check the table.
- Within a day or two: ask for the reasons. Refer to the allowed list and ask which one applies.
- Add what they may not have seen. The refusal might be based on missing facts. Send your evidence.
- Keep mitigating and keep records. Being refused doesn't excuse poor records. They're what you'll need if it goes further.
- Before the deadline: decide. Escalate, adjudicate or let it go, on a view of the value and how good the evidence is.
The only reasons on the list
| Reason available under 61.4 | How to test it |
|---|---|
| The event arises from your fault | Did your failure actually cause it? Nearby errors don't count |
| It hasn't happened and isn't expected to | Do you have dated proof? |
| Notified too late (listed in NEC4) | Check the awareness date and if the event escapes the bar: see the exception |
| No effect on Defined Cost, Completion or a Key Date | Show any effect at all. Size is for the assessment |
| Not one of the listed events | Go through the wording of the sub-clause you rely on, and any others that might fit |
"No budget", "you should have priced it", and "the Client doesn't agree" aren't on that list. The guide to clause 61.4 explains each reason in more detail.
Sample request
Could a reply without reasons count as no reply at all?
It's arguable under NEC4, because the clause makes the reasons part of the notification. So you could send a failure notice as well, and say that you consider the reply to be incomplete. But don't rely on it. A later adjudicator may treat a bare rejection as a valid decision, even if a poor one, and you'd then have let your dispute period run. Do both: send the request and keep the dispute clock running.
What you'll probably hear
- A vague answer. "Contractor's risk" isn't itself a listed reason. Ask which test it means.
- A real one. The reasons may be sound. If your event genuinely isn't on the list, it's better to find out now.
- A change of heart. The Project Manager can correct it. A changed decision is an event in its own right under 60.1(8), which isn't a problem here since it's in your favour.
- "Let's talk at the end of the job." Talks don't stop the W1 clock unless the contract or a written agreement says so.
Contract and practice
The contract gives you a list and a dispute route. In practice, make it easy to talk: a one-page summary with the programme extract and the Scope wording gets further than a long letter. Think also about who's refusing: a Project Manager under pressure from the Client may welcome a clear argument to take back. If that doesn't work, the disputes overview shows the options, and when to adjudicate looks at the choice. Take advice if the value warrants it.
Related guides
- NEC Questions Answered: Real Situations on Site
- The PM's Assessment of Our Compensation Event Is Too Low
- We Cannot Price the Quotation Yet Because Facts Are Unknown
- The Work Is Already Done: How Do We Quote?
- The PM Has Not Replied to Our Compensation Event Notice
- The PM Has Not Replied to Our Quotation
How this looks in Contract Status
A rejected notification: the decision, the reason and the dates stay on the record. See the worked example.
See how this works in practice
Click through Contract Status with sample contracts: raise the notice, reply to it, and watch both sides of one record.
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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.