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The Project Has Finished but Compensation Events Are Still Open

Yes, open compensation events after Completion can still be settled, because Completion doesn't end the process. The real deadlines come later: no new event is notified after the cut-off in clause 61.7, and under NEC4 the final assessment follows the Defects Certificate within four weeks, whether or not your events are closed.

So the question is which stage each open event has reached, and who has failed to act. The periods below are for the NEC4 ECC unless stated. For related problems, see NEC questions answered.

What to do now

  1. Find the two dates. Get the defects date and, if issued, the date of the Defects Certificate. Everything else is planned back from these.
  2. List every open event. Include anything you know about but haven't notified. Remember the eight-week limit in 61.3.
  3. Put each one in the table below, and name who holds the next step.
  4. Use the failure notices. If the PM has gone quiet, notify the failure. That's what starts the further two weeks.
  5. Agree a closure programme. See the final account plan for the timing.
  6. Protect the final assessment. Anything still unsettled when it arrives may need a referral within four weeks of its issue. See disagreeing with the final assessment.

Where each event has stalled

StageWho actsPeriodIf nothing happens
Contractor's notification with no replyPM1 week (61.4)Contractor notifies the failure; after a further 2 weeks it counts as an event, and quotations count as instructed
Quotation instructed, not sentContractor3 weeks (62.3)PM can make its own assessment (64.1)
Quotation sent, no replyPM2 weeks (62.3)Contractor notifies the failure; after a further 2 weeks it is treated as accepted (62.6)
PM said it will assess, nothing issuedPMThe quotation period (64.3)Contractor notifies the failure; treated acceptance of the quotation can follow (64.4)
Event known, never notifiedContractor or PM8 weeks for the Contractor (61.3). See the exception belowPrices and dates don't change for the Contractor's late event

The eight-week bar doesn't catch an event arising from the PM's instruction, notification or certificate, or a changed decision. Those can still be notified late, up to the 61.7 cut-off. See NEC time bars for how the limits work.

The final cut-off differs by edition

FormNo event is notified after
NEC3 ECC (61.7)The defects date
NEC4 subcontract (61.7, ECC numbering)The issue of the Defects Certificate
NEC4 ECC (61.7)Check the wording in your own contract; it has a matching cut-off at the same clause number

That cut-off bars a new notification. It doesn't cancel an event already notified but not yet settled.

The contract against practice

The contract says the process is the same after Completion. A quotation still sets out the effect on the Prices and dates, and the assessment still rests on the same rules. Under NEC4, that means actual Defined Cost up to the dividing date and forecast cost after it (63.1), even if the later cost is now known. See pricing an event after the work is done.

In practice, the problems are people and records. Site staff have moved on, and the evidence of who was where is harder to find. Start with the largest events and ask both sides to settle the rest in a batch. Once an event is implemented, it stays as assessed (66.3), so get the figure right.

Why it matters by main Option

  • Options A and B: an unimplemented event means the Prices haven't changed, so the final amount understates it.
  • Options C and D: events move the target. The final share (clause 54) depends on the final total of the Prices, so every open event affects the share for both sides. Clients have a real interest in closing them.
  • Option E: payment follows Defined Cost, so the money effect is small. Closing them matters mainly for any Completion Date dispute.

A sample chaser

Compensation event [ref]: we submitted our quotation on [date]. The two-week period for your reply has passed. Under clause 62.6 we notify you of this failure. If it continues for a further two weeks, the quotation is treated as accepted. We can meet on [date] to go through this and the other open events on the attached list.

What the other side is likely to say

  • From the PM: "It's all going into the final account." The contract has no such shortcut, and the periods above still apply. An agreed batch settlement is fine if it's recorded event by event.
  • From the Contractor: "We never got an answer, so it's accepted." Treated acceptance requires the Contractor's failure notice and the further two weeks. Silence alone isn't enough.
  • Either way: "Too late." Check the actual dates, including who should have notified what.

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.