Dispute Resolution Changes in NEC4

The main change to NEC4 dispute resolution is a new first step: Senior Representatives from each Party try to settle a dispute before it goes to the Adjudicator. NEC4 also adds Option W3, a Dispute Avoidance Board, and the section's title now mentions avoiding disputes as well as resolving them.

This page compares the NEC3 and NEC4 ECC, using periods from the NEC4 ECS text where stated. Check your own form. For the broader subject, see NEC disputes and termination, and for other edition changes, the NEC4 contracts guide.

The Options compared

Option	NEC3 ECC	NEC4 ECC
W1	Adjudication, then the tribunal, for contracts the UK Construction Act doesn't apply to	Senior Representatives first, then the Adjudicator, then the tribunal
W2	Adjudication, then the tribunal, for contracts the Act applies to	Senior Representatives if the Parties agree, then the Adjudicator, then the tribunal
W3	Not available	Dispute Avoidance Board, then the tribunal

The difference between W1 and W2 reflects the statutory right to adjudicate at any time. A contract covered by the Act can't make negotiation a precondition, so the W2 step needs the Parties' agreement. For more on choosing, read Option W1 and Option W2.

How Senior Representatives work

The NEC4 ECS sets out this sequence, and it gives a good picture of the process:

1. The referring Party tells the Senior Representatives and the other Party what the dispute is about.
2. Each Party gives the other its statement of case within one week, limited to ten sides of A4 plus supporting evidence unless they agree otherwise.
3. The Senior Representatives spend up to three weeks meeting and using whichever process they think will help.
4. They then produce a list of agreed and unagreed issues. Agreed issues are put into effect.
5. Anything said or written in the statement or discussions stays out of later adjudication or tribunal proceedings.
6. Under W1, a Party who wants to take an unagreed issue further gives a notice of adjudication within two weeks of the list, or of when it should have been produced.

Choosing your representatives

Names go in the Contract Data, in a new section on resolving and avoiding disputes. Choose people who:

• weren't involved in the decision being disputed;
• have authority to settle;
• can realistically find time at short notice.

A Party can replace its representative by telling the other Party who the replacement is, so don't leave a name in place after someone moves on. See the Senior Representatives guide.

Option W3: the Dispute Avoidance Board

W3 is the bigger conceptual change. The Board, of one or three members named in the Contract Data, visits regularly and gets to know the job, so that it can help with potential disputes as they appear. A potential dispute goes to the Board, the Board helps the Parties settle it, and either Party unhappy with the outcome can take it to the tribunal.

Published commentary points out that because W3 has no adjudication stage, it doesn't suit contracts covered by the UK Construction Act, where the right to adjudicate applies. So take legal advice before specifying it on a UK construction contract. The W3 guide and dispute avoidance have more detail. The ECS doesn't offer W3.

A worked example

A fictional Option C contract under W2, with illustrative dates. The Project Manager and Contractor disagree over whether £120,000 of plant cost is Disallowed Cost.

• Route 1, Parties agree to use Senior Representatives: the commercial directors exchange ten-page statements in a week, meet twice over three weeks, and agree to settle at £75,000. The cost was the price of a few meetings, and the working relationship is intact.
• Route 2, no agreement: the Contractor goes straight to adjudication, as the Act allows. It may get a quicker binding answer, at a higher cost, and with the working relationship under more strain.

Neither route is automatically right. But the discussion is useful in nearly every case, and nothing said in it can be used later.

What people get wrong

• Missing a time limit because of talks. Time limits for referring disputes don't pause just because people are talking. Note them, and agree any extension in time. See time limits for disputes.
• Leaving representatives blank. A blank Contract Data entry creates an argument just when you need things to go smoothly.
• Using the project team as representatives. People defending their own decisions are unlikely to settle.
• Forgetting the final assessment. Clause 53 sets its own limits for referring a dispute. See the NEC4 final assessment.
• Reusing an NEC3 Adjudicator appointment. In NEC4, the W Options use the Dispute Resolution Service Contract for this appointment.

Related guides

• NEC4 Contracts: A Complete Guide
• Proposed Instructions and Quotations in NEC4
• NEC4 Terminology Changes
• NEC4 Contract Data Explained
• Cost and Fee Changes in NEC4
• Final Assessment of the Amount Due in NEC4

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.