NEC Client liabilities are the events listed in clause 80.1 of the NEC4 ECC, and if one happens, the Client bears the consequences. They include unavoidable effects of the works, faults by the Client's people, faults in the Client's design, war, radioactive contamination, parts taken over, and anything added in the Contract Data.
In NEC3 ECC the equivalent list is the Employer's risks, also at 80.1. It forms part of the wider NEC risk and liabilities section.
The list in plain English
This summary follows the NEC4 subcontract text, which sets out the equivalent list and uses the same clause number. Read your own Section 8 and Contract Data for the exact wording.
| Item | A site example |
|---|---|
| Claims from Others that are due to the unavoidable effect of the works, or of using the Site for them | A neighbour's claim for loss of light from a building that is built as designed |
| Claims from Others due to negligence, a breach of statutory duty or interfering with a legal right by the Client or its people (other than the Contractor) | The Client's own security contractor damages a neighbouring fence |
| A fault of the Client or its people | The Client's direct contractor causes a flood in the works |
| A fault in design in the Scope provided by the Client, or in an instruction changing the Scope | A Client-designed beam is undersized and cracks during erection |
| Damage to or loss of Plant and Materials the Client supplies, up to the point the Contractor receives and accepts them | Client-supplied lift motors damaged on the way to site |
| Loss of or damage to the works and Plant and Materials from war and similar events, strikes and riots not confined to the Contractor's workforce, and radioactive contamination | Civil disorder damages unfinished work |
| Loss of or damage to parts taken over (with exceptions) | A tenant's forklift damages a completed wall |
| Loss of or damage to the works and items the Client keeps on Site after a termination | Theft of retained materials after the Contractor has left |
| Damage to or loss of the Client's other property, unless it's connected with Providing the Works | A storm damages the Client's existing building, unconnected to the works |
| Additional liabilities in the Contract Data | Whatever the tender documents add |
The exceptions on parts taken over
Taking over doesn't transfer everything. Until the Defects Certificate, loss, wear or damage stays with the Contractor where it was caused by:
- a Defect that existed at take over;
- an event before take over that wasn't itself the Client's liability; or
- the Contractor's activities on the Site after take over.
So a floor that cracks because of a pre-existing Defect is not covered by this item, even if the Client has moved in. Early use has its own route: see the compensation event for early use.
What makes this list so important
An event on the list is a compensation event under 60.1(14). So the Contractor has a route to time and money for the effect on the works, and a right to be paid back for what it has paid Others under the recovery clause. Those are two separate things. The compensation event has to be notified within the normal time limit in clause 61.3.
What changed from NEC3
| Point | NEC3 ECC | NEC4 |
|---|---|---|
| Name | Employer's risks | Client's liabilities |
| Fault of the paying party | Within the claims item | Stated as its own item |
| Client's other property | No stated item | A stated item, with an exception |
| The Contractor's side | Whatever isn't the Employer's | Its own list |
Reading the list on a real contract
- Check the Contract Data first. Additional liabilities are a common way of moving named risks, such as asbestos in a stated area or a known utility diversion.
- Check Z clauses. Some Clients strip items out or qualify them. See Z clauses.
- Ask "whose fault or event?" Most disputes are about who employed the person at fault. The Contractor is expressly left out of the Client's "people", and its subcontractors are contracted to it, not to the Client.
- Record causes early. Photographs and a contemporary incident note matter more here than almost anywhere else.
What people get wrong
- Assuming "unavoidable" covers careless working. Noise that could have been reduced by reasonable methods isn't unavoidable.
- Confusing this with weather or ground risk. They have their own events at 60.1(13) and 60.1(12).
- Assuming a Client's liability means the Client's insurer pays. The Insurance Table covers the Contractor's liabilities. Clients need to arrange their own cover for what they carry. See insurance under NEC.
Related guides
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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.