NEC W3 sets up a standing Dispute Avoidance Board, of one or three people named in the Contract Data, who visit during the job and help the Parties deal with potential disputes before they harden. It's an NEC4 Option with no NEC3 equivalent, and it replaces adjudication rather than adding to it, so a Party unhappy with the outcome goes on to the tribunal.
That last point has a big practical consequence. As W3 has no adjudication stage, commentators generally treat it as unsuitable for a contract covered by the UK Construction Act without bespoke amendment, because the Act gives a right to adjudicate at any time. For most UK construction work, the realistic choice is Option W2. W3 is one of the NEC secondary Options you'd more often meet on work the Act doesn't reach.
How it's meant to work
- Appointment. The Contract Data names the Board's members, usually chosen before work starts, so they're in place well before there's a problem.
- Regular visits. Members visit the Site and get to know the job and its people.
- A potential dispute arises. A Party refers it to the Board early, at the stage of a disagreement rather than a finished claim.
- The Board helps. It helps the Parties settle the matter and can give a view on it. Its recommendation isn't binding in the way an Adjudicator's decision is.
- If unresolved. A dissatisfied Party can take the matter to the tribunal, within the time the Option allows.
We don't give W3's clause numbers or periods here, so read them in your own contract. Take care not to apply the W1 or W2 periods to it. The NEC4 subcontract doesn't offer W3.
How the routes compare
| W1 | W2 | W3 | |
|---|---|---|---|
| Applies | The Act doesn't apply | The Act applies | Generally, not with the Act unamended |
| Standing body | No | No | Yes, the Board |
| First step | Senior Representatives | Adjudicator, or Senior Representatives by agreement | The Board |
| Binding interim decision | Adjudicator's decision | Adjudicator's decision | None in the Option itself |
| Next step | Tribunal | Tribunal | Tribunal |
When W3 could be worth a look
- Large, long projects outside the UK, or otherwise outside the Act, where a dispute could stall work for a long time.
- Projects with several contracts, if the same Board can see the whole picture.
- Clients with experience of dispute boards on major international work.
What to weigh up
| For | Against |
|---|---|
| Issues are raised early, while evidence is fresh | A standing cost for the whole job, even with no dispute |
| Board members know the job when problems come up | A shortage of suitable people may limit choice |
| Can preserve working relationships | No binding interim outcome, so a Party that won't settle can go on to a tribunal |
| Can stop small matters growing | Possible legal complications with the Construction Act |
A short example
A fictional hydroelectric scheme overseas, on a contract outside the UK Act. The Contract Data names a three-person Board, and the members visit every four months. On one visit, the Contractor raises a disagreement about ground conditions in a tunnel, before it has submitted a formal claim. The Board tours the tunnel, reads the records and suggests how the Parties might share out the extra work. They settle after two meetings. A second issue, about Defined Cost, doesn't settle and goes on to the tribunal. The Parties have still avoided the delay of two parallel disputes.
Practical tips if you select it
- Take legal advice on the Act and the governing law before you select it, and record the reasoning.
- Budget for fees and visits. Decide how they are to be shared and paid.
- Agree the members early. Check they're available for the whole job and independent of the Parties.
- Use the Board. A board only called on when things are already bad has lost most of its value. Put visits and key risks on the agenda, alongside early warnings.
- Read the wider picture in dispute avoidance under NEC and NEC4 dispute changes.
Related guides
- NEC Secondary Options: X, Y, W and Z Clauses Explained
- Z Clauses: Writing Additional Conditions
- Common Z Clause Mistakes
- Choosing Secondary Options
- W1: Dispute Resolution Where the Act Does Not Apply
- W2: Dispute Resolution Under the Construction Act
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.
Take the guided tour Book a demo
Take the NEC4 ECC quiz, use the free NEC tools or download free NEC templates.
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.