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NEC ECC: How long after Completion can an account be disputed?

0 votes
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As Contractor under an Option A we would like to know if there is a contract provision or statutory provision that sets a timeline for an account to be disputed. The project was handed over in April 2016 (although no Completion certificate was issued). Directly after handover there was an adjudication due to the Employer not submitting a payment notice against the last application. An award was made in full to the Contractor. The Employers representatives wrote and stated they would seek to recover sums due to the works not being in accordance with the Contract (which is denied). However nothing further has been received since June 2016. Could the Employer still dispute the account?
asked Sep 3 in NEC3 Payment by John S  
   

2 Answers

+1 vote
I am assuming that you are under option W2, for disputes.

The last sentence of clause  W2.4 says "The dispute may not be referred to the tribunal unless this notification" - to go to the tribunal - "is given within four weeks of the notification of the Adjudicator's decision".

However, some question the validity of having a time barring provision on going to the courts.

In addition, they could potentially argue that it is a different dispute. I.e. the Adjudicator's decision was about the Employer not submitting a payment notice. The new dispute could be over what that payment notice should have been etc.

If this is the case, then it would be 6 years from Completion or 12 years if signed as a deed (which construction contracts commonly are).
answered Sep 4 by Jon Broome (23,720 points)  
0 votes
First you need to confirm which dispute resolution option applies to your contract - either W1 or W2? Most construction projects in the UK fall under the Housing Grants Construction and Regeneration Act 1996 (the Act) and as such W2 should have been included in your contract.

If this is the case then in order to comply with the Act the contract allows disputes to be referred to adjudication at any time (clause W2.1) which means that the Employer could still go to dispute on the account and the first you would know about it would be a referral notice which would give you little time to prepare your defence.

If W1 applies to your contract then the timescales for notification and referral of disputes are defined in the Adjudication Table (clause W1.3), assuming that the Employer's dispute is brought as "any other matter" then a referral to adjudication could only happen between 2 and 4 weeks after you have been notified of the dispute which would potentially give you more time to prepare your defence.

If you want to mitigate the risk of dispute on the account and close out your liabilities you could approach it commercially and attempt to get the Employer to enter into a settlement agreement. Not a contractual mechanism but having a piece of paper that says "full and final settlement" could set your mind at rest.
answered Sep 4 by Neil Earnshaw (6,620 points)