NEC contracts—dispute resolution

The following Construction practice note provides comprehensive and up to date legal information covering:

  • NEC contracts—dispute resolution
  • What is a dispute?
  • Senior Representatives
  • Adjudication
  • NEC4—Option W1
  • NEC4—Option W2
  • NEC3—Options W1 and W2
  • Dispute Avoidance Board
  • Litigation/arbitration
  • Mutual trust and co-operation

NEC contracts—dispute resolution

This Practice Note considers the dispute resolution procedure under the NEC3 and NEC4 contracts, including discussions between Senior Representatives, adjudication, Dispute Avoidance Board (DAB) recommendations and final resolution by litigation or arbitration. It focuses specifically on the provisions of the Engineering and Construction Contract (ECC).

The dispute resolution provisions are found in Options W1, W2 and (in the NEC4 ECC) W3, one of which must be selected by the parties when they enter into the contract. The parties are also required to provide important information in the Contract Data, for example, whether disputes are to be finally resolved by litigation (ie court proceedings) or arbitration.

If the contract is subject to the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996), then Option W2 must be selected, as it is the only one which allows disputes to be referred to adjudication at any time. For guidance on when the HGCRA 1996 applies, see Practice Note: What is a construction contract under the HGCRA 1996?

In the NEC4 ECC, the dispute resolution Options provide as follows:

OptionFirst stageSecond stageThird stage
W1Senior Representatives (mandatory)Adjudication (mandatory, not HGCRA 1996 compliant)Litigation or arbitration
W2*Senior Representatives (optional)Adjudication (mandatory, HGCRA 1996 compliant)Litigation or arbitration
W3DAB (mandatory)Litigation or arbitrationN/A

*In April 2019 the NEC published Z clauses to provide for the use of a DAB under

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