Relevant Events vs compensation events: what JCT-trained teams get wrong
Updated: 3 days ago
By Roman Bazelchuk | NEC Accredited Project Manager | APMG Project Planning and Control
Founder, NEC Planning Solutions Ltd
A Relevant Event buys time. A compensation event buys time and money in one assessment. JCT splits entitlement across two lists, Relevant Events for extensions and Relevant Matters for loss and expense. NEC runs a single list and a single quotation. That structural difference is where JCT-trained teams lose money.
Vocabulary transfers faster than machinery. A contractor arriving on its first NEC job picks up the words inside a fortnight. Relevant Event becomes compensation event, extension of time becomes a change to the Completion Date, loss and expense becomes Defined Cost. The terms map onto each other neatly enough that nobody stops to ask whether the things behind them do.
They do not. A Relevant Event and a compensation event are not one object under two names. They have different triggers, different assessors, different tests and different outputs. The differences are not academic. They decide whether a team that has done the work and carried the delay is paid for it.
The wider move between the two forms, and the four things that change at once, is set out in the guide to what actually changes when a contractor moves from JCT to NEC. How NEC delay analysis then runs, forwards from the dividing date rather than backwards from completion, belongs to the delay analysis and extension of time guide. What neither covers is the entitlement mechanism itself, which is what follows.
It is worth the time, because the most expensive mistake on a first NEC job is rarely a missed notice. It is a quotation built as though it were a JCT extension of time application.
What a Relevant Event actually does
Under the JCT Standard Building Contract 2016 the Relevant Events sit at clauses 2.26 to 2.29. The contractor notifies, the contract administrator forms a view, and an extension is fixed on what the contract calls a fair and reasonable basis. The output is a later Completion Date and, with it, relief from liquidated damages.
Notice what the output does not include. Money. Loss and expense runs on its own list, the Relevant Matters, and the two lists overlap without being identical. Exceptionally adverse weather is the clean example: a Relevant Event, so it buys time, but not a Relevant Matter, so it buys nothing else. A contractor can be granted a full extension and recover none of the prolongation that went with it.
The programme sits outside all of this. The Standard Building Contract requires a master programme under clause 2.9, but critical paths are optional and depend on what the Contract Particulars say, and the programme is updated when the contractor applies for an extension. On JCT Design and Build there is no express requirement for a programme at all. The programme is therefore evidence, assembled when a case needs making, rather than a live instrument. That single fact shapes every habit a JCT team carries onto an NEC job.
What a compensation event actually does
NEC starts from the same commercial question and builds a different machine. Clause 60.1 lists the events. The contractor notifies, submits a quotation, and the quotation is assessed.
The output is one assessment that changes the Prices and the Completion Date together. There is no second application, no separate list, no parallel route for money. Clause 63.1 sets the currency of that assessment as the effect on Defined Cost plus the Fee, and clause 63.2 allows the tendered rates to be used only where the project manager and the contractor agree. The tender is not the measure of the change. Cost is.
The programme is not evidence here. It is the instrument the assessment runs on, which is why NEC spends so much of its length on programme acceptance and revision, and why a contractor without a current accepted programme cannot demonstrate the time limb of its own quotation.
Relevant Events vs compensation events: three differences
Set out plainly, three differences do most of the damage in translation.
Who decides, and against what standard
Under JCT the contract administrator fixes what is fair and reasonable. It is a judgement, exercised by a professional, and reasonable people reach different answers on the same facts. Under NEC the assessment is closer to arithmetic. The event is impacted on the accepted programme and the delay to planned Completion is measured. That is more predictable when the programme is in good order and far less forgiving when it is not. NEC removes discretion and replaces it with a calculation, which favours the party whose records support the calculation.
Whether time and money travel together
This is the difference that costs the most. JCT separates them by design, so a JCT team is trained to secure the extension first and pursue loss and expense afterwards, often much later and often as part of a final account negotiation. NEC fuses them. One quotation carries both limbs and, once assessed, that assessment is the entitlement. The instinct to bank the time now and argue the money later has nowhere to go, because there is no later.
We call that join the Programme-to-Money Bridge: the point where the planner's assessment of the event and the quantity surveyor's build-up have to arrive as one document rather than two. On JCT the bridge is optional and usually late. On NEC the contract builds it for you and gives you eight weeks to cross it.
What the programme is for
On JCT the programme supports a claim. On NEC the programme is the thing the claim is calculated on. A JCT-trained team can run an entire job on a programme that would never survive NEC acceptance and feel no consequence until the first extension application. On NEC the consequence arrives at the first compensation event, which is almost always earlier than anyone expects.
Relevant events vs Compensation events routes are easier to see than to describe.
The notice reflex has flipped on both contracts
For years the working assumption was that NEC was strict about notices and JCT was forgiving. Half of that was always wrong and the other half has stopped being true.
Under NEC, clause 61.3 gives the contractor eight weeks from becoming aware of an event to notify it. Miss it and the entitlement does not survive, however strong the underlying case. Everything therefore turns on what awareness means.
The courts have treated it as an objective question rather than a subjective one. In Sitol Ltd v Finegold [2018] EWHC 3969 (TCC), the Technology and Construction Court was construing the four-week adjudication time bar in the NEC3 Short Contract rather than clause 61.3, and held that a party could not stop the clock simply by failing to open a letter addressed to it. The word carries the same sense in clause 61.3. An argument that nobody senior read the instruction is weaker than it feels.
NEC also carries a second, quieter penalty with no JCT equivalent. If the project manager decides the contractor failed to give an early warning that an experienced contractor would have given, clause 61.5 requires that decision to be notified when the contractor is instructed to quote, and clause 63.7 then requires the event to be assessed as if the warning had been given. The entitlement is not extinguished. It is reduced to what it would have been had the contractor spoken up. A contractor can be comfortably inside the eight weeks and still lose money for having stayed quiet.
The JCT side is more nuanced than the folklore allows. The extension of time notice is not a condition precedent, and JCT Design and Build 2024 did not make it one; it added a timetable rather than a sanction. The loss and expense notice is different. In FES Ltd v HFD Construction Group Ltd, where entitlement was expressed as subject to compliance with the notice clause, the court held that wording created a condition precedent and the appeal court upheld it. So JCT forgives a late time notice and punishes a late money notice, which is exactly what a contract that keeps two separate lists would do.
The mistake this explains
Put the two machines together and the commonest first-job error becomes obvious.
A JCT-trained team receives an instruction, recognises it as a change, and starts building the case. Records are gathered, the delay is measured after the fact, and a considered submission goes in once the position is clear. That is correct behaviour on JCT and close to fatal on NEC. It burns the eight weeks, it treats the quotation as a time claim with cost to follow, and it produces a submission describing what happened rather than forecasting what the event will cost.
The NEC sequence runs the other way. Notify early on thin information, then build. Price the effect on Defined Cost plus the Fee rather than reaching for the tendered rates. Carry both limbs in the same quotation, because there is no second bite. How that quotation is actually assembled sits in the guide to how the money is built in an NEC compensation event quotation, and the notification clock itself in the article on the compensation event time bar. Where a team is running its first NEC job without that reflex, independent CE assessment is usually cheaper than the first quotation it gets wrong.
Summary
A Relevant Event and a compensation event answer the same commercial question through different machinery. JCT separates time from money, leaves the assessment to professional judgement, and treats the programme as evidence produced when required. NEC merges time and money into one assessment, calculates rather than judges, and treats the programme as the instrument the calculation runs on.
The habits that work on the first form fail on the second, and they fail quietly, in the space between a notice that went in late and a quotation that only asked for half of what it was owed. What the discipline looks like across a full delivery is set out in the NEC3 gas infrastructure case study. The translation worth learning is not the vocabulary. It is the sequence.
Frequently asked questions
Is a compensation event the same as a Relevant Event?
No. A Relevant Event under JCT moves the Completion Date and nothing else; money is claimed separately under the Relevant Matters. A compensation event under NEC changes the Prices and the Completion Date in a single assessment. The lists overlap in subject matter, but the machinery, the assessor and the output are different.
Can a JCT Relevant Event give time without money?
Yes, and it happens often. Exceptionally adverse weather is a Relevant Event, so it supports an extension of time and relief from liquidated damages, but it is not a Relevant Matter, so it carries no entitlement to loss and expense. Contractors can win a full extension and recover none of the prolongation cost behind it.
Which contract is stricter about notices?
Neither, and the difference is instructive. NEC clause 61.3 imposes one eight-week limit measured from awareness, judged objectively, and it bars time and money together. JCT treats them separately: the extension of time notice is not a condition precedent, but the loss and expense notice has been held to be one, so a late notice there costs the money and not the time.
Why can NEC quotations not simply use tendered rates?
Clause 63.1 assesses a compensation event on its effect on Defined Cost plus the Fee. Clause 63.2 permits tendered rates only where the project manager and the contractor agree to use them. The default is cost-based, which is why NEC contractors need cost records that a JCT team would have had no reason to keep.
Does the programme matter as much under JCT?
Not in the same way. The JCT Standard Building Contract requires a master programme under clause 2.9, with critical paths optional depending on the Contract Particulars, and Design and Build does not expressly require one. Under NEC the accepted programme is the instrument every compensation event assessment is calculated on.
About the author
Roman Bazelchuk is the Founder of NEC Planning Solutions Ltd, a UK project planning and controls consultancy supporting contractors on NEC and FIDIC projects. He is an NEC Accredited Project Manager and holds the APMG Project Planning and Control qualification.
First NEC compensation event on a JCT-trained team?
If quotations are going in as time claims with the cost to follow, if notices are held back until the case looks watertight, or if the programme cannot carry an assessment, specialist support puts the sequence right before the first assessment sets the pattern.
