NEC Case Law

The number of reported court cases involving interpretation of NEC contracts are limited. It could be argued that this is due to the NEC’s focus on collaborative relationships and equitable risk share. However, the growth in Alternative Dispute Resolution (ADR), and in particular adjudication, is just as likely to have reduced the number of cases that would otherwise be heard in court and reported publicly. In the period May 2023 to April 2024 the Adjudication Society reported that 2,264 adjudication referrals were made in the UK.[1] The first edition of the NEC contract was published in 1993 and in 1998 the Construction Act[2] was enacted giving parties to a construction contract the legal right to refer a dispute to adjudication ‘at any time’. Statutory adjudication under the Construction Act applies to England, Wales and Scotland. Similar provisions apply in Northern Ireland.[3] In 2016, the Construction Contracts Act 2013, came into force also bringing statutory adjudication to the Republic of Ireland. The NEC contracts also include provisions for contractual adjudication which the parties can adopt where the governing law does not afford the right of adjudication.[4] NEC contracts require the parties to first refer their dispute to an adjudicator before referral to the tribunal.[5] If a dispute is ultimately referred to the tribunal and the parties have chosen Arbitration, knowledge of the decision remains limited to those involved as arbitration proceedings are also held in private. Arbitration is more common in international disputes. Whilst the international use of NEC contracts has grown over the last ten years[6] , its predominant use is in the UK. Decisions from the Scottish and Northern Irish courts are not binding on English courts but may be persuasive. It is also worth noting that NEC contracts that have undergone significant amendments are a common feature of disputes. A number of court cases involving NEC contracts relate to the enforcement of the adjudicators decision or a party seeking to have the decision nullified. In these cases the court’s decisions centre on matters of natural justice, bias and compliance with procedural matters and as a result it is not often that we learn anything significant or new about the NEC contract itself. That said, the cases covered below do include a sample number of such cases in order to give a flavour of what the parties have disputed.

If you know of a relevant NEC case not listed here or wish to receive a summary table of those I have identified, please send me a message at davidhunter@danielcms.co.uk.

[1] 2024 Construction Adjudication in the United Kingdom: Tracing trends and guiding reform. Professor Renato Nazzini & Alexsander Godhe

[2] The Housing Grants, Construction and Regeneration Act 1996.

[3] The Construction Contracts (Northern Ireland) Order 1997.

[4] Option W1 when the Housing Grants, Construction and Regeneration Act 1996 does not apply.

[5] The tribunal is either the state court (litigation) or Arbitration.

[6] For example: Hong Kong, Australia, Peru.