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What does NEC4 clause 60.1(14) mean?

An event which the contract states to be a Client's liability is a compensation event.

Updated: 15 September 2026. By Jack Butler-Kettle, Quantity Surveyor & Claims Consultant.

The answer

Clause 60.1(14) links the compensation event list to the contract's allocation of liabilities. The event is an event which is a Client's liability stated in the contract. The contract's liability and insurance section lists the Client's liabilities, which broadly cover the Client's use or occupation of the works, the Client's own fault or breach, loss of or damage to things the Client supplies, causes the contract treats as outside the Contractor's control, and any additional liabilities stated in the Contract Data. Clause 60.1(14) then says that if one of those events happens and affects the Contractor, it is a compensation event, so the Contractor is not left to a claim outside the contract. To rely on the paragraph the Contractor shows the event, that it falls within one of the liabilities the contract states as the Client's, and its effect on the Contractor's work. The Contractor notifies the event under clause 61.3 within eight weeks of becoming aware that the event has happened. The change to the Prices is assessed under clause 63.1 as the effect on actual Defined Cost by the date of the notification and forecast Defined Cost afterwards, plus the Fee, typically repair or replacement, standing time and protective measures, with the cost and time risk allowances clause 63 requires; where insurance responds to the same loss, the recovery has to be reconciled so the same cost is not paid twice. What most often goes wrong is that the Contractor repairs damage caused by the Client's own staff and treats it as a Defect correction, so it is never notified as a compensation event and the eight weeks pass, or that the cause is disputed and no contemporaneous record was taken. Any delay to the Completion Date is assessed separately under clause 63 by the programming expert.

Example

The situation

A joinery contractor has fitted reception desks and panelling in a building the Client has begun to occupy. The Client's own facilities staff, moving equipment in through the reception, damage the panelling and one desk, and the contract states that cause as the Client's liability.

What happens

  1. The joinery contractor photographs the damage on the day and records the Client's staff involvement in the site diary.
  2. The contractor gives an early warning and notifies a compensation event under clause 61.3.
  3. The quotation assesses under clause 63.1 the replacement of the damaged panels and desk top at £4,750 and the additional site attendance and protection at £1,130.
  4. The change in Defined Cost of £5,880 has the Fee added at the fee percentage in the Contract Data.

The quotation

ItemAmount
Replacement of the damaged panels and desk top£4,750
Additional site attendance and protection£1,130
Change in Defined Cost£5,880

The outcome

Because the damage arose from the Client's liability it is not a Defect, so the cost is not treated as the contractor's own correction work.