Both NEC and FIDIC contracts expressly state that notice of a claim is a "condition precedent".
The 2017 suite is very prescriptive and now contains a number of other detailed processes and procedures that set out exactly what is expected of each of the parties and the consequences if they fail to comply. In some cases, non-compliance triggers a time bar.
FIDIC 2nd edition 2017 contains 5 time bar clauses in relation to Claims and dispute resolution process and 1 time bar in relation to amounts due in the Final Payment Certificate.
Key changes in FIDIC 2nd Edition 2017 are;
- time bars apply to both Parties, and
- circumstances that the claiming Party can challenge in justifying late submission of a Notice of Claim (Sub-clause 20.2.5) – prejudiced, prior knowledge of the event (or circumstance) or the contractual (or other legal basis) of the Claim,
Notice provisions come in all shapes and sizes, and the warning is that it is a question of interpreting and applying each clause.
Most clauses require a notice of claim before a claim is submitted to litigation and/or arbitration, and in addition probably three things. Those are:
- a statement about the nature of the claim;
- the amount of the claim, which may be an estimate; and
- the contractual basis for the claim (here's the problem area).
All of that information has to be contained in a notice that's given within the time stipulated within the clause.
The Court's most recent approach, certainly as far as the common law is concerned, is generally to treat any such notice provision whether it is described expressly as a condition precedent or not, as a condition precedent.
So, if you do not serve your notice in time or you served your notice in time but it is deficient, e.g. didn't adequately state the nature, amount or contractual basis of the claim, then you are barred from bringing a claim. And the trend in common law outside the specific area of construction law contracts is to favour certainty over fairness or flexibility.
Below are some useful case laws related to time bar:
- Grove Developments v. S&T UK Ltd [2018] EWCA Civ 2448) - distinguish from notices under standard construction contracts (pay less etc) – "adequate agenda for adjudication"
- Heritage Oil & Gas Ltd v. Tullow Uganda Ltd [2013] EWCA Civ 1048 and Teoco Ltd v. Aircom Jersey4 Ltd and others [2018] EWCA Civ 23. What must a party do where required to state "legal basis" for the claim – must not leave "real scope for doubt" about nature and basis of claim.
- Hong Kong: Maeda Corporation and China State Construction Engineering (Hong Kong) Limited v. Bauer Hong Kong Limited [2020] HKCA 830 - notification clause based on FIDIC 2017 suite.
Giving notice under construction contracts was discussed in our webinar on 25 March 2021 with Gordon Nardell QC, Twenty Essex and Sue Kim, HKA. Click here to view the webinar and detailed notes.
How can Barton Legal help?
At Barton Legal we have extensive experience in all the standard contract forms, including JCT as well as NEC, IChemE, and FIDIC.
We believe that an increased understanding of contractual terms and the roles and responsibilities of all parties ensures a successful conclusion to a project, which is why we always use plain English and ensure you understand and can apply the terms of your contract.
Our aim is to reduce legal gobbledegook and increase collaboration between parties to increase the prospects of completing your project on time and on budget.
We place great emphasis in the early stages of the contract on understanding and preparing thoroughly, in order to avoid costly disputes later.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.