NEC Early Warnings: Use Them or Lose Your Claim

What an Early Warning Actually Is

Under NEC3 and NEC4 contracts, an early warning is a formal notification that something has happened, or might happen, that could increase the total of the prices, delay completion, delay meeting a key date, or impair the performance of the works in use. Either party can issue one. It's in clause 15 (NEC4) and clause 16 (NEC3), and it's mandatory — not optional, not best practice, mandatory.

The point of the early warning system is to surface problems early so they can be managed collaboratively. The NEC philosophy is that problems get more expensive the longer you leave them. A ground condition issue flagged in week 3 might cost £5,000 to resolve. The same issue discovered in week 12 might cost £50,000 because the work has been built on top of it and half the programme has been restructured around it.

Why Subcontractors Don't Use Them

Every subcontractor I've worked with knows what an early warning is. Very few actually issue them. The reasons are always the same: "we don't want to look like we're making excuses," "the PM will just ignore it," "we'll sort it out ourselves," or the most common — "we're too busy to write letters."

All of those reasons are commercially suicidal. Under NEC4 clause 15.4, if a contractor doesn't give an early warning that an experienced contractor could have given, the project manager can assess a compensation event as if the early warning had been given. In plain English: if you could have warned about a problem and didn't, you can't claim for the full impact later. The contract lets the PM reduce your entitlement because you failed to mitigate.

That clause is the most expensive clause in the NEC for subcontractors who don't issue early warnings. I've seen claims worth £200,000 reduced to £40,000 because the subcontractor couldn't demonstrate that they'd flagged the issue when they first became aware of it.

What to Include in an Early Warning

An early warning doesn't need to be a ten-page report. It needs to clearly state: what the matter is, why it could affect the prices, programme, or performance, and what you think should be done about it. That's it. Three paragraphs. Date it, reference the contract clause, and issue it through the formal communication channel (usually email to the project manager with a clear subject line).

Ebrora's Early Warning Builder generates a properly formatted early warning notice from a few inputs: the contract details, the issue description, the potential impact, and your proposed mitigation. It produces a Word document ready to send. Takes about three minutes and it protects your commercial position for the life of the contract.

The Early Warning Register

The contract requires the project manager to maintain an early warning register. In practice, on many sites, this register doesn't exist or isn't kept up to date. That's the PM's problem, not yours — but you should keep your own record of every early warning you issue, when you issued it, who received it, and what the response was. If it goes to adjudication twelve months later, that contemporaneous record is your best evidence.

The Risk Reduction Meeting

When an early warning is issued, either party can instruct a risk reduction meeting (clause 15.2 in NEC4). These meetings are where the early warning system adds real value. Both parties sit down, discuss the risk, consider the options, and agree on actions. The outcome gets recorded and the early warning register gets updated. It's not adversarial — it's problem-solving. And the best projects I've worked on are the ones where risk reduction meetings happen weekly as a standing agenda item, not just when someone raises a formal early warning.

Link to Compensation Events

Early warnings and compensation events are related but separate mechanisms. An early warning says "this might be a problem." A compensation event says "this is a problem and we need to be paid for it." Issuing an early warning doesn't automatically trigger a compensation event, and you still need to notify CEs separately under clause 61. But the early warning record provides the evidential foundation for the CE — it shows that you flagged the issue promptly, proposed mitigation, and acted in good faith.

If you're dealing with variations as well, check our guide on variations under NEC. And if you need to issue a formal delay notification, the Delay Notification Builder generates one in minutes.

Stop treating early warnings as confrontational. They're not complaints — they're the contract working as intended. Issue them early, issue them often, and keep copies of everything. Your commercial position depends on it.