Compensation Events – Time Distant Assessments of Delay

April 21, 2026

This article examines how NEC compensation events (CEs) should be evaluated after the fact and why the distinction between prospective and retrospective assessment matters.

Under the NEC, when a CE occurs under core Clause 6, the Contractor must notify the Project Manager (PM) within eight weeks. Failure to do so generally results in the loss of entitlement to time and cost, unless the CE stems from a PM instruction or communication. Entitlement to additional time is assessed prospectively using the Accepted Programme in place at the dividing date, forecasting the impact on planned Completion. This contemporaneous approach relies on timely notification, active programme management, and early agreement of delay impacts.

When the process breaks down

Challenges arise when these mechanisms are not followed, for example, when no Accepted Programme exists, when the PM delays action pending actual outcomes, or when quotations are prepared long after the event. In such cases, the CE may be distant in the past, prompting debate over the appropriate method of assessment.

These issues have been central to two recent adjudications in which Pyments acted as appointed experts. Although NEC drafting indicates that a prospective approach should apply even after the event, case law shows nuance. In Northern Ireland Housing Executive v Healthy Buildings Ltd (2017), the court confirmed that while NEC3 requires a prospective analysis, an after‑the‑event assessment should also make use of the best available information on actual cost and delay, with Deeny J noting “why should I shut my eyes and grope in the dark when the material is available to show what work [Healthy Building] actually did and how much it cost them".

Three approaches to retrospective time assessment

Three practical approaches can be used to assess time entitlement after the event:

1. Strict Prospective Assessment - Applying a strict interpretation of the NEC contract (a purely prospective analysis) using the last accepted programme. This identifies the critical path shown in the last Accepted Programme, even if that is not the latest programme issued for acceptance. From which the event is forecast, and the impact on planned Completion is measured, i.e. without the benefit of hindsight. Whilst contractually compliant, it does not align with the Northern Ireland case, and if the Accepted Programme is outdated would likely produce unrealistic results as it would not consider aspects such as the Contractors own progress and efficiencies.

2. Accepted Programme Updated for Actual Progress - Update the last Accepted Programme with progress known at the dividing date (this can usually be identified from programmes that were issued for acceptance but were rejected). This identifies the critical path shown in the last Accepted Programme based on progress achieved, but instead of applying the forecasted effect of the delay, consider the as-built/actual effect of the CE on the remaining Work at the time of the event i.e. with the benefit of hindsight.

3. Latest Programme Issued for Acceptance - Use the last programme issued for acceptance (if deemed realistic and reasonable) and impacting the CE with as-built data. This approach identifies the critical path at the time the event as notified(contemporaneously), using the latest programme issued for acceptance, whether or not it has been formally accepted. This programme would account for any changes in the logic or sequence from the last Accepted Programme, for example, if works were omitted or changed post the Accepted Programme) and evaluates the impact of the event while accounting for the contractor’s actual progress and any preceding events. This approach is slightly different from the above and is typically used when the last Accepted Programme is so outdated and/or the sequence has changed so much that relying on it would produce an unrealistic assessment. This method determines the critical path contemporaneously as at the dividing date, but instead of applying the forecasted effect of the delay, it considers the as-built/actual effect of the CE on the remaining Work at the time of the event, i.e. with the benefit of hindsight.

A fully retrospective analysis is also possible, but it diverges further from NEC methodology and typically would increase the risk of dispute.

A purely prospective NEC assessment made long after the event (approach 1) is often criticised for producing results inconsistent with known facts. In practice, adopting a pragmatic approach that incorporates actual progress and as‑built information (approaches2 and 3) is more realistic and better aligned with industry guidance.

Accordingly, approaches 2 and 3 are more likely to succeed when retrospectively assessing the time impact of CE’s, as they attempt to ‘bridge the gap’ applying the method of assessment as per clause 63.3 (or clause 63.5 on NEC4), but updating to reflect known progress, events and using as-built CE information known after the event.

In practice, navigating these complexities requires a balanced, evidence‑led approach that respects the NEC’s prospective intent while recognising the value of real‑world data when assessing delay and entitlement. As demonstrated, approaches that blend contemporaneous programme logic with as‑built insight are far more likely to withstand scrutiny and deliver outcomes grounded in reality.

At Pyments, we specialise in exactly this, bringing technical clarity, rigorous programme analysis, and expert judgement to help clients resolve compensation events confidently and credibly, whether assessed contemporaneously or long after the fact. If you want pragmatic, defensible advice rooted in both contract and reality, we’re here to help.