International Construction Law Review
SOME THOUGHTS ON NEC3
HUMPHREY LLOYD1
Introduction
The Engineering and Construction Contract (ECC) is increasingly and successfully used, not just in the United Kingdom but also in other countries. It started life in consultative form in 1991. The First Edition of the New Engineering Contract was published in 19932 and a Second Edition in 1995, when it became the ECC. However it is commonly known as the NEC. In 2005 the Third Edition of the contract was published (and reissued with some small amendments in June 2006). (I shall use ECC and NEC3 interchangeably; the latter is more prominent.) The advent of NEC3 is an opportunity to look at aspects of the contract. This article arises out of an invitation by the NEC Panel on the Institution of Civil Engineers to provide some comments on whether there are likely to be any intrinsic or other legal difficulties in using NEC3, primarily outside the United Kingdom.3 In a nutshell I came to the conclusions that there are no real difficulties (with one possible exception—clause 63.5) but that there are some points to look out for. However, as will become apparent, most of the points are peripheral. Some may regard them as legalistic nit-picking. If so, that perhaps reinforces the view of users that NEC3 does not contain any significant features that would make it unwise to use it outside the United Kingdom in its present form (but nit-pickers have to be considered for countries where the law is thought to be the epitome of commonsense, a view not usually held in the construction industry, unless someone has been a victor). There are however some areas where the intentions of its proponents and current users need to be spelled out so that the NEC will continue to be a basic but comprehensive set of documents which do not require reference to any national law to make them explicable and practical.
At the outset I have to “declare an interest”—I have always been a fan of the ECC, and I had less difficulty than most with the style of its original drafting. As someone who started practice in construction law at the time of the publication of the Banwell Report in 1964,4 the NEC seemed to me to be exactly what the UK construction industry required, a view shared later by Sir Michael Latham. Although the group of forms was devised by civil engineers it has always been suited to use in building and other sectors of the industry. There was a need for forms that could be used as widely as the
1 The author is one of the Editors-in-Chief of The International Construction Law Review.
2 See Barnes, “The New Engineering Contract” [1991] ICLR 247.
3 The views expressed in this article are the author’s own and not those of the NEC panel or of the ICE. The author is grateful to members of the NEC panel and others for their observations on earlier versions.
4 The Placing and Management of Contracts for Building and Civil Engineering Work (HMSO, 1964). Such was its importance that it had to be reprinted three years later.
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Some Thoughts on NEC3
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