Weather risk under NEC4 contracts: suggestions for a fairer approach

Key Points

• NEC4 ECC currently defines a weather compensation event as a ‘once in ten years’ event in a calendar month (clause 60.1(13)).
• The examples given in the contract data are limited to cumulative rainfall, days of rainfall over 5 mm, freezing temperatures or snow days recorded at an agreed weather station.
• This article suggests using upfront agreed activity thresholds, hyperlocal data, activity-based measurement, expanded variables and frequently updated datasets to improve fairness and clarity in NEC weather risk management.

The NEC4 suite of contracts has become the gold standard for collaborative construction contracting, promoting fairness, flexibility and clear risk allocation. However, the way that the NEC4 Engineering and Construction Contract (ECC) currently handles weather-related risk through its ‘once-in-ten-year’ event clause (Clause 60.1(13)) is starting to look out of step with today’s climate realities.

As extreme weather events become more frequent and severe, NEC users should consider adapting NEC’s standard weather provisions.

NEC’s current weather clause

Under NEC, weather is a compensation event if measurements within a calendar month, at a stated location, exceed historical once-in-ten-year averages. The examples given in the contract data are cumulative rainfall, days of rainfall over 5 mm, freezing temperatures or snow days. Others can be selected by the client to suit the location and the project. Contractors facing such events are entitled to time extensions and, depending on contract specifics, additional costs.

While designed to be objective, the current framework creates practical challenges. For example, severe events straddling two months may not trigger thresholds, even if they cause major disruption, and weather stations may be many kilometres from project sites, leading to recorded conditions that do not reflect reality. Also, key risks like wind, heatwaves not included in the contract data, despite their growing impact on construction. Furthermore, even if thresholds are exceeded, contractors must still prove the event caused delay, a subjective and potentially adversarial process.

As such contractors can face disputes under the current system. Monthly thresholds may mask short but intense events, measurement points can be distant and weather impacts may vary dramatically by activity type. For example, while a concrete pour is not affected in the same way as a tower crane lift, NEC treats them under the same limited variables. The result can be costly documentation battles and negotiations that undermine NEC’s spirit of collaboration.

Climate volatility

The scale of weather disruption in construction is rising rapidly. A 2021 study by Shuldt et al. found that 45% of projects experienced weather-related delays, while Aggreko’s 2024 survey of 853 construction managers across Europe revealed that 93% faced significant delays in the last year due to weather.

Extreme events are not only more frequent but also more severe: heatwaves dry soils and disrupt earthworks, wind increasingly halts lifting operations and flash flooding creates unpredictable hazards. NEC’s starting point of possible weather measurements and project teams’ reliance on delayed datasets may no longer be sufficient.

NEC has always been about fairness, clarity and collaboration. To uphold these principles in today’s climate, its weather clauses could benefit from being modernised. The following sections discuss five practical adaptations that NEC users can make in order of impact.

Activity-level thresholds

At present, even when a threshold is breached, the contractor must prove that weather caused delay to planned completion. This subjective test can create disputes and add to administration.

Contracts should therefore include a pre-agreed baseline matrix of standard construction activities (such as concrete pours, crane lifts and roofing) and the weather variables that affect them. Each project only requires minor adjustments to this standard baseline, rather than a bespoke set-up every time. Variances from the baseline can be assessed by the client to understand how much more or less risk is being transferred.

By agreeing thresholds up front, causation is effectively preset. If an activity’s agreed tolerance is exceeded during its scheduled duration, the impact is recognised without further debate. This approach reduces disputes, improves clarity and better aligns NEC with collaborative working.

It is interesting to note that in the NEC4 Engineering and Construction Short Contract (ECSC), the weather threshold is based on the number full days lost due to any type of weather equalling one seventh of the total number of days between the starting and completion dates.

Hyperlocal and agreed data sources

NEC projects often rely on distant weather stations (such as Heathrow for London projects), which may not reflect actual site conditions. This can introduce unfairness and disputes.

Parties should agree in contract data part one to use ‘hyperlocal’ datasets, from on-site weather stations, dense sensor networks or high-resolution satellite feeds. The chosen source should be transparent, regularly updated and accessible to both parties.

This will ensure that weather measurements reflect what actually happened on the project, not 30 km away. It will build confidence and reduce conflict by ensuring both client and contractor are working from a shared and realistic dataset.

Activity-based time measurements

Calendar months are arbitrary, cutting through weather events and disconnecting measurement from project schedules.

Instead, measurement periods should follow the duration of scheduled activities. If a once-in-ten-year event occurs during an activity’s planned window, its impact is automatically recognised. Monthly or quarterly reviews can still be used for reporting and payment, but no longer as the measurement basis.

This approach will ensure that weather measurement is directly tied to the programme, not an arbitrary calendar. It transforms weather into a shared risk, managed transparently and collaboratively, rather than an after-the-fact battleground.

Expanded variables

Today’s most disruptive weather often involves heat, wind or flooding, none of which are included under NEC’s standard contract data.

Contracts should include variables such as high temperatures, high winds, flooding and lightning to by default, or selected based on project relevance. Thresholds should be set by activity, such as wind speeds linked to lifting operations and heat and UV thresholds linked to worker welfare and productivity.

This will make contracts more reflective of modern project risk. It will also ensure that weather-sensitive operations are properly covered, reducing the chance of projects being unfairly exposed to unmanageable events.

Frequently updated datasets

The reliance of many NEC projects on outdated or slowly refreshed historical datasets risks unfairly shifting risk. If baselines do not capture recent extreme events, one party can be left carrying more exposure than intended.

Weather baselines should be updated on a monthly or quarterly basis. Parties should agree that the latest available datasets will be used for threshold comparison. This will ensure the once-in-ten-years principle remains realistic, reflecting the most up-to-date conditions. It prevents the ‘moving goalposts’ problem where one party benefits and the other suffers simply because data was not refreshed in time.

An alternative would be to increase the weather measurement threshold to say once in 25 years but, given the greater risk this would place on contractors, it would likely lead to higher tender prices. So, embedding a smarter clause and greater modelling capability will let the parties decide on the measure with a better understanding of the true outcome.

Case study

Construction firm BAM has begun working with clients to integrate more sophisticated weather datasets into its contracts. By agreeing up front on activity-specific thresholds and hyperlocal data sources, BAM and its clients share a clear, objective baseline for weather risk.

The initiative has delivered: faster agreement on compensation events, since causation is pre-agreed; improved scheduling certainty, reducing wasted resource allocation; and fewer disputes, with both parties aligned on the data source and measurement rules.

Crucially, this integration happens at the contract stage, in contract data part one, ensuring fairness is built into the project before work begins.

Conclusion

Weather volatility is now an unavoidable reality in construction. NEC’s current framework, designed with good intentions, may lead to unfairness and disputes if not adapted to the changing world of weather we now face.

By adopting upfront agreed activity thresholds, hyperlocal data, activity-based measurement, expanded variables and frequently updated datasets, NEC users can restore fairness and clarity to weather risk management.

This is not just about entitlement – it is about preparedness and risk management. Agreeing thresholds and data sources in advance will reduce in-flight project issues, freeing project teams and stakeholders to focus on solving real problems together rather than fighting contractual battles.

For NEC to remain the industry benchmark in collaborative contracting, it should be adapted alongside our changing climate. Doing so will safeguard projects, reduce disputes and strengthen the collaborative ethos at the heart of NEC.