When FIDIC published the 2017 Second Edition of the Red Book, one of the most notable developments was the new regime for claims. For the first time, Employers and Contractors were placed on equal footing, with a common procedure governing both sides’ entitlements.
Then and Now
- 1999 Red Book: Contractors were subject to stringent requirements for notifying and substantiating claims under Clause 20.1. Employers, by contrast, relied on a separate procedure under Clause 2.5, which was less onerous and often criticised as unbalanced.
- 2017 Red Book: The distinction has been removed. Clause 20.1 now defines a “Claim” broadly as any request by either Party for entitlement or relief under the Contract. Clause 20.2 prescribes the same procedure for Employer’s and Contractor’s claims as follows:
- Notice within 28 days of becoming aware (or when the party should reasonably have become aware) of the event or circumstance giving rise to the claim (Sub-Clause 20.2.1).
- Fully detailed claim within 84 days, including particulars of the factual and contractual basis, any extension of time sought, and the associated quantum (Sub-Clause 20.2.4).
- Engineer’s determination under Clause 3.7, following consultation with both parties, to reach either agreement or determination.
- Disputes are dealt with separately under Clause 21,
Practical Guidance
- For Employers: Treat your own claims (such as liquidated damages or set-offs) with the same rigour required of the Contractor. Establish internal claim management systems to monitor deadlines and supporting evidence, in line with Clause 20.2.
- For Contractors: Ensure strict compliance with their own obligations under Clause 20.2 when pursuing claims, as failure to give timely notice or proper substantiation may render their claims time-barred. At the same time, Employer claims may also be vulnerable if notices are late or defective and can be resisted under Sub-Clause 20.2.1 if non-compliance is established.
- For Both Parties: Engage constructively with the Engineer during the consultation process under Clause 3.7 to encourage early resolution and minimise escalation.
Concluding Remarks
The 2017 Red Book’s claims regime is not mere formality. It represents a deliberate move towards balanced risk allocation and predictable contract administration. Both Employers and Contractors must approach claims with equal diligence. In this environment, entitlement is preserved by compliance with the procedural requirements of Clause 20 and the Engineer’s impartial administration under Clause 3.7. For South Africa, where FIDIC 2017 is being slowly embedded into practice, this evolution signals a welcome shift towards greater fairness and certainty in contracting.