FIDIC’s 2017 editions introduced a new Claims management system in clause 20 that channels Claims through two very different procedures. One of them is very simple and involves almost no risk whereas the other will require investment of significant project resources, will take the parties a considerable amount of time to resolve and carries fatal consequences if not followed properly. It has therefore become a priority for anyone handling this Claims management system to understand how clause 20.1 sorts the different types of Claims and to recognise that the classification scheme is not as straightforward as the wording of the Contract suggests, as explored in this article.
The main changes: Employer’s consent and neutrality The main changes in Clause 3 are the express provisions in Sub-Clause 3.2 [Engineer’s Duties and Authority] that the Engineer is not required to obtain the Employer’s consent before the Engineer exercises its authority under Sub-Clause 3.7 [Agreement or Determination], and that the Engineer must act “neutrally” when exercising its duties under Sub-Clause 3.7 [Agreement or Determination]. Dictionary definitions suggest that “neutrally” is similar in meaning to the words “independently” or “impartially” found in the FIDIC Red Book 4th edition and the FIDIC Yellow Book 3rd edition. However, the drafting committee believe that by using a different word it will avoid the difficulties raised in the interpretation of independently or impartially in the earlier editions. This remains to be seen. The intention is that “the Engineer treats both Parties even-handedly, in a fair minded and unbiased manner”.