Clause 20.2.5 – the bridge from Claim to decision
From Notice & Fully Detailed Claim to an Engineer’s agreement or determination under Clause 3.7, and then into DAAB / arbitration if needed.
Watch how a Claim flows from Notice & Detailed Claim through Clause 3.7, into DAAB, and then arbitration if needed.
Clause 20.2.5 is the “bridge” between a Claim and a binding outcome: once the Contractor (or Employer) has given a proper Notice of Claim and then a Fully Detailed Claim, 20.2.5 tells the Engineer:
Now you must use Clause 3.7 to either help the Parties agree or issue a neutral determination within strict time limits.
1️⃣ Purpose of Clause 20.2.5 – Agreement or Determination of the Claim Core function
In the 📒 2017 Yellow Book, Clause 20.2.5 sits inside the structured claims procedure in 20.2 (for both Employer and Contractor claims). Its main purposes are:
To force “closure” on claims
No more claims disappearing into a black hole. Once a Fully Detailed Claim is submitted under 20.2.4, the Engineer is obliged to move into the Clause 3.7 “Agreement or Determination” procedure and reach an outcome within defined time limits.
To tie claims to money and time
The outcome under 20.2.5/3.7 (agreement or determination) then flows into payment certificates (Clause 14) and extensions of time (Clause 8.5), so the Claim actually changes the Contract position – not just sit in a letter file.
To link claims to disputes
If either Party is unhappy, 20.2.5 → 3.7 → 21.4 is the pipeline into the DAAB and ultimately arbitration. Claims, determinations, DAAB decisions and arbitration are now one continuous track.
- If you don’t follow 20.2.1–20.2.4 properly, you may lose rights (time-bars / evidence issues).
- If the Engineer doesn’t follow 20.2.5 / 3.7 properly, the Claim can turn into a Dispute that jumps to the DAAB with a “deemed rejection.”
3️⃣ Key Interpretations and Practical Implications
How Clause 20.2.5 reshapes the Engineer’s role, enforces time limits, balances Employer and Contractor claims, and fixes the 1999 “claims black hole”.
This section focuses on how 20.2.5 works in practice: the Engineer’s neutral hat, the new time discipline on determinations, the symmetry between Employer and Contractor claims, and the jump from the 📘 1999 Yellow Book’s “black hole” world to the structured 📒 2017 regime.
Key interpretations – in practice From contract text to project reality
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🧭 A. The Engineer’s “neutral” hat matters
3.7 explicitly says the Engineer acts neutrally when agreeing or determining.
So under 20.2.5:
- The Engineer is no longer “just” the Employer’s agent giving instructions.
- They are a quasi-adjudicator at “claims” level – required to be fair to both Parties.
Can it be interpreted that a one-sided or obviously biased determination is contrary to 3.7/20.2.5?
👉 Yes, that’s a fair argument: the Engineer is contractually obliged to act as a neutral decision-maker at this stage, and a seriously biased determination may itself be a breach of contract (though remedy is usually via DAAB/arbitration rather than a separate claim). -
💣 B. Time limits – no more endless waiting
Between 20.2.5 and 3.7.3, FIDIC 2017 introduces a clock on Engineer action:
- The Engineer must consult and determine within agreed time periods (default 42 days each stage unless modified).
- If they do nothing, the Claim is deemed rejected, which pushes it into Dispute territory and allows DAAB referral.
For the Contractor, this is huge:
- No more being stuck with a claim that the Engineer will “look into later”.
- You can escalate once the time limits expire.
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⚖️ C. Symmetry: Employer and Contractor Claims
All of 20.2 (including 20.2.5) applies to:
- Employer’s Claims and
- Contractor’s Claims
…so Employers also must:
- Give Notices for their claims (e.g., delay damages, cost recovery).
- Submit detailed information.
- Accept that the Engineer’s determination can go against them and still be binding unless they issue a NOD.
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🔄 D. 1999 vs 2017 – what changed?
In the 📘 1999 Yellow Book:
- Contractor’s claims were under Clause 20.1 and moved through a much thinner Clause 3.5 determination process.
- Time limits for Engineer’s response were looser and less enforceable.
- No DAAB-by-default, and weaker link between claims and disputes.
In the 📒 2017 Yellow Book:
- Claims procedure is more structured and symmetrical (20.1 & 20.2).
- 20.2.5 + 3.7 + 21 form a clear pipeline: Claim → Agreement/Determination → DAAB → Arbitration.
- Time limits and deemed rejection mechanisms are much clearer.
So 20.2.5 is one of the “missing pieces” that 2017 adds to fix 1999’s “black hole” problems.
How to use these interpretations on a live project Checklist
- Engineer’s role: Ask “Is the Engineer wearing the neutral hat?” when you receive a 3.7 determination.
- Time limits: Diary the 3.7 windows from the date your Fully Detailed Claim is acknowledged.
- Symmetry: Apply the same 20.2 discipline to Employer claims (delay damages, corrections, etc.).
- 1999 vs 2017: Don’t assume old habits still apply – check which edition governs your project.
4️⃣ Cross-References & 5️⃣ “What if…?” Scenarios
See where 20.2.5 “plugs in” across the Yellow Book, and walk through three big real-world scenarios that test how the pipeline Claim → 3.7 → DAAB actually works.
Clause 20.2.5 doesn’t live in isolation. It sits at the crossroads of definitions, notices, the 3.7 agreement/determination engine, payment, EOT and DAAB disputes. The table and scenarios below show how that “network” behaves in real projects.
4️⃣ Cross-References – How 20.2.5 interacts with other Clauses Big-picture map
Here’s how 20.2.5 sits inside the bigger ecosystem:
| Area | Clause | Interaction with 20.2.5 |
|---|---|---|
| Definition of Claim | 1.1.5 & 20.1 | Defines what a “Claim” is and which events go into 20.2. |
| Notice & details | 20.2.1–20.2.4 | Preconditions; if weak or late, the Claim may be time-barred or undermined. |
| Agreement / determination engine | 3.7 | Procedure that 20.2.5 explicitly triggers (consultation → determination → binding status). |
| Continuing effect | 20.2.6 | For ongoing impacts, the Engineer may have to revisit or adjust previous determinations as further interim / final detailed claims arrive. |
| General requirements | 20.2.7 | Record-keeping, cooperation, and other behavioural obligations; if breached, they can affect the weight of the Claim. |
| Payment | 14.6 & 14.7 | Financial effect of agreement/determination must be reflected in IPCs and payments. |
| EOT | 8.5 | Time impact decided under 20.2.5/3.7 modifies the Time for Completion. |
| DAAB & disputes | 21.4 & 21.6 | If a NOD is given or if there’s a deemed rejection, the Claim becomes a Dispute for DAAB/arbitration. |
5️⃣ “What if…?” Scenarios
Three typical project stories that show how 20.2.5 behaves when something goes wrong – site access, Engineer silence, and continuing-effect changes in law.
Employer gives access to Site 2 months late.
- Contractor sends Notice of Claim (20.2.1) within 28 days of realising the delay.
- Contractor keeps detailed records of idle resources, extra prelims, etc. (20.2.3 contemporary records).
- Within the agreed period (say 84 days), Contractor submits a Fully Detailed Claim (20.2.4) with:
- Narrative of events
- Critical path analysis showing delay
- Cost build-ups for prolongation overheads
Now 20.2.5 kicks in:
- Engineer must apply 3.7:
- Tries to facilitate agreement (e.g., “I think 30 days EOT and X amount of Cost is fair – can you both agree?”).
- If no agreement, Engineer issues a determination: e.g. 20 days EOT + partial Cost.
If the Contractor thinks this is unfair:
- Contractor issues a NOD within 28 days (3.7.5).
- The contested parts of the determination go to the DAAB under 21.4.
If the Contractor accepts or fails to issue a NOD:
- The determination becomes final and binding and gets built into Time for Completion and payment.
Same facts as Scenario 1, but now:
- Engineer does nothing after receiving the Fully Detailed Claim.
Under 3.7.3, if the Engineer fails to give a determination within the relevant time limit:
- The Claim is treated as deemed rejected (for a Claim).
- This means the Contractor can treat it as a Dispute and refer it directly to the DAAB (subject to the steps in 21.4), even though there is no written determination.
Imagine a change in law that increases labour costs over 3 years:
- Contractor gives Notice of Claim when the law changes.
- Submits an initial Fully Detailed Claim for Year 1.
- Engineer deals with that Year 1 Claim under 20.2.5/3.7 and issues a determination.
For Years 2 and 3:
- Contractor submits further interim / final Fully Detailed Claims under 20.2.6, each of which can again trigger the Engineer’s duties under 20.2.5.
- Each claim results in its own agreement/determination, and each can be separately challenged or accepted.
6️⃣ Suggestions for Clarity & Improvement in Particular Conditions
Practical tweaks you can build into the Particular Conditions around 20.2.5 and 3.7 – while still respecting the FIDIC Golden Principles and keeping the claims system workable.
If you’re drafting Particular Conditions, you can gently tune how 20.2.5 behaves without breaking the standard form: confirm timelines, force real claim meetings, allow partial determinations, link outcomes to the Programme, and smooth the handover into the DAAB phase.
Targeted tweaks you can write into the PCs
These ideas assume you keep the core structure of 20.2 and 3.7, but add clarity, timelines and discipline around the Engineer’s role.
Confirm or adapt the 42-day periods in 3.7.3 for:
- Agreement attempt
- Determination
In complex EPC or design–build projects, consider:
- Slightly longer periods for complex quantum or delay analysis, but
- Shorter periods for pure valuation issues (e.g., simple re-measurement).
You can strengthen 3.7.1 consultation via a PC linked to 20.2.5:
Require the Engineer to:
- Call a Claim workshop within X days after receiving the Fully Detailed Claim.
- Circulate an agenda and issues list in advance.
- Record agreed facts vs disputed facts, and agreed vs disputed quantum.
Add a clarification that the Engineer may issue partial determinations:
- Decide EOT first (to keep the programme realistic).
- Decide Cost in a later determination when more data is available.
Each partial determination still follows 3.7 and can be:
- Paid / implemented, and
- Subject to its own NOD / DAAB track.
To avoid gaps between claims and planning, add a requirement that after any determination affecting Time for Completion:
- The Contractor must submit an updated Programme (8.3) reflecting the EOT within X days.
- The Engineer must review this promptly.
While 21.4 already handles DAAB referrals, PCs can ask the Engineer to:
- Identify in the determination which parts are purely factual, legal, or valuation.
- Provide a consolidated claims dossier (contemporary records index, key correspondence list, factual chronology) to be used if the matter goes to the DAAB.