FIDIC 2017 Red Book: Overview and Comparison with 1999

The Fdration Internationale des Ingnieurs-Conseils (FIDIC) contracts are the international standard for construction and engineering projects. Among its suite of contracts, the "Red Book" is arguably the most famous. officially titled the Conditions of Contract for Construction, it is designed for building and engineering works where the Employer provides the design.

In December 2017, FIDIC released a second edition of its flagship contracts, replacing the 1999 editions. This update introduced significant changes aimed at reducing ambiguity, clarifying roles, and ensuring disputes are resolved more efficiently. This page provides a brief overview of the FIDIC 2017 Red Book and compares it with its predecessor, the 1999 edition.

Overview of the FIDIC 2017 Red Book

The FIDIC 2017 Red Book is intended for use where the Employer or his Engineer is responsible for the design, and the Contractor constructs the works. The risk allocation generally follows the principle that the Contractor bears the risk of constructing the works, while the Employer bears the risk of the design and force majeure events.

Key Characteristics of the 2017 Edition

• Clearer Definitions: The 2017 edition expands and clarifies definitions to reduce the likelihood of semantic disputes during the project.
• Partnership Approach: There is a stronger emphasis on cooperation between the parties. The contracts encourage early warning mechanisms and collaborative problem-solving.
• Advanced Dispute Resolution: The dispute resolution mechanism has been overhauled to avoid disputes escalating to arbitration or litigation unnecessarily.
• Strict Time Bar: The 2017 form is much stricter regarding notices. Failure to submit a notice within the stipulated time can result in the loss of the right to claim.

Comparison: FIDIC 2017 vs. FIDIC 1999

While the fundamental structure of the Red Book remains familiar to users of the 1999 edition, the 2017 version contains over 30 substantive changes. Below are the most critical areas of divergence.

1. Dispute Resolution Mechanism

The most significant structural change is the renaming of the DAB (Dispute Adjudication Board) to the DAAB (Dispute Avoidance/Adjudication Board).

• FIDIC 1999: Disputes were referred to the DAB primarily after they had arisen. The process was reactive.
• FIDIC 2017: The insertion of "Avoidance" into the title is deliberate. The new contract empowers the parties to request the DAAB to assist in avoiding a dispute before it becomes a formal dispute. The DAAB can issue informal decisions or recommendations to help parties settle issues amicably. Furthermore, the time limits for challenging a DAAB decision in arbitration have been shortened (from 184 days in 1999 to 28 days in 2017), requiring parties to act quickly.

2. Employers Claims and Payment Certificates

The 1999 Red Book was often criticized for being vague regarding how the Employer could claim money back from the Contractor (e.g., for damaged goods or liquidated damages). The 2017 edition addresses this imbalance.

• FIDIC 1999: There was no formal mechanism for the Employer to issue a "Payment Certificate" for deductions; the Engineer simply deducted amounts from the contractor's interim payments. The process for notifying the Contractor of these deductions was not strictly defined.
• FIDIC 2017: A separate Sub-Clause 2.5 titled Employers Claims is introduced. It mirrors the Contractors claims process. The Engineer must now issue a detailed "Notice of Determination" within 42 days. If the Engineer fails to do so, the Employer cannot recover the amount. This creates a transparent and time-barred process for financial claims flowing from the Employer to the Contractor.

3. Time Bars and Notices

The 2017 edition is far more rigorous regarding compliance with time limits, adhering to the principle that "time is of the essence" for contractual notices.

• FIDIC 1999: While time bars existed (e.g., 28 days to claim an extension of time), courts and tribunals sometimes interpreted these flexibly if the other party had not been prejudiced by the delay.
• FIDIC 2017: The contract explicitly states that failure to comply with a time bar results in a permanent waiver of the right. This is intended to bring finality to obligations and prevent "ambush" claims at the end of a project based on old issues. Sub-Clause 20.2 is particularly strict, requiring the Contractor to submit a fully detailed claim within 84 days (extended from 42 in 1999), or risk losing the entitlement.

4. The Role of the Engineer

The Engineers role has been refined to ensure impartiality and clarity in instructions.

• FIDIC 1999: The Engineer was required to act "impartially" when determining certain matters, but their duties regarding the Employer were sometimes seen as ambiguous regarding liability for their own determinations.
• FIDIC 2017: The role is clarified in Sub-Clause 3.5. The Engineer must act neutrally between the parties when evaluating claims. Furthermore, the 2017 form introduces the concept that the Engineer is not liable for the consequences of any determination unless they acted in bad faith or fraudulently. This provides the Engineer with some protection, encouraging them to make decisions without fear of constant lawsuit.

5. Unforeseeable Physical Conditions

Risk allocation regarding ground conditions has been tweaked.

• FIDIC 1999: Under Sub-Clause 4.12, the Contractor was entitled to payment if they encountered physical conditions that were "unforeseeable" by a skilled contractor.
• FIDIC 2017: The test for "unforeseeable" is now measured based on the data specifically provided in the Tender Documents, rather than general experience. If the Employer provides insufficient site investigation data, the risk shifts more heavily to the Employer. This incentivizes Employers to provide comprehensive geotechnical data at the tender stage.

6. Indemnities and Insurance

Insurance provisions in the 1999 books were criticized for being difficult to operate in practice, particularly regarding the "insured value" and coverage for joint names.

• FIDIC 1999: Insurance arrangements were often misaligned with the risk allocation, leading to gaps in coverage.
• FIDIC 2017: The insurance clauses have been completely rewritten. They are designed to be more practical and compliant with modern insurance markets. Minimum levels of insurance are more clearly defined, and the duty to insure is now strict, meaning failure to insure can be a fundamental breach of contract.

Summary Table of Key Changes

Applied; but could be waived strictly in some jurisdictions

Strictly applied; non-compliance results in permanent waiver

Feature	FIDIC 1999 Red Book	FIDIC 2017 Red Book
Dispute Board	Dispute Adjudication Board (DAB)	Dispute Avoidance/Adjudication Board (DAAB)
Employer's Claims	Informal deductions; no specific mechanism	Dedicated Sub-Clause 2.5; formal Notice of Determination required
Time Bars
Engineer's Role	Impartiality required in certain decisions	Clarified neutrality; defined liability limits for Engineer
Partnership	Adversarial undertone	Emphasis on cooperation and Early Warning

Conclusion

The FIDIC 2017 Red Book represents a maturation of the principles established in the 1999 edition. By introducing stricter time bars, balancing the claims process for both Employer and Contractor, and emphasizing dispute avoidance rather than just adjudication, the 2017 edition aims to deliver a more predictable and fair project execution environment. While the 1999 Red Book remains in use on legacy projects, the 2017 edition is the recommended choice for new international construction contracts seeking clarity, partnership, and risk mitigation.