California private works · Effective January 1, 2026
SB 440 starts the clock.
Project Neutral® helps owners, contractors, and counsel turn disputed change orders into executable decisions—before statutory deadlines turn a project problem into formal proceedings.
What changed
A dispute process with real deadlines.
California Civil Code § 8850 now creates a time-bound claim and payment framework for qualifying private construction contracts entered into on or after January 1, 2026. It covers claims involving time extensions, extra work, and disputed payment.
The framework moves from written claim, to written response, to an informal conference, and then to nonbinding mediation before litigation or arbitration. The process keeps moving even when the project team is not ready for it.
A claim must be sent by registered or certified mail, return receipt requested, to start the statutory process.
The statutory path
From claim to formal proceedings.
Timing can shift by written agreement and by the facts of a particular claim. This is the practical sequence, not a substitute for legal advice.
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Day 0
Written claim
The claimant serves a documented demand by registered or certified mail, return receipt requested.
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Within 30 days
Owner response
The owner identifies the disputed and undisputed portions in writing.
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If disputed
Meet and confer
The claimant may demand an informal conference; the owner schedules it within 30 days.
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If still unresolved
Nonbinding mediation
The disputed balance proceeds to mediation. This is where a properly structured ENE can fit.
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If mediation fails
Formal proceedings
The matter moves to the contract's dispute process, litigation, or another remedy available by law.
Where Project Neutral® fits
Two paths. One useful written outcome.
The Early Neutral Evaluation is a focused, 21-day intervention led by an independent senior construction executive.
Resolve before statutory mediation
Run the ENE in parallel with the SB 440 timetable. The neutral tests the record, assesses likely outcomes, and gives decision-makers a disciplined basis for settlement while the project is still moving.
Best outcome: a signed change order before mediation is called.
Structure the engagement as mediation
When counsel and the parties structure it appropriately, the same methodology can operate within the mandatory mediation step—adding a written evaluation and draft change-order language to the settlement process.
Best outcome: terms the project team can execute, not just discuss.
The 21-day deliverable
Built for a decision—not another round of position papers.
The parties retain their legal rights. The evaluation gives principals a concise, privileged record they can actually use to resolve the claim.
- Independent assessment of the claim's factual and commercial merits
- Reasoned range of likely outcomes if the matter proceeds
- Clear treatment of disputed and undisputed components
- Draft change-order language ready for review and execution
Common questions
Clear answers before the clock gets louder.
Is the ENE binding?
No—unless the parties expressly agree otherwise. The evaluation is advisory. Each party keeps the right to proceed to mediation, arbitration, litigation, or another remedy available under its contract and applicable law.
Can it satisfy the SB 440 mediation requirement?
It can be structured as the mediation engagement when the parties and counsel agree. It can also be used earlier as a separate assessment designed to resolve the claim before statutory mediation is needed. Counsel should confirm the structure for the specific dispute.
What makes the process different?
The focus is on a usable written outcome. A senior construction neutral evaluates the record, frames a realistic decision range, and prepares draft change-order language—on a defined 21-day schedule.
How is confidentiality addressed?
The engagement is designed to operate under mediation privilege, with privilege protocols applied to interviews and written work product. The agreement and process should be reviewed by counsel for the matter at hand.
Active claim?
Map the clock before it maps the dispute for you.
Tell us where the claim stands. We will help determine whether a 21-day ENE fits the moment.