Regular users of JCT contracts will be well aware that the JCT has started to publish the 2024 editions of its contracts but for those less familiar with these documents we set out below a round-up of the key changes.
Background
The Joint Contracts Tribunal (JCT) was formed almost 100 years ago and has been publishing standard form contracts for use in construction projects ever since. Their contracts are widely used, being recognised as offering comprehensive and even-handed contract terms for all manner of projects, ranging from small domestic projects to major developments and everything in between. Adopting the standardised approach offered by the JCT’s documentation saves time and money when it comes to preparing and negotiating building contracts although care still needs to be taken, and bespoke amendments to the JCT’s standard terms may still be needed, to ensure the contract used meets the specifics of the particular project in question.
The JCT has a number of different “suites” or categories of contracts, but we tend to see their Design and Build Contract, their Intermediate Contracts and their Minor Works Contracts most frequently used.
The contracts are periodically updated, and this was last done in 2016. The JCT has begun publishing its 2024 editions, starting with the JCT Design and Build Contract 2024 and the Minor Works Contract 2024 (both published in May 2024), with more to follow in the year.
The changes in the JCT Design and Build Contract 2024 (JCT DB) include the following and we expect that similar changes will be made to the other contracts as they are released.
- Building Safety Act changes
One key area of changes addresses legislative changes introduced by the Building Safety Act 2022 which was brought in following the Grenfell Tower tragedy and is intended to improve the design, construction and management of higher-risk buildings.
The JCT DB now refers to Part 2A of the Building Regulations 2010 (which was introduced as a result of the Building Safety Act 2022) and the JCT has adopted a similar approach to the obligations of principal designer and principal contractor under the Building Regulations as it had previously taken in relation to thoes roles under the CDM Regulations 2015 (which are also concerned with health and safety matters).
Because JCT contracts are used for a wide range of projects – not all of which will be covered by the new legislation concerning higher-risk buildings – additional bespoke amendments may be needed in some situations. However, it is important to remember that whatever an individual contract provides in relation to the issue of building safety, this will only ever supplement and not replace the new obligations imposed by the legislation itself.
- Other legislative changes
Provisions dealing with payment following termination, and termination of the contract in the event of insolvency, have been included in the JCT DB to take account of the Corporate Insolvency and Governance Act 2020, and the impact which that has had on the Construction Act 1996.
- Modernisation
Some of the 2024 changes to the JCT DB could be classed as modernising the contract, for example:
- Provisions about collaborative working, sustainable development and environmental considerations are no longer treated as “optional” clauses but now form part of the main contract terms.
- Although a limitation of liability clause has not been incorporated within the 2024 terms, the JCT has provided a model clause and guidance on liability caps – in recognition of such provisions being increasingly negotiated by parties.
- In a nod to the times the JCT has also adopted gender neutral language (previously the parties – even when they were corporate organisations – were referred to in JCT contracts by the use of “he” “him” and “his”) and notices may be served under the contract using email.
- Exclusion of fitness for purpose
In recognition of the difficulty which fitness for purpose obligations can cause (in particular because of the impact they can have on the contractor’s insurance), the JCT DB now expressly excludes any warranty that the design of the project will be fit for purpose.
- Liquidated damages
A new clause has been included to take account of the decision in Triple Point Technology Inc v PTT Public Company Ltd in which the Supreme Court confirmed that the right for the employer to be paid liquidated damages – at the rate provided for in the contract – as compensation for the contractor’s delay applies only up to the date of termination of the contract. After that point the employer’s claim is for general (unquantified) damages.
- More time and more money?
Changes have been made to improve and speed up the procedure for granting extensions of time to the contractor’s timetable for the completing the works.
Amendments have been made to the list of “Relevant Events” upon which the contractor can rely to seek an extension of time (now covers asbestos and contaminated materials, epidemics and additional decisions under statutory powers).
Epidemics and decisions under statutory powers may also be selected by the parties as grounds for the contractor to be entitled to claim for additional loss and expense.
This is a very brief overview of the key changes but if you would like to know more, please contact the construction team at FSP.
