The Joint Contracts Tribunal (JCT) published its new Design and Build 2024 and Design and Build Sub-contract 2024 standard forms of contract on 17 April 2024 with much anticipation from across the sector.
We set out in further detail below some of the key changes made.
- Building Safety Act
The sector has been grappling with how best to deal with the monumental changes brought in by the Building Safety Act 2022 and, in particular, how best to manage the obligations surrounding the design and construction phase of the Higher-Risk Building regime.
The 2024 updates only cater for the dutyholder regime in that it provides for a new Article 7, setting out who the Principal Designer and Principal Contractor will be for the purposes of Part 2A of the Building Regulations 2010. A separate Article (Article 6) deals with the equivalent CDM roles.
Clause 3.16 has been extended to ensure that the relevant dutyholder obligations set out in Part 2A of the Building Regulations 2010 are complied with between the parties. This insertion now means that any failure to comply with those dutyholder requirements is also a contractor default event, meaning the employer could terminate the contract. These changes do not extend to works which are caught by the Higher-Risk Buildings regime. This means for those types of works, there is still the need to amend the 2024 form to cater for this.
- Relevant Events (Clause 2.26)
There are three key changes to the Relevant Events.
- New powers have been given to the Employer in relation to discoveries of asbestos, contaminated material and unexploded ordnance within new amended clause 3.15.3. These discoveries have now also been included as a Relevant Event within clause 2.26.4.
- A new Relevant Event dealing with epidemics where such an event limits the availability of labour or securing goods, materials or services, which has an impact on the progress of the works (clause 2.26.7).
- A widening of the Relevant Event dealing with statutory powers (2.26.8) to include two new limbs being:
- the passing of any new and amended laws; and
- the publication of any guidance by the UK Government or any local or public authority or any equivalent authority governed by public law or guidance by the Construction Leadership Council.
Those changes set out in points b. and c. above are also optional Relevant Matters at clause 4.21, meaning the Contractor would be entitled to potential loss and expense. However, this only applies if the corresponding section of the Contract Particulars has been completed.
- Extension of Time
Under the JCT 2016 D&B, an Employer had 12 weeks in which to make a decision in relation to any extension of time claim submitted by the Contractor. This period has been shortened in the 2024 D&B from 12 weeks to 8 weeks. The reasoning from JCT for this revised timescale is due, in part, to the tight timescales set out in the Construction Act 1996[1] for adjudicator’s decisions, together with recent guidance from industry bodies suggesting prompt assessment of applications for extensions of time were needed.
It will remain to be seen whether this timeframe is adopted, given that this amendment has reduced the length of time by a third.
- Termination
The termination provisions have been amended to make express provision for the payment and payment related notice requirements of the Construction Act.
There is a new definition inserted: ‘Termination Payment’. Whilst there are no changes to the principles for calculating the amounts due for termination (either by Employer at clause 8.7, or consequences for termination by the Contractor clause 8.12) there is now a due date for the Termination Payment, which is defined in each of clauses 8.7, 8.8 and 8.12. The Termination Payment due date is different in each clause, and so careful attention is required.
In addition, there is a new clause, 8.13, which caters for the final date for payment of the Termination Payment.
- Supplemental Provisions
As noted in the JCT D&B 2024 Guide as being part of the JCT’s response to key focusses within the industry and the Construction Playbook, three of the previously optional supplemental provisions have been drawn into the main body of the contract:
Collaborative working: There is a new Article 3 which draws through the optional supplemental provision in the 2016 D&B on collaborative working.
Sustainable development: There is a new clause 2.1.5, which mirrors the optional supplemental provision set out in the 2016 D&B and encourages the Contractor to “suggest economically viable amendments to the Works which…may result in an improvement in environmental performance and sustainability …and a reduction in environmental impact..”. Moving this from the supplemental provision to the conditions highlights the increasing necessity on contractors to consider environmental factors in their works.
Negotiation of disputes: the notification and negotiation of disputes provision in the supplemental provisions in the 2016 D&B has been moved to clause 9.1 in the 2024 D&B. Moving this from the supplemental provisions now means there is a greater emphasis on the parties to seek to negotiate and settle disputes.
- Fluctuations
The fluctuations options are no longer available in the 2024 edition and instead will be held centrally on the JCT website and can be downloaded for free.
- Language and Emails
Gender neutral language has been adopted throughout, removing references to ‘he’.
Notification provisions have also been updated to allow for notices to be sent by email, including those relating to default notices or termination, assuming the parties have specified this at clause 1.7.4.2 and in the relevant part of the Contract Particulars. We would always recommend that if the parties are to adopt this approach, that at least two email addresses are provided.
Some Initial Thoughts
- The changes are in line with those trailed, and it is the JCT’s stated view that they do not materially alter the risk allocation under this form.
- As mentioned above, those using the JCT D&B 2024 form for Higher-Risk Buildings will still need to grapple with and cater for, amongst other things, the Gateway signoffs and the production and storage of the Golden Thread information.
- Clause 2.24.4 now requires the Employer to notify the Contractor within 14 days if further information is required in order for the Employer to assess an extension of time claim. This is a an additional step in the process for Employers/Employer’s Agents and one which is subject to a fairly tight timeframe. It is notable that whilst reducing the assessment period, there has been no move to adopt any form of NEC-style time bar in respect of notification by the Contractor.
- The additional Relevant Events, in particular, clause 2.26.4 relating to ground risk, will require careful consideration by Employers.
- The Contract Particular entry for clause 6.15 (Professional Indemnity Insurance) provides for the inclusion of additional details such as exclusions to the policy cover. This change has likely been prompted by and is reflective of the tightening of the insurance market and the need for clarity as to the specific extent of the cover.
- Whilst the changes are on the whole specific and focussed, those updating their precedents and schedules of amendments should be aware that they have resulted in clause numbering changes and some re-ordering of provisions.
Further and more detailed thoughts to come!
[1] Housing Grants, Construction and Regeneration Act 1996
This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email enquiries@sharpepritchard.co.uk
