JCT 2024: What's new?
After an eagerly anticipated build-up, the waiting is over. JCT has published the new JCT Design & Build Contract 2024.
We have summarised the key changes below:
1. Building Regulations
A new Article 7 has been included, which requires the parties to confirm who the Principal Designer and Principal Contractor will be for the purposes of the amended Building Regulations.
2. Epidemics and Statutory Powers
In light of the COVID-19 pandemic, a new Relevant Event has been added, allowing the contractor to claim an extension of time if there is an “epidemic”.
The Relevant Event relating to the UK Government exercising its statutory powers has been widened to include “the publication of any guidance” by the UK Government, Local Authorities, etc. and also specifically the Construction Leadership Council. No doubt this addition has been influenced by the COVID-19 pandemic when the government published numerous guidance notes throughout this period.
The above Relevant Events are also Relevant Matters, which may entitle the Contractor to additional money, albeit they are now dealt with as optional entries within the contract particulars.
3. Insolvency
The definition of ‘Insolvent’ has been expanded to cover developments in insolvency law.
4. Ground Conditions
Provisions have been introduced so that, as well as antiquities, the Employer takes the risk for asbestos, contaminated material and unexploded ordnance found in the ground.
5. Timescales for responding to an extension of time
The existing 12-week timescale for the Employer to respond to the Contractor’s extension of time claim has been reduced to 8 weeks.
In addition, the Employer has 14 days to notify the Contractor of such further information as is reasonably necessary to reach a decision on the proposed extensions of time.
6. Collaborative Working, Sustainable Development and Notification of Disputes
New provisions relating to collaborative working, sustainability and notification of disputes, which were previously optional supplemental provisions, have now been introduced into the main body of the JCT terms.
Like the NEC, a new article has been included, which provides that the parties must work together and with the project team in a cooperative and collaborative manner, in good faith and in a spirit of trust and respect.
In addition, the Contractor is encouraged to suggest economically viable amendments to the works to improve environmental performance and sustainability, as well as a reduction in environmental impact.
7. Notices by email
Notices can be sent by email to the relevant email address identified by the parties in the contract particulars.
8. Termination payment
The new JCT has introduced a new defined term, “Termination Payment”, which, together with some new clauses in the termination section, provides a more structured approach to the final payment when a contract is terminated.
9. Professional Indemnity Insurance
The Contract Particulars now include a space which allows you to set out a PI insurance policy’s specific sub-limits and exclusions. Previously, any sub-limits related to pollution and contamination only, and you were not able to set out any specific exclusions.
This change reflects the evolving nature of the PI insurance market and how common exclusions, such as those relating to fire safety and cladding, are becoming.
10. Fitness for Purpose
There is a new provision that confirms that the Contractor owes no greater liability with respect to design than to exercise the required level of skill and care, and there is no requirement that any design is fit for its purpose.
11. Liquidated Damages
There are new provisions that make it clear that liquidated damages will be paid until all works have been completed or, if earlier when the contract is terminated.
12. Gender-neutral language
The JCT adopts gender-neutral language and has moved away from references to “he” and “workmen”.
Initial thoughts
Many of the above changes in the new JCT have been anticipated; however, perhaps surprisingly, the JCT does not directly address the Building Safety Act and the requirements relating to higher-risk buildings, as well as the potentially longer limitation periods for claims brought pursuant to the Defective Premises Act and the Building Act. Rather, the JCT expects parties to rely on the existing compliance with statutory requirements and provisions already included in the contract.
If there is a project that relates to a higher-risk building, parties should agree on specific provisions to be included in the contract that address the statutory requirements relating to higher-risk buildings.
JCT has only released the design and build form of contract, and we expect the remaining suite of contracts to be released over the coming months on a piecemeal basis. There will, therefore, be a transition period during which the 2016 versions of the JCT will continue to be used – as such, parties should, at the very least, be introducing amendments to ensure it deals with the appointment of a Building Regulations Principal Contractor and Principal Designer for the purposes of the Building Regulations.
For more information on the above changes, or if you have any questions on construction law in general, please contact Kieran Woonton at [email protected] or 0191 211 7820.