The JCT 2024 Editions: A Breakdown of Key Changes for Design and Build Contracts
The construction industry eagerly awaited the arrival of the 2024 JCT editions, and yesterday, the wait was over! While only the Design and Build (D&B) suite has been released so far, it brings a wave of significant changes that construction professionals should be aware of. This post provides a comprehensive overview of the key updates in the JCT 2024 D&B contract.
Streamlining and Standardisation:
Collaborative Working, Sustainability, and Dispute Notifications:
Previously optional through supplemental provisions, these aspects are now mandatory clauses. This standardizes the approach to these crucial areas and eliminates the need for separate agreements.
Adapting to Evolving Risks:
Expanded Relevant Event Grounds:
The contract now explicitly recognizes epidemics and broader applications of statutory powers as potential “Relevant Events” impacting project timelines and costs. This adaptation likely addresses concerns surrounding COVID-19 and future unforeseen circumstances.
Greater Transparency in Insurance and Communication:
Professional Indemnity Insurance:
The contract now allows for specifying exclusions in the contractor’s PI policy beyond pollution and contamination. This caters to the increasingly common fire-related exclusions found in such policies. Additionally, the obligation to maintain PI considers not just reasonable rates but also reasonable terms, reflecting the tightening nature of PI policies.
Email Communication:
Parties can opt for email communication as a valid channel for notices and communications. However, it’s an “all or nothing” approach, meaning specific exclusions for certain notices aren’t possible. Be aware that termination payment notices under clause 8.13 remain excluded from email communication.
Clarifications on Design Liability and Dispute Resolution
Fitness for Purpose:
A new clarification in clause 2.17.1.2 emphasizes that the contractor’s design liability is limited to exercising the required level of skill and care, not guaranteeing the design’s absolute fitness for purpose. However, this is subject to statutory requirements, so it’s not a complete liability release.
EOT Claims Decisions:
Decisions on Extension of Time (EOT) claims must now be made within eight weeks instead of the previous 12. Additionally, employers have a stricter 14-day window to request further information for substantiating EOT claims.
Addressing Termination and Subcontracts:
Liquidated Damages (LADs) and Termination:
The JCT has incorporated provisions addressing the LADs clause based on the Triple Point Technology case. This clarifies that LADs remain payable until project completion or contract termination, whichever comes first.
Automatic Termination of Sub-contracts:
The previous obligation for contractors to automatically terminate sub-contracts upon main contract termination has been adjusted. The change acknowledges beneficiary step-in rights commonly found in warranties and third-party rights agreements.
Expanded Risk Coverage:
Ground Conditions:
The contract now explicitly addresses the discovery of asbestos, contaminated materials, and unexploded ordnance (UXO) alongside existing provisions for antiquities. This expands the scope of potential “Relevant Events” and “Relevant Matters” triggering instructions and adjustments.
Other Notable Changes:
Insolvency Definition:
The definition of insolvency in clause 8.1 reflects recent changes in insolvency legislation.
Termination Payments:
A new clause outlines a specific timetable and process for payments following termination.
Fluctuations:
Fluctuations options are now separate downloadable documents available on the JCT website, along with model forms for Rights Particulars.
Gender Neutral Language:
The JCT has adopted gender-neutral language throughout the contract.
Building Safety Act 2022 (BSA):
While the JCT hasn’t made significant changes specific to the BSA, it establishes who the principal designer and contractor are within the duty holder regime. The general obligation for the contractor to comply with legislation remains. The JCT has produced a separate note on their approach to BSA compliance, acknowledging the need for additional provisions when using the JCT D&B for higher-risk building work.
Conclusion:
The JCT 2024 D&B contract brings a wave of changes, some streamlining processes and others adapting to evolving risks. Understanding these updates is crucial for construction professionals using this widely adopted contract. Remember, this is a high-level overview, and it’s always recommended to consult the full contract for detailed information and seek legal advice when necessary.
