James Huckstep looks at the new features included in the new edition of JCT’s Design and Build Contract – and what is missing.
In April, the Joint Contracts Tribunal (JCT) began the launch of a new edition of building contracts with the publication of its popular Design and Build suite, which includes a main contract, subcontract and guides to both forms.
In May, it will publish its new Minor Works Agreement and the remaining contracts will be published over the coming months. On the horizon is a new contract family, the JCT Target Cost Contract, comprising main contract, subcontract and guide.
JCT 2024 is the organisation’s fifth edition of contracts in a generation. In addition to looking at the new terms, each edition offers users the opportunity to re-evaluate their internal checks and update their procedures and precedent documents.
What is in the new building contracts?
The new Design and Build Contract (DB 24) contains some welcome features that provide clarity and improve the operation of some of the contract’s provisions. These include:
- Provision is made for the electronic execution of the contract and for notices and communications to be given by email.
- The contract includes a new ‘relevant event’ to cover epidemics and an expansion of the exercise of statutory powers relevant event. Both are also now listed as optional ‘relevant matters’ and can give rise to termination, by either party, in the event of a related continued period of suspension. The JCT has not stopped there and has also given contractors relief upon the discovery of asbestos, contaminated material, or unexploded ordnance (the extent of the presence of the same was not identified in the contract documents). Contractors will be pleased with these additions, which give them the ability to claim additional time and money.
- DB 24 includes streamlined notification procedures, but employers and their agents will need to be on their toes in dealing with applications for relevant events, as the JCT now gives employers less time to notify contractors of a response to a claim (eight weeks instead of 12).
- In the termination clauses, the definition of “insolvent” has been expanded to include the grounds of insolvency that were created by the Corporate Insolvency and Governance Act 2020 (the moratorium and restructuring plan) and the termination accounting and payment provisions have also been amended to reflect the requirements of the Construction Act (a due date for the final payment after termination has been added).
Additional features
Other features of DB 24 include:
- Changes to the Contractor’s design liability wording and associated duty of care (including a new exclusion for the Contractor’s liability for fitness for purpose in design). In addition, a new footnote has been added into the contract, which states that the parties may wish to agree an overall cap on the Contractor’s liability. This is the first time the JCT has suggested an overall cap on liability.
- Changes to the liquidated damages provisions to reflect the decision of the Supreme Court in Triple Point Technology Inc v PTT Public Company Ltd (2021): DB 24 now provides that the liquidated damages clauses apply up to the termination of the contract, but not thereafter.
- In addition, the JCT has made three previously optional supplemental provisions mandatory (“the JCT’s response to the Construction Playbook”) – the clauses relating to collaborative working, sustainable development and the notification and negotiation of disputes.
- Finally, Fluctuation Option A has been taken out of the contract altogether and uploaded to the JCT’s website. If no option is selected in the Contract Particulars, Option A will apply by default.
What is missing?
DB 24 is light on detail concerning building safety matters under the Building Safety Act 2022 (BSA) and the Procurement Act 2023 (PA). Both Acts are landmark legislation which all participants in construction projects need to understand and navigate.
In relation to the PA, parties will need to consider the requirements in the context of public sector contracts. The BSA ushered in the biggest swathe of regulation affecting the construction industry since the Building Act 1984.
DB 24 expands the CDM Regulations clause to address the dutyholder roles under Part 2A of the Building Regulations 2010. It does not, however, deal with the various regimes that form part of the new Building Control framework for higher-risk buildings (HRBs) in England (the ‘gateways’, the ‘golden thread of information’, ‘mandatory occurrence reporting’) or the extended limitation periods that apply to new and revamped causes of action under the BSA.
Developments that include HRBs will require updated agreements with robust provisions built in, with supplemental schedules and supplementary checklists designed to help the parties surmount the new mountain of regulation. Building contracts, appointments and related documentation will need to be revisited to ensure that building and fire safety matters are dealt with fully and comprehensively.
James Huckstep is a partner at Trowers & Hamlins.
