CONSTRUCTION JOURNAL

What's new in the JCT 2024 Design and Build contract?

The first contract in the JCT 2024 suite sees numerous amendments from the previous edition to address emerging priorities and offer a more nuanced approach to traditional issues

Author:

  • Mark Pountney MRICS

19 June 2024

aerial view of a new housing estate being constructed in a disused quarry, UK

It has been eight years since the last edition of the JCT contract suite, in which time building safety and sustainability are among the concerns that have come to the fore.

In April, the JCT published the new JCT 2024 Design and Build (DB) contract, the first of its long-awaited suite of 2024 contracts, which addresses these and other issues.

Contract modernises language

The new suite uses gender-neutral language throughout, with phrases such as 'he shall' being replaced with 'it shall' and 'he may' with 'it may'. This brings it in line with other contracts such as NEC4.

The contract particulars now allow users to enter an email address for the service of notices.

This appears to be an all or nothing approach, though, as there is no option to specify which notices should be issued by email and which by post. Notices are all therefore to be served by the same means.

Practitioners using this contract should thus note the following.

  • Failing to include an email address for each party in the contract particulars means that service of notice by email will not be valid.
  • Serving notice by email does not mean immediate service, and it will be deemed to have been received on the next business day.

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Changes reflect new safety regime

The Building Safety Act 2022 introduced a new role of dutyholder in relation to the Building Regulations.

The JCT 2024 DB contract reflects this new regime with the following provisions.

  • A new Article 7 requires the Parties to identify the principal designer and principal contractor.
  • Clause 2.7.2 has been amended to require the employer to comply with Building Regulation 11A(4) and provide the contractor with building information, defined in the legislation as information held or obtainable by the client that is relevant to design or construction.
  • Clause 3.16 has been amended and now refers to Part 2A of the Building Regulations rather than the Construction (Design and Management) Regulations 2015, and requires the contractor to comply with its obligations in applicable dutyholder roles.

Amendments to the JCT 2024 DB contract are likely to be required for those working on a project in Wales, though, where the dutyholder role does not currently exist.

Clauses on relevant events and relevant matters amended

The JCT suite has traditionally listed the grounds for the contractor to claim an extension of time under relevant events, with loss and expense to be claimed separately under relevant matters.

However, the 2024 DB contract has been amended as follows.

  • Epidemic clauses have been added, so that when a disease outbreak causes delay by limiting the availability of labour or materials it can be claimed as a relevant event under clause 2.26.7 and the costs under relevant matter 4.21.6. It should be noted that the contract particulars must state that this relevant matter applies; if they do not, it could lead to a time extension being granted but no money.
  • The provision for changes in law has been amended under clause 2.26.8 and 4.21.7 to cover a wider range of situations, most notably the publication of guidance. Many arguments over COVID-19-related delay entitlement centred on government guidance not amounting to a change in law.

Employer obligations on assessing delay added

The suite introduces two obligations regarding the assessment of delay by the employer.

  • Clause 2.24.4 requires the employer to notify the contractor within 14 days of receiving the particulars or notification under clause 24.3 (material change in estimated delay period), that it requires further information to enable it to reach a decision.
  • Clause 2.25 has reduced the period that the employer has to notify the contractor of its decision to award an extension of time from 12 weeks to eight weeks. However, this does run from whichever is the later of the date of receipt for particulars or notifications, or the date that further information required under clause 2.24.4 is received.

Judgment prompts liquidated damages clarification

Following the Supreme Court's judgment in Triple Point Technology, Inc v PTT Public Company Ltd [2021] UKSC 29 – covered in a previous Construction Journal article – JCT has amended the liquidated damages clauses.

The new clause 2.29.5 clarifies the position regarding the employer's ability to deduct liquidated damages if the contract is terminated.

Damages will be recoverable until the works are completed or until the contract is terminated. Any losses after termination will need to form part of a general damages claim.

Fluctuations options moved online

In recent years inflation has had a significant impact on the construction industry in particular.

The JCT 2024 DB contract follows the 2016 edition by allowing the parties to choose which, if any, of the fluctuations options applies.

If none is selected, then option A applies by default.

It should be noted that the full text of the fluctuations options are no longer included in the contract but are to be downloaded from the JCT website.

The JCT 2016 DB schedule 7, fluctuations option A, has also been removed.

Definition of design liability finessed

The definition of 'fitness for purpose' has been clarified in clause 2.17. This now includes the following.

  • 'To the extent permitted by the Statutory Requirements, the Contractor shall have no greater duty, obligation or liability than to exercise reasonable skill and care.'
  • 'Under no circumstances shall the Contractor be subject to any duty, obligation or liability which requires that any such design shall be fit for purpose.'

It should be stressed that this is caveated by reference 'to the extent permitted by the Statutory Requirements'.

Risk allocation updated

The JCT 2016 DB contract includes provisions should the contractor discover fossils, antiquities or other objects of interest or value under clause 3.15.

These set out the requirements for both the contractor and employer if such discoveries are made, and for claiming them as relevant events and relevant matters.

The 2024 contract has expanded on this clause, and now covers asbestos, contaminated material and unexploded ordnance that may be found on the site or during excavations.

This change then flows through to the relevant event, in clause 2.26.4, and relevant matter, clause 4.21.3.

There is a clarification that no relief will be granted where the material was identified in the contract documents or has been brought on to the site by the contractor or any contractor's persons.

Sustainability now integrated not supplemental

What were supplemental provisions under the JCT 2016 DB contract have now been moved into the main contract, reflecting the increased importance of sustainability in business.

Clause 2.1.5 includes a provision entitling the contractor to suggest changes to the works that would benefit the environment.

The wording of the clause has been amended to cover sustainability and environmental impact, as well as environmental performance.

Likewise, clause 2.2.2 now includes the obligation to provide the employer with information regarding the environmental impact of the supply and use of materials and goods that the contractor selects to meet the employer's requirements.

Key revisions cover dispute settlements

Finally, there are a couple of important changes regarding the settlement of disputes.

  • Clause 9.1 on notification and negotiation of disputes has been added, requiring both parties to advise the other of any matter that appears likely to give rise to a dispute or difference. Senior executives nominated in the contract particulars must meet for 'direct, good faith negotiations to resolve the matter'.
  • The particulars relating to section 9 have also been amended, allowing the parties to name their own adjudicator-nominating body or arbitrator appointer. Reference to the Association of Independent Construction Adjudicators (AICA) has been removed from the list as well, given that it no longer exists.

While all these changes have been made in the JCT 2024 DB contract, similar amendments are likely in the other contracts in the suite that are due to be issued later this year.

Most notably, JCT has followed NEC and will be providing a new Target Cost Contract. It will be interesting to see how the JCT structures this.

Mark Pountney is a project director at Turner & Townsend contract services

Contact Mark: Email

Related competencies include: Legal/regulatory compliance, Procurement and contracts

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