The new JCT 2024 edition of the Design and Build suite of contracts reflects the evolving construction landscape, addressing areas like the Building Safety Act 2022 (“BSA”) and the impact of recent events such as COVID-19.

The key changes that parties should be aware of are as follows:

Modernisation and Streamlining

• Gender-neutral language: The contract now utilises gender-neutral pronouns, reflecting a more inclusive approach.
• Electronic notices: Parties can agree to use email for all correspondence and notices, simplifying communication.
• Sustainability and environmental: The previous optional clauses have now been brought into the main conditions. The provisions allow for the Contractor to suggest changes to works that would benefit the environment and sustainability and puts an obligation on the Contractor to supply information regarding the environmental impact of goods and materials.
• Collaborative working: The new provision to “work with each other and with other project team members in a co-operative and collaborative manner, in good faith and in a spirit of trust and respect” was also previously an option clause but is now embodied within the main contract.

Building Safety Act 2022

The contract incorporates changes to comply with the BSA. However, its provisions are largely limited to the new dutyholder requirements:

• The contract requires the identification of the principal contractor and principal designer within the Articles.
• The requirement for the Employer to provide the Contractor with “building information” (under regulation 11A this is information relevant to the design or construction and about how compliance with the Building Regulations 2010 is achieved).
• Requirements for the Employer and Contractor to comply with their obligations under Part 2A of the Building Regulations 2010.

It will therefore still be necessary to account for detailed provisions within schedules of amendments in relation to higher risk buildings, where the BSA imposes further obligations such as the gateway regime and golden thread information requirements. Particular attention should be given as to who falls responsible in the event delays are caused by the gateway regime and Building Safety Regulator.

Fitness for purpose

Whilst the new contract includes a warranty that the Contractor will carry out the design with reasonable skill and care to be expected of a qualified and experienced architect, this is caveated by express wording that the Contractor is, under no circumstances, subject to a fitness for purpose obligation.

“Relevant Events” (Extensions of Time)

The definition of Relevant Events has been expanded to include discoveries of asbestos, contaminated materials or unexploded ordnance at the site; epidemics impacting labour or material availability; and changes in law affecting the works.

Notifications

The timeframe for responding to Extension of Time (EOT) claims has been reduced from 12 weeks to 8 weeks. The Employer must now request additional information to substantiate EOT claims within 14 days of receiving the claim.

“Relevant Matters” (Loss and Expense)

The Relevant Matters have also been updated to align with the Relevant Events, dealing with asbestos, contaminated land or unexploded ordnance at the site; epidemics; and change of law etc, and allowing the Contractor to claim for loss and expense of these risks. However the epidemics and change of law provisions are expressly identified as being optional within the Contract Particulars, with the default position being that they do not apply.

Liquidated Damages for Delay

Drafting has been added to clarify the position that the Employer is entitled to LADs in the event the contract is terminated up until the date of termination, thereafter general damages apply. A response to the decision in Triple Point Technology Inc v PTT Public Co Ltd [2021] UKSC 29.

Termination of sub-contracts

Clarification has been provided to ensure that automatic termination of subcontracts upon termination of the Contractor’s employment under the building contract is subject to any step-in rights contained in collateral warranties or third party rights.

Professional Indemnity Insurance

The Contract Particulars now allow for sub limits and specific exclusions, which reflects the current position of most Professional Indemnity policies.

Fluctuations

Fluctuation options are no longer included within the contract itself. Instead, they are available for download on the JCT website.

Corporate Insolvency and Governance Act 2020

The insolvency definition has been updated to reflect this Act and which impacts when a party may terminate.

Termination

The termination procedure, and the rules on termination accounting and payment terms have been updated and are revised to align with the Construction Act.

Two new grounds of termination for either party have been introduced where there are prolonged periods of suspension caused by epidemics and change of law.

Notification and Negotiation of Disputes

Each party is under an obligation to promptly notify the other of matters that appear likely to give rise to a dispute or difference. The senior executives nominated in the Contract Particulars shall meet as soon as practicable for direct, good faith negotiations to resolve the matter. This is without prejudice to the right to adjudicate to at any time.

The changes made in the 2024 edition of the JCT form are generally in line with practitioners’ and users’ expectations, dealing with some of the key issues that have arisen over recent years. It will be interesting to see if the “good faith” obligation causes a spike in disputes in the future as parties look to rely on a breach of that provision where other remedies are unavailable. It remains to be seen if some of these changes will become ‘market standard’ or whether contracts will be amended to remove any of the new provisions.

Parties using the updated JCT should still carefully consider and negotiate bespoke amendments to ensure that the contract effectively allocates risks and responsibilities in a manner that is appropriate for that project, and properly deals with any project specific issues.

How can we help?

We have extensive experience advising developers, contractors, specialist sub-contractors and consultants. We can help advise you on the new JCT 2024 to ensure the forms are utilised correctly and effectively.