JCT Contracts

JCT contracts get a major overhaul 

The Joint Contracts Tribunal (JCT) has published a set of construction contracts which are referred to as The JCT 2024 Edition of Contracts.

These are being hailed as a significant improvement because they introduce many of the emerging issues in the UK construction industry. They are therefore expected to streamline project delivery and offer better risk management for all parties involved. These updates are crucial for clients, project managers, contractors, architects, structural engineers, mechanical & electrical engineers, and other consultants, as it impacts the way construction projects are negotiated, executed, and completed.

They include an update to the Construction Playbook which aims to build better, faster, greener, and safer. This was introduced in 2020 and was updated in 2022. The Playbook refers to:

  • Collaborative working
  • Sustainability and environmental considerations
  • Notification and negotiation of disputes

Collaborative working is a key part of the contract, which makes it compulsory for modern working. It is defined as:

The parties shall work with each other and with other project team members in a cooperative and collaborative manner, in good faith and in a spirit of trust and respect. To that end, each shall support collaborative behaviour and address behaviour which is not collaborative.

New construction legislation

There have been many changes to the legislation for construction. These include:

  • Building Safety Act 2022 and Fire Safety Act – updated to accommodate Part 2A of the Building Regulations 2010. (This includes the duty holder regime under the Construction (Design and Management) Regulations.)
  • Construction Act 1996 – termination accounting and payment provisions are included in section 8.
  • Corporate insolvency and governance act 2020 – new insolvency grounds are added in section 8.
Sustainable development and environmental considerations

One of the standout features of the new JCT contracts is the enhanced focus on sustainability. With environmental concerns becoming increasingly critical, the JCT has introduced provisions that require parties to consider sustainability in their project planning and execution. This includes the use of sustainable materials, waste reduction practices, and energy-efficient construction methods. These provisions not only promote environmental actions but also potentially reduce the long-term operating costs of buildings.

  • Clause 2.2.5 – “The contractor is encouraged to support economically viable amendments to the works which, if instructed as a change, may result in an improvement in environmental performance and sustainability in the  carrying out the works or of the completed works, and a reduction in environmental impact, provided that no such instruction shall extend the contractor’s obligations in relation to design under this contract.”
  • Clause 2.2.2 – “the contractor shall provide to the employer all information that the employer reasonably requests regarding the environmental impact of the supply and use of materials and goods which should contract are selects”
Notification and negotiation of disputes

We can use the contract to ensure that projects are carried out effectively, minimising disputes and clarifying the roles and responsibilities of stakeholders. This is why we have clauses related to the collaborative working.

  • 9.1 – “This has now been moved – the wording has not changed – “with a view to avoidance or the early resolution of disputes or differences (subject to Article 8) each party shall promptly notify the other of any matter that appears likely to give rise to a dispute or difference. The senior executives nominated in the contract particulars (or if either is not available, a colleague of similar standing) shall meet as soon as practicable for direct, good faith negotiations to resolve the matter.”
Modernising and streamlining

There is a large number of items now included in JCT 2024, including:

  • Extensions of time and unforeseen conditions – Interim extension of time.  “The receiving party of the claim has 14 days for further information. The time period for making an extension time has been reduced. (Final extension of time can be done later).
  • Epidemics – Inclusion of drafting is included in the “relevant events”. This replaces the force majeure clauses.
  • Expanded reference to “Changes in law” in the relevant events.
  • Antiquities clauses have been expanded to include unexploded ordnance, contaminated materials, and asbestos.
  • Liabilities – there is additional reference to a standard of care in design.
  • Caps on liability – there is a general clause put forward for agreement. (This is not compulsory)
  • Language has been made gender neutral.
  • Fluctuation provisions are all online.
  • Communications – (Recognising the industry’s shift towards digitalisation, the JCT now mandates the use of electronic forms of communication and documentation throughout the project lifecycle. This shift aims to increase the efficiency of project management and reduce the likelihood of disputes related to miscommunication or documentation errors.)

In response to the industry’s feedback, the JCT has made significant improvements in the flexibility of contract terms. This includes customisable options that allow parties to tailor certain contract elements to better suit specific project requirements and risk profiles. Such flexibility is especially beneficial in complex projects where standard contract terms may not adequately address all potential scenarios.

The introduction of the new JCT contracts will have a broad impact on the UK construction industry. Not only are they are designed to reflect the current state of the industry, but also to anticipate future developments. By doing so, the JCT helps ensure that the legal framework governing construction projects remains robust, relevant, and responsive to the needs of all stakeholders.

For professionals involved in construction, understanding the nuances of these new contracts is crucial. In my experience, there is no better way of getting ready for the JCT Contracts than to read them line-by-line.

However, to go into them in depth, training, and consultation with legal experts in construction law are advisable to fully grasp the implications of these changes. Additionally, industry seminars and workshops on the new JCT contracts will likely become commonplace, as firms seek to update their practices in accordance with the latest standards.

In summary, the new JCT contract suite represents a progressive step towards more efficient, sustainable, and legally sound construction practices. Its impact will resonate throughout the industry, influencing how projects are planned, executed, and completed in the UK.

Written by Jeremy Sneddon, Managing Director

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