JCT changes: tinkering around the edges or an important refocus?

David Lukic is a planning and construction solicitor at Weightmans

The construction sector operates in a very different environment now to the one that existed just a few years ago, with significant changes to construction law and the lasting economic hangover caused by the pandemic, rapid inflation and the impact on supply chains due to the war in Ukraine among other factors.

“The consequence of these seemingly aesthetic alterations is that contractors could find themselves liable for more costs than they had planned for”

It was high time the Joint Contracts Tribunal (JCT)’s design and build contract – the standard contract template used for most construction projects in the UK that hadn’t been updated since 2016 – got a refresh.

When the 2024 edition of the contract landed, many in the industry were hopeful of a significant upgrade in how it addressed the balance of responsibility between contractor and developer, and that it would reflect the very different landscape facing construction parties today.

Upon review, it is fair to say that this is not, for the most part, what was delivered. The changes published by the JCT are more of a tinkering around the edges than a real shift in policy, and many will be disappointed by the limited scope of the updates.

Encouraging collaborative working

If anything, the new publication represents a change in emphasis, rather than process. None of the amendments are significant in their own right, but added together they represent a clear change in expectation from the JCT – it wants contractors and developers to be more collaborative in finding solutions to problems, rather than simply defining and exercising their own legal rights.

Most obviously, the new template mandates more collaborative working and environmental standards, upgrading these requirements from the optional (albeit default) clauses present in the 2016 edition. A new provision in the main contract explicitly states that parties must work “in a cooperative and collaborative manner, in good faith and in a spirit of mutual trust and respect”. The contract also encourages contractors to propose economically viable changes to the project that have a sustainability benefit.

But the emphasis on cooperation permeates further than just these explicit clauses. For example, under a revised set of building regulations, projects with multiple contractors must appoint a ‘principal contractor’ and ‘principal designer’.

This gives one entity holistic responsibility for the building safety requirements of the project and will necessitate them coordinating between all involved parties. Previously, these roles could be occupied by separate bodies, leaving no single organisation with overall accountability and no incentive to engage with other parties and ensure their work is up to code.

Changing contractors’ level of responsibility

There is a smattering of other changes in the new contract that alter, if only slightly, the scope of contractors’ responsibilities.

The 2024 edition changes the term ‘statutory undertaker’ to ‘statutory provider’. Previously the definition referred specifically to local authorities and businesses such as utilities and telecoms companies that might have enhanced rights to impose requirements on a landowner or contractor. This may seem semantic but it means the variety of entities this term could refer to has become much broader – in the contract’s own words: “Any person executing work solely in pursuance of its statutory obligations.”

What constitutes a statutory obligation has similarly become less specific and could, for instance, refer to any provider of tech services that will be connected to the site once construction is completed.

The consequence of these seemingly aesthetic alterations is that contractors could find themselves liable for more costs than they had planned for. This is because the design and build contract also obligates contractors to cover any fees or charges related to a now expanded set of statutory requirements.

Tinkering around the edges

For the most part, the changes to the design and build contract are skin deep. Construction industry stakeholders will be disappointed that the 2024 edition does not address more of their concerns or the challenges faced by the sector.

However, contractors and developers alike must not overlook what the updated publication says about how the JCT wants construction projects to be managed in the future.

Adapting now to a more collaborative and holistic approach to project management will be to the benefit of the industry as a whole. It will also put construction firms in a better position to adjust to change in future iterations of the build and design contract.

Source link

About The Author

Scroll to Top