The Joint Contracts Tribunal ("JCT") have commenced launching their suite of 2024 contracts starting off with the JCT Design & Build Contract ("DB Contract"). The JCT has built upon the 2016 version of the DB Contract, as opposed to a complete overhaul of the contents, with the main updates highlighted below:
Modernising and streamlining
The DB Contract now adopts gender neutral language, acknowledges that the Contract may be executed by means of electronic signature and permits notices to be sent by electronic means. There are now options in the Contract Particulars of the DB Contract for the Parties to include email addresses to allow the Parties to serve notices by email. Notices can only be given by email in relation to termination or to the Contractor in relation to third party rights and collateral warranties if an email address is specified for both Parties under 1.7.4.2 of the Contract Particulars. Any other notice under the Contract can be given by notice if an email address is listed for the recipient under 1.7.3 of the Contract Particulars or to such other email address as the recipient may notify to the sender from time to time.
Collaborative working
A new article has been included in the DB Contract which requires the Parties to work 'in a co-operative and collaborative manner, in good faith and in a spirit of trust and respect.' Collaborative working had previously been covered by the collaborative working supplementary provision which the Parties were free to choose whether it applied to the DB Contract in question or not.
Sustainability
The DB Contract includes another futureproofing amendment by way of a new clause that states the Contractor is 'encouraged to suggest economically viable amendments to the Works'. The Contractor is also required to provide all information that the Employer reasonably requests regarding the environmental impact of the supply and use of materials and goods selected by the Contractor.
Relevant Events and Relevant Matters
The DB Contract now stipulates that the Employer must request any further information as is reasonably necessary to enable it to reach a decision in relation to a notice of a delay to completion of the Works given by the Contractor not later than 14 days from receipt of such notice. In addition, the time period within which the Employer must assess an interim extension of time has been reduced to 8 weeks (from 12) from the later of: i) receipt of the Contractor's particulars or notification; or ii) the further information requested from the Contractor.
A new Relevant Event, which allows the Contractor to claim an extension of time in the event such events occur and cause delay to the completion of the Works beyond the Completion Date(s) for the Works or relevant Sections, has been added to cover epidemics.
The existing Relevant Event relating to the exercise after the Base Date by the UK Government or any Local Public Authority of any statutory power has been amended to cover any change in law, the exercise of any statutory power or the publication of any guidance by the UK Government, any local authority, or (in the case of guidance) the Construction Leadership Council. The clause referencing for this Relevant Event has also been updated, but this serves as a good opportunity for precedent schedule of amendments to the DB Contract to be reviewed and updated.
The existing Relevant Event for antiquities has also been broadened to allow the Contractor to claim additional time due to the discovery of any unexploded ordnance or unforeseen contaminated material and asbestos on the site and compliance with the Employer's instructions in relation to any of these matters.
The Relevant Matters have also been updated to cover the events outlined above. The only notable difference is that the relevant matters for: a) epidemics; and b) the occurrence after the Base Date of: i) a change in law; ii) the exercise of a statutory power; or iii) the publication of any guidance by the UK Government, any local authority, or (in the case of guidance) the Construction Leadership Council are options in the Contract Particulars of the DB Contract and the Parties will have to select whether these Relevant Matters are applicable.
The definition of 'Statutory Undertaker' has been amended to 'Statutory Provider'. The amendment to the definition has been made to capture and recognise that private contractors often carry out the relevant works (rather than just the local authority or statutory undertakers) and the amendment to 'any person' may also possibly capture others.
Design responsibility and Contractor's liability
The standard of care in relation to design has been amended to the reasonable skill and care expected of a qualified and experience architect as oppose to just an architect previously. The DB Contract now includes an express exclusion of any fitness for purpose liability, but only to the extent permitted by Statutory Requirements.
A footnote has been included in the DB Contract which states the Parties may wish to agree an overall cap on the Contractor's liabilities. The DB Contract also refers the Parties to a model clause in the JCT's Design and Build Contract Guide.
Insurance
A new provision has been added to state that, when Insurance Option A applies, any reinstatement work will be treated as a Change but only for the purposes of the applicable Relevant Event. This means the Contractor may be entitled to claim an extension of time for any reinstatement work but not additional loss or expense.
Building Safety Act
The JCT has provided guidance on compliance with the Building Safety Act in its Building Safety Act guidance note. However, the JCT has not provided any specific amendments for higher risk buildings in the update to the DB Contract. The reason cited by the JCT panel at the JCT's launch event for the 2024 version of the DB Contract was that higher risk buildings were only one type of project they hoped the DB Contract would be used for and including specific provisions would not be appropriate for a generic contract to be used across a wide range of projects. Therefore, if any Works include works to a higher risk building, the Parties will need to consider what provisions need to be incorporated into the DB Contract to deal with issues such as the gateway regime, the golden thread of information and mandatory occurrence reporting requirements.
The JCT has expressly provided for the new Principal Designer and Principal Contractor roles that were introduced by the new Part 2A of the Building Regulations. The DB Contract includes a new Article which allows the Parties to stipulate which parties will be carrying out the roles of Principal Designer and Principal Contractor for the purposes of the Building Regulations. There are also new obligations on the Contractor to comply with the relevant duties of the Principal Designer and Principal Contractor under the Building Regulations should they be nominated to perform these roles under the DB Contract.
Termination and liquidated damages
The DB Contract termination provisions have been updated to allow either party to terminate the Contractor's employment under the Contract if the works have been suspended for the period stated in the Contract Particulars due to: a) an epidemic; or b) the occurrence after the Base Date of: i) a change in law; ii) the exercise of a statutory power; or iii) the publication of any guidance by the UK Government, any local authority, or (in the case of guidance) the Construction Leadership Council. The definition of 'Insolvent' has also been updated to capture the two additional insolvency events brought into force by the Corporate Insolvency and Governance Act 2020.
The DB Contract has also added a detailed provision dealing with payment upon termination of the Contractor's employment under the D&B Contract however arising to make express provision for the payment notices required by the Housing Grants, Construction and Regeneration Act 1996. These provisions clearly set out when: i) the Termination Payment becomes due, ii) the payment notice must be served by the Employer; iii) the final date for payment will be; and iv) the date on which a pay less notice has to be served by the Employer.
The liquidated damages provisions have been amended to make it clear that liquidated damages will only apply up to the date of termination of the Contractor's employment under the DB Contract. This is without prejudice to and not in substitution of any other rights and remedies of the Employer under the Contract arising from termination. This position reflects the Supreme Court's judgment in the Triple Point case.
Summary
The JCT have taken steps to: i) modernise the DB Contract and as they say "futureproof it"; ii) introduce drafting to cover recent specific latest case law and legislative developments over the last eight years; iii) cater for recent world events such as the Covid-19 pandemic; and iv) provide drafting to cover common unforeseen project risks such as the discovery of unexploded ordnance or unforeseen contaminated material and asbestos on the site.
