JCT changes to cover bombs, asbestos and epidemics

Contractors will be able to claim an extension of time and costs if asbestos or unexploded bombs are unexpectedly found during a design-and-build job, under new changes to the JCT contract.

The Joint Contracts Tribunal (JCT) yesterday (17 April) published a new edition of a standards document for design-and-build contracts, as the first part of its 2024 Edition of Contracts.

Clause 3.15 – which previously covered only fossils, antiquities and other objects of interest found on the site – now extends to the discovery of asbestos, contaminated material and unexploded ordnance.

Another clause will now allow claims for delay caused by epidemics, after the industry’s experiences during the Covid pandemic.

“Our first impression is that the changes certainly bring JCT 2024 up to date with current law and industry trends,” said Rachel Heald, partner at law firm Hawkswell Kilvington.

“It is also interesting that despite various clauses being routinely amended by employers, JCT has chosen not to bow to market practice and amend them.”

“Contractors will welcome many of these changes, which grant them additional protection.

“However, we suspect that some in the industry will have been hoping for more detailed drafting around Building Safety Act considerations, particularly for higher-risk buildings.”

Announcing the release yesterday of Design and Build Contract (DB 2024), the JCT said that the new standards reflect substantial changes in the construction industry since the previous 2016 edition.

A new Article 3 strengthens the requirement for clients and contractors to work cooperatively and collaboratively, in good faith and with a spirit of mutual trust and respect.

This was only a supplemental provision in JCT’s 2016 edition.

By making it mandatory, the 2024 edition places greater emphasis on the parties’ behaviour in a similar way to NEC4 contracts, Heald said.

Other new features in DB 2024 include identification of the principal designer and principal contractor under Part 2A of the Building Regulations.

Another clause addresses compliance with both the Construction Design and Management Regulations and Part 2A of the Building Regulations.

Chris Hallam, partner at law firm CMS, told Construction News that DB 2024 was more of an evolution than a revolution”.

He said there was “little in the new form to deal with the requirements and duties coming out of the Building Safety Act – save for a general requirement to comply.

“No doubt the JCT drafting committee are waiting to see what direction the market takes with this before going into print in a later update or amendment to the JCT form.”

Heald pointed to DB 2024’s lack of reference to the new 15-year limitation period for claims under the Defective Premises Act or for breach of the Building Regulations.

“These claims are brought under statute, so it is technically not necessary to mention them in the contract terms, but in practice it is starting to become common to mention this extended 15-year limitation period in contracts,” she said.

“I wonder if the drafting committee might have considered perhaps amending the entry in the contract.

“Particulars specifying the period for which professional indemnity insurance needs to be maintained, to allow this to be stated as 15 years rather than six or 12, but ultimately it remains unchanged in the new edition.”

DB 2024 also does not specifically mention the rule that work on HRBs cannot progress until the Building Safety Regular grants gateway two approval, Heald said.

“For projects involving HRBs, I am starting to see bespoke clauses included to deal with these issues,” said Heald.

“However, I expect JCT has taken the view that the general obligation to comply with statutory requirements adequately covers the requirement to comply with all aspects of the HRB legislation.”

Members of the JCT’s drafting subcommittee, including chair Victoria Peckett, partner at law firm Clyde & Co, will provide more information on DB 2024 at a launch event on 1 May.

Other elements of JCT 2024 are yet to be released. Natalie Taylor, associate at law firm Blake Morgan, said: “We do not anticipate there being many surprises within the remainder of the suite, but look forward to reviewing the promised Target Cost Contract.

“This form of contract is new to the JCT suite, and will be JCT’s alternative to the NEC Option C contract.”

Hallam said that it remained to be seen whether the Target Cost Contract “becomes a challenger” to Option C, “but in principle it is a welcome addition to the JCT stable”.

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