"Out with the old, in with the new…JCT"
Following the introduction of the JCT Minor Works Contract 2016 over the summer, the JCT has now published the 2016 Edition of the JCT Design and Build Contract. These contracts replace the 2011 Editions and Emily Holdstock explains the key changes.
What is the JCT suite of contracts?
The Joint Contracts Tribunal ("JCT") publishes a suite of construction contracts which are widely used for construction projects undertaken within the UK.
The JCT publishes numerous forms of contract which cater for many different methods of procurement including:
- Design and build procurement;
- Standard procurement (with or without an element of contractor's design);
- Construction management; and
- Management contracting.
The JCT suite of contracts can be adapted for use on a full range of development projects from works to a family home to infrastructure projects and multi-million pound commercial, retail or leisure schemes.
Whichever JCT contract is selected, the terms of the JCT (including those in relation to programme, cost and quality of the works) are often amended to adjust the risk allocation between the employer and the contractor and to incorporate any client or project specific requirements.
What are the key changes?
Key changes made in the 2016 editions of the JCT Minor Works Contract and the JCT Design and Build Contract include the following:
- Updates to deal with the introduction of the Construction (Design and Management) Regulations 2015.
- The insurance provisions are more flexible. In particular, the JCT 2016 acknowledges that it is not necessarily the case that an employer will insure any existing structures. This change will be particularly relevant to clients who are carrying out works to an existing structure where a superior landlord maintains insurance of the building.
- Payment provisions have been re-drafted with the aim of simplifying their terms.
In addition, the JCT Design and Build Contract 2016 includes optional provisions which (when selected as applicable) require the contractor to procure a performance bond and/or a parent company guarantee in favour of the employer. This change is consistent with current practice on many projects where an employer will look to the contractor to provide either or both forms of security to the employer to safeguard against the risk of contractor insolvency, breach and/or non-performance.
Many other technical changes have been made to the JCT Minor Works Contract 2016 and the JCT Design and Build Contract 2016 and if you require further information, please contact us.
Can I still use the 2011 suite of JCT contracts?
Yes. It is likely that there will be a transitional period during which projects will be undertaken using both the 2011 and 2016 suite of JCT contracts whilst practitioners, contractors and the professional team become familiar with the 2016 suite of contracts.
When are the other JCT 2016 contracts due to be published?
We are not aware of any specific publication dates for the other JCT forms but anticipate that these will be published over the coming weeks and months.