JCT Design & Build 2024 – more evolution than revolution

Introduction

On 17 April 2024, the Joints Contracts Tribunal (JCT) published its new Design and Build 2024 (‘JCT D&B 2024’) and Design and Build Sub-Contract 2024 forms of contract; the first of the new 2024 suite of contracts to be released. 

The changes are not a major re-write of the 2016 form (indeed, JCT specifically states in the Guide that it does not consider that any of the 2024 amendments will materially affect risk allocation in practice). Employers will continue to make similar amendments to the 2024 form as they already do to the 2016. For instance, the 2024 form continues to provide that the contractor is not responsible for design contained in the Employer’s Requirements; a fundamental driver of why employers elect to procure works using a design and build contract. 

That said, there are a number of changes which are noteworthy and the key ones are summarised below.  

Extensions of time/loss and expense

Perhaps the most significant of the changes are to the extension of time (Relevant Events) and loss and/or expense (Relevant Matters) provisions.

Ground Risk

One of the notable omissions of the JCT D&B (and other JCT forms of contract, save for the Major Projects form) is in relation to ground risk. The JCT D&B 2024 form extends the antiquities Relevant Event to include delay caused by the discovery of asbestos, contaminated material and UXOs and also adds an optional Relevant Matter in relation to these risks. 

Given the position at law is that a contractor bears the entire ground risk, this does constitute a shift in favour of the contractor. However, in our experience, concerns over ground conditions tend to centre around whether the contractor is able to accurately price/programme for them based on the survey information made available. The updates do not fully address this. Asbestos, contaminated materials and UXOs are not the only potentially problematic ground conditions and it seems likely that contractors will continue to seek carve outs where they are not comfortable with the extent or accuracy of the survey information. 

An alternative and possibly preferable approach could have been along the lines of the JCT 2016 Major Projects form which includes an optional extension of time provision for ground conditions which are not reasonably foreseeable by a contractor as at the Base Date. 

Epidemics and changes in legislation

A new Relevant Event has been included to deal with epidemics where such an event limits the availability of labour or securing goods, materials or services. In addition, the exercise of statutory powers Relevant Event has been widened to include changes in legislation and the publication of guidance by the UK Government, local or public authority or the Construction Leadership Council. Again, these are included as optional Relevant Matters.

The inclusion of an epidemics Relevant Event should prove uncontroversial (at least where they are not present at the base date) given that epidemics are likely to fall under the force majeure Relevant Event and many parties have already been agreeing similar provisions. However, the extension of the statutory powers Relevant Events may cause some concern amongst employers. There is no foreseeability caveat meaning no incentive for contractors to allow for changes which are known to be coming into play. Moreover, the addition of guidance is broad and it will include guidance which may not have legal force.  This is, admittedly, a difficult issue. One imagines this is to address recent experiences during Covid with the lack of clarity surrounding whether guidance was required to be complied with by the construction industry.  

The inclusion of additional Relevant Matters for epidemics and changes in legislation/guidance/exercise of statutory power (albeit optional) are likely to be resisted by employers who will view these as off-market and that, at most, these risks ought to be shared. 

Timing of EOT assessments

The period in which the employer is to notify the contractor of an extension of time assessment has been reduced from 12 to 8 weeks. In addition, the employer only has a limited window (just 14 days) in order to request information from the contractor in order to make the assessment. 

JCT has stated that the intention is to have a set timetable and to speed up the process for resolution of extension of time claims and/or for disputes to crystallise. It accepts that these are not conditions precedent and that there are no express consequences for failing to adhere to the timetable. It therefore remains to be seen whether the updates will have the desired effect.

On a related note, JCT has not provided clarification over whether the drafting of clauses 4.19 and 4.20 are intended to make the contractor notice requirements under clause 4.20 a condition precedent to recovery of loss and/or expense. This is something of a missed opportunity with the issue being a common ground for argument in time/money disputes. The point was considered in the recent Scottish case of Fes Limited v HFD Construction Group Limited which found that the clauses did constitute a condition precedent. JCT has confirmed that it has considered the case but that it was only reported after the 2024 contract had gone to print.   

Building Safety Act 2022 changes

JCT has adopted a very light touch approach in relation to the Building Safety Act 2022. The changes are limited to the inclusion of Articles to set out who the principal designer and principal contractor will be for the purposes of the duty holder regime and to include express obligations on the contractor to comply with certain of its dutyholder obligations. This is essentially the same approach JCT adopts with the CDM Regulations.

There are no provisions dealing with the new regulatory regime for Higher-Risk Buildings nor for extending the limitation period (and obligation to maintain professional indemnity insurance) for claims under the Defective Premises Act 1972 or a breach of Building Regulations 2010. This is something of a disappointment for those hoping that JCT would take the opportunity to provide some market guidance here. It will be down to the parties to include the required complex drafting to address these changes. 

Cap on liability

JCT has chosen not to include an overall cap on liability in the contract but has provided optional drafting in the accompanying guide. This is a fairly significant shift and may embolden contractors seeking to include an overall cap on liability as standard, something which will, no doubt, prove to be a key point of negotiation.  

Contractor design obligations

The contractor’s design obligation has been amended to make clear that, in relation to design, the contractor shall have no greater duty than the exercise of reasonable skill and care and to specifically exclude any fitness for purpose obligation in relation to design. This is a very common amendment to the 2016 forms sought by contractors concerned about an MT Højgaard type scenario (where the courts found that an absolute obligation took priority over the obligation to exercise reasonable skill and care in design). To that end, contractors will be happy that JCT has included such a provision as standard.   

Good faith and collaborative working

The ‘Collaborative Working’ provision which was previously optional in the 2016 form is now promoted to a mandatory article. This requires the parties to work together ‘in a co-operative and collaborative manner, in good faith and in a spirit of trust and respect’. The language is very similar to clauses 10.1/10.2 in the NEC suite of contracts. 

In a similar vein, the parties are under an obligation to notify to other of matters that appear likely to give rise to a dispute or difference. The respective senior executives are then to meet as soon as practicable for direct, good faith negotiations to resolve the matter. This is, of course, without prejudice to the right to adjudicate to at any time.

Whilst it is tempting to dismiss the good faith obligation as aspirational but without any substance, the various authorities dealing with the equivalent provision in the NEC suite of contracts suggest this may not necessarily be the case. In view of this, it will be interesting to see whether parties are comfortable retaining the new article or if they opt to remove in the interests of certainty. For employers, they may have concerns around how deleting a good faith obligation would be viewed in the market. 

Summary thoughts

Overall, for those making the switch to the 2024 suite of JCT contracts, users may be relieved that they will not be grappling with a fundamentally different contract, particularly in the midst of all of the legislative changes currently working their way through the construction industry.

That said, users may feel that JCT has erred on the side of caution and passed up the opportunity to shape the market in relation to the Building Safety Act 2022, particularly when it comes to regulatory regime around Higher Risk Buildings (‘HRBs’). JCT has (rightly) stated that HRBs are just one type of project and that therefore they felt addressing the regime would not be appropriate on a widely used form of contract. Maybe so, but one cannot help but feel that users would have benefitted from some guidance in this area, perhaps by way of optional provisions. 

Next in line for the 2024 update will be the Minor Works Contract, due to land on 15 May 2024.