On 17 April 2024, the Joint Contracts Tribunal (JCT) published its:
- Design and Build Contract 2024 (DB 2024); and
- Design and Build Subcontract 2024 (DBSub 2024).
These are the first in the long-awaited JCT 2024 suite of contracts which is also expected to include a new Target Cost Contract, with a matching sub-contract and guide.
The DB 2024 and DBSub 2024 are not wholesale revisions of the existing JCT 2016 contracts, and the JCT has stated in its Guides to the 2024 contracts that it does not consider any of the amendments or changes in format will in practice materially affect risk allocation.
We look at some of the key changes in the DB 2024 below.
Key changes
Modernisation
Among other things, the DB 2024 has been modernised to allow for the majority of notices to be sent by email. Key notices, i.e. those relating to default / termination which are governed by clause 1.7.4 may also be sent by email — but only if the parties 'opt in'.
The new form also makes provisions for contracts to be signed electronically and uses gender-neutral language throughout.
Extensions of time
The extension of time provisions have been revised and include alterations to the timetable and procedures for dealing with extensions of time. In particular, the period for the Employer to notify its decision on interim extensions of time has been reduced from 12 to 8 weeks.
The corresponding period at sub-contract level has also been shortened in the DBSub 2024 from 16 to 10 weeks.
The JCT notes that this reflects recent guidance from industry bodies encouraging the prompt assessment of applications for an extension of time and the tight timetable set out in the Housing Grants, Construction and Regeneration Act 1996 (the Construction Act 1996) for adjudicator’s decisions.
New / expanded Relevant Events and Relevant Matters
There is a new Relevant Event covering epidemics and an expanded Relevant Event covering the exercise of statutory powers and changes in law directly affecting the works. These Relevant Events are also listed as optional Relevant Matters, with the Contract Particulars including optional additional grounds for the contractor to claim loss and expense. Each of these Relevant Matters will apply only where this is stated in the relevant entry in the Contract Particulars.
"Statutory Undertakers" have also been renamed as "Statutory Providers".
The antiquities provision has also been expanded to include the discovery of asbestos, contaminated material and unexploded ordnance and there has been a corresponding broadening of the related Relevant Event.
Building Safety Act
Basic provisions have been added dealing with the new dutyholder requirements under Part 2A of the Building Regulations 2010, which were introduced as part of the suite of measures under the Building Safety Act 2022.
A new Article 7 details who is to be appointed as principal designer and principal contractor for the purpose of the Building Regulations, and amendments to clause 3.16 (which previously dealt with the CDM Regulations only) add obligations on both the Employer and the Contractor to comply with their respective duties as set out in Part 2A of the Building Regulations. Failure to comply with clause 3.16 remains a specific and mutual ground for termination by the 'innocent' party.
There is also an obligation on the Employer to supply any 'building information' required to be provided to the Contractor under regulation 11A(4) of the Building Regulations.
The amendments do not specifically address issues particular to higher-risk building projects, and further advice should be taken in respect of the specific requirements and approach to risk allocation when procuring such projects.
Payment provisions on termination
The termination provisions have been amended to make express provision for the payment and payment-related notice requirements of the Construction Act.
Broadly speaking, the amendments fall into three categories:
- minor adjustments to the termination accounting provisions in clauses 8.7 and 8.8 (Termination by Employer) and 8.12 (Consequences of termination by the Contractor) although the principles for calculating the amounts due remain unchanged;
- the due date for the "Termination Payment" – a newly defined term – is specified in each of these clauses; and
- there is a new clause 8.13, which addresses the final date for payment of the Termination Payment, payment-related notices and the amount to be paid.
Collaborative working and good faith
The DB 2024 incorporates in new Article 3 what was previously an optional supplemental provision relating to collaborative working. This requires parties to "work with each other and with other project team members in a co-operative and collaborative manner, in good faith and in a spirit of trust and respect".
Whilst a greater focus on collaborative working is a positive development, both employers and contractors are likely to have questions about what this provision means for them in practice.
Two other previously optional supplemental provisions have been incorporated into the main provisions. The JCT states that these are a reflection of key industry focus areas, and part of its response to the Construction Playbook (which we have previously commented on in our insights in May 2021 and October 2022):
- Sustainable development and environmental considerations: there is a new general obligation which encourages the Contractor to "suggest economically viable amendments to the Works which, if instructed as a Change, may result in an improvement in environmental performance and sustainability…and a reduction in environmental impact". The Contractor is also required to supply environmental impact information, if requested to do so, in relation to the materials and goods selected by the Contractor.
- Negotiation and negotiation of disputes: the notification and negotiation of disputes provision has been moved from the supplemental provisions to the main provisions at clause 9.1. It requires prompt notice of "any matter that appears likely to give rise to a dispute or difference". It further requires the senior executives of each party as nominated in the Contract Particulars to meet "as soon as practicable for direct, good faith negotiations" with a view to early settlement of any dispute.
New insolvency grounds
Two new company insolvency grounds have been added. These reflect the Corporate Insolvency and Governance Act 2020 (CIGA) and cover standalone moratorium procedures, and the compromise or arrangement procedure referred to in Part 26A of the Companies Act 2006.
Fluctuations
The printed text of the JCT Fluctuations Options is no longer included in the 2024 contracts, and is instead available online on the JCT website. Accordingly, Schedule 7 (Fluctuations Option A) has been deleted from the DB 2024.
If you have any questions about this article, please contact Mark Stephenson or Gemma Whittaker.