The Joint Contracts Tribunal (JCT) remains in the process of releasing new 2016 editions of its standard form suite of construction contracts on a gradual basis.
The JCT Minor Works Contract was the first to be launched on 22 June 2016, followed by the newly updated JCT Design and Build Contract which was released on 22 September 2016. Updates to the rest of the suite are expected to be published over the next few months.
What has and will change?
The roll-out of these major updates follows the JCT conducting an industry-wide consultation which sought to consolidate various updates and supplements which have been released since the 2011 editions, derived from a number of key cases and pieces of new legislation.
The chair of the JCT recently provided an update of the main changes featured in the new 2016 editions and here is a summary of the main points:
Provisions are included (and updated) from the JCT Public Sector Supplement relating to Fair Payment, transparency and the Building Information Modelling (BIM) Protocol into JCT contracts as a whole;
Provisions relating to the CDM Regulations 2015 (previously dealt with in the JCT ‘Amendment 1’) are fully incorporated;
The JCT 2016 editions reflect the Public Contracts Regulations 2015 with provisions for use by public bodies, contractors and sub-contractors on public sector projects;
There are a number of changes in respect of payment, designed to reflect Fair Payment principles and to simplify and consolidate the payment provisions. For example, the revised forms include consolidated drafting dealing with payment notices, pay less notices and final dates for payment which apply to both interim and final account payments and changes which affect when the due date will occur. Also, the monthly cycle of payment due dates now continues to apply after practical completion under the interim due date provisions, up to the date for the final payment. This is in keeping with the new loss and expense ascertainment procedure and Fair Payment Principles;
The new editions include provisions for the grant of performance bonds and parent company guarantees and extend the optional provisions for the obtaining of collateral warranties from sub-contractors to include, as an alternative, the granting of third party rights by sub-contractors. While the parties will still need to agree the form of bond/guarantee (as the JCT has not published its own forms), the provision is helpful in recognising that security is usually expected to be provided in today’s market; and
An extension of (Works) Insurance Option C is included to allow alternative solutions to the problems encountered by tenants and domestic homeowners in obtaining existing structures cover for contractors, and consolidation within the main text of the generic provisions that apply to Insurance Options A, B and C. However, these amendments still do not provide for the more normally amended Option C positon for refurbishments where it is common for the contractor to retain the obligation to maintain its contractor all risks policy and extend it to the owner, employer and, if relevant, the funder too, whilst the owner/employer insure the existing premises.
Further changes are also incorporated: these are designed to improve functionality and user-friendliness across the suite, including minor updates and clarification of the intellectual property provisions and integrating the provisions of the JCT 2012 Named Specialist Update.