JCT announces new features of 2016 editions

The JCT has revealed some of the changes that will feature in its 2016 edition contracts. As expected, the 2016 edition will incorporate previous updates to the 2011 edition, such as those included in the JCT's Public Sector Supplement, its CDM amendment sheets and its named specialist update. Other changes include:

  • Altering the payment provisions to reflect fair payment principles and to simplify the payment regime
  • Catering for the Public Contracts Regulations 2015 (SI 2015/102)
  • Extending Insurance Option C so that it allows alternative solutions to the problem of obtaining existing structure insurance for a contractor

In terms of ancillary documents, the 2016 editions will provide for a performance bond, a parent company guarantee and for sub-contractors granting third party rights under the Contracts (Rights of Third Parties) Act 1999.  The new suite will be released in contract 'families' starting with the Minor Works in May, and then releasing the Design and Build, Intermediate and Standard forms, before moving on to the less popular forms, which may not be released until early in 2017.  The 2011 contracts will be phased out over a 9 month period, starting from May.

Sentencing guidelines effective from 1 February 2016

A reminder that the Sentencing Council has published its definitive sentencing guidelines covering corporate manslaughter, health and safety, and food safety and hygiene offences, following last year's public consultation on the draft guidelines.

The guidelines came into force in England and Wales on 1 February 2016 and apply to any case sentenced on or after that date.

The guidelines span a range of offences and, unlike the previous guidelines published by the predecessor body (the Sentencing Guidelines Council), they do not just cover offences causing death but include causing harm and the risk of harm.

Companies convicted of the most serious offences, where they have flagrantly breached the law and created a very high risk of serious harm, or where serious harm has actually been caused, can expect to receive a fine proportionate to the seriousness of the offence and to their financial means. In the most serious of circumstances, large organisations (turnover of > GBP 50 million) could now be faced with fines of up to GBP 10 million (or potentially more than this in the case of very large organisations), whilst individual offenders could be handed custodial sentences of up to 2 years.

Draft apprenticeship levy legislation published

HMRC has published draft legislation introducing the proposed new apprenticeship levy. Comments were invited by 2 March 2016. The levy is to have effect from 6 April 2017.

Industry reaction to the proposed levy has not been positive, as it is considered to be a new payroll tax. HMRC comments that employers that are committed to training will get more back than they put in via the levy by training a sufficient number of apprentices. However, at this stage, it is unclear how the Construction Industry Training Board's (CITB) existing arrangements in the construction industry will be affected by the new levy.

Jackson recommends fixed costs for claims up to GBP 250,000

In a speech at the IPA annual lecture, Jackson LJ suggested that costs for claims up to GBP 250,000 should be fixed in a series of bands, as follows:

  • Band 1: GBP 25,000 to GBP 50,000
  • Band 2: GBP 50,001 to GBP 100,000
  • Band 3: GBP 100,001 to GBP 175,000
  • Band 4: GBP 175,001 to GBP 250,000

The costs would be fixed for each of the 10 stages contained in costs precedent H. Uplifts would be applied for work being carried out in London, and for particular categories of claim, including for construction claims.  It is anticipated that the government will consult on the proposed regime during the year.

CIOB publishes user notes for Time and Cost Management Contract 2015

The Chartered Institute of Building (CIOB) has published a substantial "user notes" document to be used with its Time and Cost Management Contract 2015. This document explains the contract documents, the parties' roles and responsibilities and some of the contract's key features. It also includes a model project timeline and a series of flow charts illustrating some of the contract processes.

To read more, please click here.