The JCT launches its 2024 edition

Earlier this month, the JCT launched its new edition of building contracts with the publication of the first set of 2024 agreements.

A new family of contracts

A new edition of JCT contracts has been in the pipeline for some time. The JCT was close to finalising the first contract in a new suite a couple of years ago, but as the Building Safety Act 2022 (BSA) was granted Royal Assent in April 2022, it became clear that additional amendments would be needed to reflect the provisions of the new legislation. In its July 2023 e-bulletin JCT: The Next Evolution, the JCT stated: "This secondary legislation is largely expected to be finalised by October 2023 and the JCT want to ensure the new suite reflects this new legislation". 

Now that we have that secondary legislation, the JCT has got the ball rolling on its JCT 2024 collection starting with its popular Design and Build suite compromising: 

• the Design and Build Contract, 2024 Edition (DB 2024); 
• the Design and Build Contract Guide 2024 (DB/G 2024); 
• the Design and Build Sub-Contract Agreement, 2024 Edition (DBSub/A 2024); 
• the Design and Build Sub-Contract Conditions, 2024 Edition (DBSub/C 2024); and 
• the Design and Build Sub-Contract Guide 2024 (DBSub/G 2024).

The JCT has not given a timeline for the publication of new editions of the other contracts in the JCT collection. Some of these will almost certainly be published next year, but the full collection of agreements will be known as 'JCT 2024' and will include a new family of building contracts – a new JCT Target Cost Contract (TCC) suite which will consist of a main contract, a sub-contract and an accompanying guide.

Key features of DB 2024

The new contract contains some welcome features that provide clarity and improve the operation of some of the contract's provisions. These include the following:

• DB 2024 allows for the electronic execution of the contract and for notices and communications to be given by email, and includes streamlined notification procedures in the extension of time clauses. 
• In Section 8, which deals with termination, the definition of "Insolvent" has been expanded to include the new grounds of insolvency created by the Corporate Governance and Insolvency Act 2020 (the moratorium and restructuring plan) and the termination accounting and payment provisions have been amended to reflect the requirements of the Construction Act (a due date for the final payment after termination has been added).
• DB 2024 includes a new 'relevant event' to cover epidemics and an expansion of the exercise of statutory powers relevant event. Both are also now listed as optional 'relevant matters' in Section 4 and could give rise to termination by either party in the event of a related continued period of suspension. The JCT has not stopped there and has also given contractors relief upon the discovery of asbestos, contaminated material or unexploded ordnance (to extent the presence of the same was not identified in the contract documents). Contractors will no doubt be pleased with these additions which will give them the ability to claim additional time and money. Additionally, Employers and their agents will need to be on their toes in dealing with applications for  relevant events as the JCT now gives Employers less time to notify Contractors of its response to a claim (8 weeks instead of 12). 
• The new form contains a new footnote ([38]) which states that the parties may wish to agree an overall cap on the Contractor's liability (the accompanying Guide provides example wording). This is the first time the JCT has suggested an overall cap on liability.
• The decision of the Supreme Court in Triple Point Technology Inc v PTT Public Company Ltd (2021) has been reflected in the contract by the JCT providing that the liquidated damages clauses apply up to the termination of the contract, but not thereafter. 
• Changes have been made to the Contractor's design liability wording and associated duty of care in clause 2.17. The clause now includes a new exclusion for the Contractor's liability for fitness for purpose in design. 
• The JCT has made three previously optional supplemental provisions mandatory. These are the clauses that relate to collaborative working, sustainable development and environmental considerations and the notification and negotiation of disputes. The Guide states that this change represents "the JCT's response to the Construction Playbook" and makes reference to both the public and private sector Construction Playbooks. The new form and guidance do not, however, make any reference to the Procurement Act 2023 so parties will need to separately consider these requirements in the context of public sector contracts (given that the Act implies a number of terms into public sector contracts and the importance that performance against nominated KPIs in contracts with a value exceeding £5 million will take (for both clients and contractors) going forward). Please see our Essential Guide to the Procurement Act 2023 for further details.
• Finally, Fluctuation Option A  has been taken out of the contract altogether and uploaded to the JCT's website (DB 2024 Fluctuation Options); if no option is selected, Fluctuations Option A will apply by default.

Building Safety

An important area that all stakeholders in the construction industry and real estate development market need to understand is building and fire safety. The BSA has ushered in the biggest swathe of regulation affecting the construction industry since the Building Act 1984 hit the statute books 40 years ago. The changes introduced by the BSA (and the myriad of regulations passed under powers granted by this Act – to date, more than 30) and the Fire Safety Act 2021 are both detailed and complex.

The DB 2024 is light on detail concerning relevant building safety matters under the BSA. The new contract contains limited provisions that address the duty holder roles under Part 2A of the Building Regulations 2010 and do so by expanding the CDM Regulations clause. This itself serves to fuse (and may confuse?) the two separate regulatory regimes rather than dealing with each one separately; a single clause means fewer words, but the scope of each regime is different, and parties need to be mindful that they create different duties and have different sanctions for non-compliance. 

In addition, the new contract does not deal with the various regimes provided for by (and forming part of) the new building control framework for higher-risk buildings in England (the 'gateways', the 'golden thread of information', 'mandatory occurrence reporting') or the extended limitation periods that apply to new and revamped causes of action under the BSA. Developments that include higher-risk buildings require updated agreements with robust provisions built in, with supplemental schedules and supplementary checklists designed to help the parties surmount the new mountain of regulation.

The devil is in the detail and it is the detail which the Building Safety Regulator (BSR) and registered building control approvers will be looking for. Parties involved in higher-risk building projects also need to be aware that the BSR will carry out its function as the building control authority through a team that includes a registered building inspector and other specialists required to assess a submission, collectively called a multi-disciplinary team (MDT).

Next steps

Building contracts, professional appointments and all related agreements need to be revisited to ensure that building and fire safety matters (including the revamped Regulation 38 of the Building Regulations, which deals with fire safety information) are dealt with fully and comprehensively.

JCT 2024 is the fifth edition of contracts produced by the JCT in a generation. In addition to looking at the new terms and conditions, each edition offers users the opportunity to re-evaluate their internal checks and processes and update their procedures and precedent contracts.

Please drop us a line if you would like to discuss any of the issues raised or wish to upskill your knowledge on Construction Procurement Methods or the BSA regulatory regimes that now apply in England.