WHAT HAS CHANGED IN JCT 2016?
The JCT has now published its JCT Design and Build, 2016 Edition suite of contracts and guides but what difference will this make?
This full suite includes 2016 Edition of the JCT Design and Build Contract itself together with the Sub-Contract, the Sub-Contract Conditions, Guide and the Sub-Contract Guide.
The changes include:
• Incorporating and updating provisions from the JCT Public Sector Supplement relating to fair payment, transparency and building information modelling (BIM) into the JCT contracts as a whole.
• Incorporating provisions relating to the Construction (Design and Management) Regulations (CDM 2015) that were originally published in separate JCT amendments sheets
• Reflecting the Public Contracts Regulations 2015 for use on public sector projects.
• Provisions for granting performance bonds and parent company guarantees, and allowing for sub-contractors to grant third party rights under the Contracts (Rights of Third Parties) Act 1999. (The JCT 2011 editions allow for collateral warranties from sub-contractors, but not third party rights.)
• Extending Insurance Option C so that it allows alternative solutions to the problem of obtaining existing structures insurance for a contractor, together with a consolidation of the insurance provisions generally.
• Amendments intended to improve the suite’s “functionality and user-friendliness”, such as clarifying the intellectual property provisions and incorporating the provisions of the JCT 2012 Named Specialist Update.
There are also changes to payment, designed to reflect fair payment principles and to simplify the payment provisions. These include establishing interim valuation dates that will operate down the supply chain and, hopefully, promote fair payment and, under the interim payment due date provisions, allowthe monthly payment cycle to continue after practical completion, up to the due date of final payment.
They also simplify the payment provisions generally and include a new procedure for prompt assessment of loss and expense, more flexibility in relation to fluctuations. They consolidate the provisions containing the notice requirements of the Housing Grants, Construction and Regeneration Act 1996.
Whilst these changes will be welcomed, the true test of the JCT 2016 suite will be whether it becomes more user-friendly.
The JCT contracts are notoriously complex for the unfamiliar user, with extensive cross-referencing and provisions that often extend into sub-sub-clauses. Some commentators may be disappointed that the JCT has not taken this opportunity to radically simplify the structure and wording of its contracts, but deep-rooted changes are unlikely while the JCT suite retains its pre-eminent status in UK construction.
While previous JCT editions have had some digital functionality, it has always been limited. The increased use of technology in both the construction and legal sectors may demand similar changes in building contracts. For example, several standard forms of professional appointment are already available in electronic format, including those published by RIBA and the Association for Consultancy and Engineering (ACE).