JCT 2024 – Looking forward

The Joint Contracts Tribunal (JCT) have announced a new suite of contracts will be published on 17 April 2024, known as the JCT 2024.

The JCT publish a customisable suite of contracts which cover all aspects of a construction project – the aim of these standard form contracts is to cut down the time spent producing contracts and deliver consistent and reliable results.

JCT contracts are commonplace in the industry and used in approximately three quarters of UK domestic projects.

We expect four main themes to the changes in the JCT 2024 which are:

1. Modernising and streamlining the current JCT 2016 suite
2. Incorporating the recent legislative changes to the industry specifically the Building Safety Act 2022 and its secondary legislation
3. Future proofing; and a new form of target cost contract.

Modernising / streamlining

Changes to the JCT 2024 will include the long overdue adoption of gender-neutral language, together with provision of execution by way of electronic signature and a facility for notices to be sent electronically. Digital working is likely to be championed, although the hard copy will still be available.

Fluctuations – price uncertainty is set to continue into 2024 and the JCT has launched a new fluctuations hub to offer guidance on its fluctuation options and also plans to move the fluctuation provisions to an online document, to increase prominence and accessibility.

Extensions of time (EOTs) – there will be amendments to the EOT provisions which will include incorporation of relevant events for ‘epidemics’ and updates as to how ‘statutory powers’ are dealt with. Also ‘statutory undertakers’ will be redefined to ‘statutory providers’.

There will be accelerated assessment of interim EOTs i.e. the period of time for the employer to assess an interim extension of time will be reduced from 12 weeks to 8 weeks from receipt of the contractor’s particulars. There is a further expanded scope for relevant events i.e. antiquities will be extended to deal with unexploded bombs (UXBs), contamination and asbestos.

Loss and expense – the contract particulars are to provide for parties to include optional additional grounds for the contractor to claim loss and expense. These include epidemics and the exercise of statutory powers by the UK Government which directly affects the works. The relevant matter dealing with antiquities will be extended to deal with UXBs, contamination and asbestos.

Liquidated damages (LDs) – the JCT is also making amendments to reflect the Supreme Court’s decision in Triple Point Technology Inc v PTT Public Company Ltd (2021). The decision restores the orthodox position that liquidated damages clauses apply up to termination of a contract, but not thereafter.

Clear wording must be used if parties want to agree a different approach. The planned updates to the JCT are likely to provide that where works are not complete at termination, LDs can be levied up to termination and only general damages for delay can be claimed thereafter.

Legislative changes

There will be updates to reflect recent legislation including the Building Safety Act 2022 and its secondary legislation and the two new insolvency grounds that were introduced under the Corporate Insolvency and Governance Act 2020.

Further, we are expecting revisions to termination accounting provisions to reflect the requirements of the Construction Act, in particular the insertion of a due date for the final payment after termination.

Future proofing

The contract has been drafted with consideration to the ‘Construction Playbook’, sustainable development, collaborative working and environmental considerations. The JCT 2024 will seek to incorporate previously optional supplementary provisions relating to collaborative working, sustainable development and environmental considerations into the main contract provisions.

New “target cost” contract

The JCT suite is being expanded to include a new form of contract including a main contract, subcontract and guide set to be published. The aim of the target cost form of contract is to promote collaboration, transparency and cost control through construction projects whilst managing the risks of competing stakeholder interests and often pressure to control costs.

The success of this form of contract is dependent on effective contract administration throughout the life of the project; adoption of the form of contract alone will not be enough to realise the potential benefits.

In summary, there are a significant number of changes to look out for within the JCT 2024 suite of contracts, which will be available from 17 April 2024.