The Joint Contracts Tribunal ("JCT") publishes a suite of contracts for use in construction projects in the UK.  If your clients are carrying out works in the UK they may well be familiar with the contracts.

The JCT was established in 1931 and has been publishing standard form contracts for the construction industry ever since.  Its contract suite now includes standard forms of main and subcontract for each of the key procurement methods, guidance notes, homeowner contracts, partnering documentation and collateral warranties.

The contracts were last revised in 2011 and, since then, various amendments and additions have been made by way of supplements and amendment sheets. The JCT will be publishing new editions of its suite of contracts over the course of this year.  The changes are anticipated to primarily involve:

  • updating and incorporating the provisions of the JCT Public Sector supplement relating to fair payment, transparency and BIM (Building Information Modelling);
  • new provisions to reflect the Public Contracts Regulations 2015, with provisions for use by public bodies, contractors and sub-contractors on public sector projects;
  • incorporation of the amendments relating to the Construction (Design and Management) Regulations 2015 which, until now have been set out in an amendment sheet which had to be separately incorporated;
  • changes to the payment provisions to reflect fair payment principles and to simplify and consolidate payment provisions in particular:
    • establishing for fair payment purposes interim valuation dates which will operate at main contract, subcontract and sub-subcontract levels;
    • providing that the monthly cycle of due dates and payments continues after practical completion until the final payment;
    • general revision and simplification of the payment provisions, the introduction of a procedure for prompt assessment of loss and expense claims, more flexibility in respect of fluctuations provisions, and the consolidation of provisions in respect of notices,
    • amendments to insurance Option C provisions (to provide a solution to the problem of obtaining existing structure insurance when the owner of the existing structure is not the employer) together with consolidation of the generic provisions that apply to insurance Options A, B and C (evidence of insurance, insurance claims and reinstatement work);
    • introduction of provisions relating to performance bonds and parent company guarantees;
    • addition of an option for subcontractors to grant third party rights under the Contracts (Rights of Third Parties) Act 1999 instead of collateral warranties;
    • general changes to improve functionality and user-friendliness;
    • incorporation of provisions of the JCT named specialist update 2012 where appropriate.

Many of the above issues are already being addressed by parties by way of bespoke amendments to the current suite of contracts so the new contracts are likely to be welcomed by the industry.  The new editions will be published in families with the JCT Minor Works family of contracts expected early this summer followed by the Design and Build contracts and the remaining contracts to follow.

For parties adopting the JCT Contracts on projects where one of the parties is not a UK entity (or indeed using the JCT or other standard forms on international contracts), those preparing the contracts will have additional considerations to take into account including:

  • enforceability in a non-UK jurisdiction (this is of particular importance in the context of security, for example bonds or parent company guarantees);
  • addition of a provision obliging a non-UK entity to maintain a process agent in England for the service of proceedings; and
  • applicability of local laws - for projects outside the UK, even where the governing law is stated to be English law, the parties should be aware of any local laws and regulations which may nonetheless apply to their project.

Our construction team's extensive experience in advising on all forms of construction contracts for a diverse range of projects (including in the energy, retail and education sectors), together with the ability to call on the expertise of our Advoc colleagues when required, means that we can provide expert and tailored advice on projects across a wide range of jurisdictions and sectors.

For further information please contact:

Stephen Homer
Partner
s.homer@ashfords.co.uk

Catherine Welch
Senior Associate
c.welch@ashfords.co.uk