This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
In July we wrote about the key changes included in the JCT Minor Works 2016 contract. The JCT has now released the new design and build contract. As with the Minor Works edition, changes have been made to the payment provisions in an attempt to simplify a procedure which was seen by some as overly complicated. The payment procedures are now consolidated into one section rather than being spread throughout the contract. Interim Valuation Dates apply (determined by reference to the Contract Particulars), and there is no longer anything to distinguish interim payments due before and after practical completion. The period between certificates is monthly, regardless of whether practical completion has taken place, and there is a 14 day period between the due date and the final date for payment in respect of both interim and final payments.
Information relating to loss and expense claims must now be provided by the contractor on a monthly basis and assessed promptly (within 28 days) by the employer. There is increased flexibility in relation to the fluctuation provisions, the changes to which see the removal of options B and C from the contract. The insurance provisions relating to work and existing structures are also more flexible, incorporating alternative arrangements for employers who are unable to obtain all risks insurance of an existing structure in the joint names of the parties.
Part 2 of the Contract Particulars, which dealt with Third Party Rights and Collateral Warranties, has been deleted. The parties can add their own bespoke document detailing which rights (whether third party rights or collateral warranties) are to be granted to relevant parties, though the JCT does produce a model form for this document.
There are no surprising amendments and overall the risk balance remains the same. Nevertheless, it remains the case that the standard form does not always reflect normal practice in the industry. Perhaps the most obvious example of this is that, under an un-amended JCT Design and Build Contract, the contractor still does not take full design responsibility. Since Employers and Funders generally require the contractor to accept a single point of responsibility for the design and construction of the works (requiring a novation of any pre-existing design), the standard form will usually require some amendment.
Overall though, the amendments generally clean up and simplify the provisions and users are likely to welcome this more concise edition of the popular contract.
