All change? – the JCT 2016 Suite of Building Contracts
31st January 2017
With the publication of the JCT Intermediate Building Contract 2016, the full suite of 2016 edition JCT contracts has now been published (save for the less frequently used Major Projects Contract), replacing the previous 2011 editions.
The 2016 forms introduce similar changes to each of the contracts in the suite, from the Design and Build form down to the Minor Works form.
What has changed?
On the face of it, the changes introduced in the 2016 forms appear substantial, particularly in relation to payment and insurance.
However, the majority of these are stylistic in nature, serving to tighten up the previous drafting and consolidate the previous provisions. The more material changes include the following:
- Amendment to the payment provisions in four main areas:
- the introduction of provisions consistent with the Construction Supply Chain Payment Charter to speed up payments throughout the supply chain;
- to make interim payment dates continue at monthly intervals until the final certificate, rather than changing to two monthly intervals at practical completion as was previously the case;
- notified sums are now automatically recoverable as a debt;
- amendment to the loss and expense provisions to tighten up the timings and provide greater certainty (not applicable to the Minor Works form);
- Amendments to provide more flexibility in the insurance arrangements in relation to the insurance of existing structures, to address a criticism that the previous insurance provisions were not appropriate for works being carried out in a building with multiple occupants, requiring wholesale amendments to these provisions;
- Incorporation of changes to deal with the Construction (Design and Management) Regulations 2015, so that Amendment 1 (which made the necessary amendments to the 2011 forms) is no longer required;
- Introduction of provisions relating to Building Information Modelling (BIM) where applicable, including reference to a BIM protocol;
- Introduction of optional requirements for a performance bond and/or parent company guarantee in each contract other than the Minor Works form, although the JCT has not published their own forms and leaves it to the parties to agree these;
- Introduction of provisions for third party rights from subcontractors as an alternative to subcontractor collateral warranties in each contract other than the Minor Works form;
- Amendments to include provisions required by public sector bodies, in particular to cover their obligations under the Public Contracts Regulations 2015.
What does this mean for me?
The 2016 suite of JCT contracts does not introduce wholesale changes to the 2011 versions, but it is best practice to use these up to date forms to take advantage of the above amendments, particularly for public sector employers.
However, for any projects which have already commenced or where negotiations are already under way based on a 2011 form, this should still be adequate, provided Amendment 1 is incorporated to deal with the CDM Regulations 2015.
It is also important that the forms of subcontract used match the main building contract for consistency, and that developers and employers who use their own precedent schedules of amendments to the JCT forms of contract update these for consistency with the 2016 versions.
How can Ward Hadaway help?
For more information on these contract changes or on any other aspect of construction, please get in touch.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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