On 17 April 2024 the JCT published the first of its new edition of standard contracts – JCT 2024 – starting with the Design and Build contracts ("DB2024").
Brodies LLP in the coming weeks will take a deep dive into the changes introduced in JCT 2024 and provide comment on how those changes could affect Employers and Contractors alike.
New Relevant Events and Optional Relevant Matters.
DB2024 has extended the list of Relevant Events to cover delays caused by epidemics and for those caused by changes in law or the publication of Statutory guidance affecting the Works. These Relevant Events are also listed as optional Relevant Matters.
The inclusion of epidemics is both prospective and retrospective, thus an epidemic which occurs after the Base Date, and an epidemic which occurs before the Base Date whose effects change after the Base Date and that change affects the execution of the Works are both covered. The epidemic must, however, limit the availability or use of labour, or persons engaged in providing services for the Works where such labour and/or persons are necessary for the proper carrying out of the Works, or prevent or delay the contractor in securing goods, materials or services as necessary for the proper carrying out of the Works.
The exercise of a statutory power (including a change of law and the publication of guidance) shall be a relevant event under the JCT 2024 Design and Build Contract if it affects the execution of the Works. With regard the issue of "guidance", the Design and Build contract provides that the guidance is that published by the Construction Leadership Council or its successor, perhaps allowing for swift action to be taken where necessary.
In addition to the above, Clause 3.15 of DB2024 has been extended to include for the discovery of asbestos, contaminated material and unexploded ordnance devices. Delay caused by these risks are now included as both Relevant Events and Relevant Matters, but except to the extent that the presence of asbestos or contaminated materials has been identified within the Contract Documents and/or any such material has been brought on to the site by the Contractor or any Contractor's Person.
Extension of Time – timescales for Employer's decision
DB 2024 has shortened the time period for an Employer to notify its decision on an Extension of time following receipt of notice and particulars from 12 weeks to 8 weeks. It also, however, provides for a separate timetable where the Contractor gives notice of a material change in the estimated delay or in any other particulars. In those circumstances, a decision is required 8 weeks from the receipt of the material change notification (albeit, the Employer shall remain obliged to issue its decision with regard to the original notice and particulars within 8 weeks of those being given). JCT's requirement for assessments to be made according to separate timescales is designed to improve the efficiency of the decision-making process.
If, upon receiving notice by the Contractor of a delay to progress, and/or particulars, the Employer considers that it required further information reasonably necessary to enable it to reach a decision on an Extension of Time, DB2024 now places an obligation on the Employer to notify the Contractor stating the further information required not later than 14 days from the receipt of the particulars or notification (or notification of a material change). The Contractor is thereafter obliged to supply such further information. Where the parties follow this procedure, the Employer's decision is then due not later than 8 weeks from the date of receipt of the further information required under Clause 2.24.4.
The mechanism introduced in DB2024 does, in principle, offer certainty to the Contractor that no further information should be sought by the Employer after 14 days (contrary to DB2016, where further information could be sought "at any time"). For Employers, the risk arises where a failure to request such information could see you lose the right to obtain it, calling into question how any subsequent Extension of Time awarded could be curtailed due to a lack of available information.
However, by intertwining this mechanism with the date in which the Employer is required to issue its decision, the mechanism could, in our view, provide a breeding ground for disputes. It is easy to foresee a scenario whereby an Employer and Contractor dispute the necessity of the information sought by the Employer to enable it to reach a decision. Until such time as that dispute has been resolved, an Employer could hold the position that it is under no obligation to reach a decision in any until such time as it is in receipt of the information requested from the Contractor. The ultimate effect would be to delay the decision-making process, which is, presumably, the opposite intention of its introduction.
First appeared in Construction News
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