2 Sep 2011
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JCT's new edition responds to changes to Construction Act

Peter Hibberd

The JCT’s chairman, Professor Peter Hibberd explains the changes

The Joint Contracts Tribunal (JCT) will launch the next edition of its contracts at a reception at the House of Commons on September 15.

It will be the first contract body to launch an updated suite of contracts to meet the changes to the Construction Act, which come into force on October 1, reflecting the legislative amendments insofar as they relate to payment terms and payment-related notices, but also including other changes such as the inclusion of a new insolvency definition in the termination section and the updating of the statutory reference to the Bribery Act 2010.

The JCT publishes a revision to its suite of contacts every five or so years, with the current edition being JCT 2005, and the previous one JCT 1998. The revisions of the JCT form of contract are important as they are used extensively throughout the industry. The last RICS Contracts In Use Survey found that they were used on four out of five of all building projects in the UK.

Of the other changes, users will be particularly interested in the revision to the professional indemnity insurance entries, as those relating to asbestos and fungal mould, which were only introduced in 2009, have been removed. This reflects the changing scene regarding insurance and that cover for those items is currently limited and not readily available.

Also to help legal professionals in the industry, JCT published a ‘tracked-change’ set of contracts in July. This was the first time JCT had done this, and allowed parties to future contracts to understand what the changes were going to be, and how they will impact on the projects.

In addition to the launch of the 2011 Edition, JCT is also launching a new Public Sector Supplement. Tailored specifically for public sector clients and their contract administrators, JCT has pioneered a user-friendly document that can be used in conjunction with JCT contracts in the procurement of public sector projects.

The new supplement includes several key features from the Government’s Construction Strategy, which emphasises greater collaborative and integrated working (including integrated project insurance), adopting Building Information Modelling, better use of frameworks, encouraging use of outcome based specifications and processes, fair payment, increasing the use of project bank accounts, and sustainable construction targets. Those matters all relate to construction contracts but will impact differently on central government and private sector projects.

The government is an important player because of the substantial percentage of work it funds both directly and indirectly and because of its impact through its changing procurement practices. JCT contracts are aligned with the Government’s Construction Strategy and also with the market place generally. They embrace the major requirements of the whole market.

The new JCT 2011 Edition provide the most up-to-date standard form contracts available in the industry, and now with a the addition of the Public Sector Supplement, JCT contracts can be fully used across the spectrum of public and private sector projects.