Reflections on JCT 2016

As Christmas creeps up on us I hope you will find a few thoughts on the new JCT 2016 contracts helpful.

We have in previous blogs noted that the final date for payment of both interim sums and the final payment is reduced to 14 days from the due date. It used to be 28 days for the final payment. An employer must decide whether it is sanguine about this, or really needs more time for the final date to kick in so they can operate the contractual process applying key provisions such as the issue of a pay less notice in time.

Keeping on top of the time frames in JCT (or any extension to them) has become even more important, otherwise rights can be lost.   

As we have pointed out in the seminars we have run on JCT 2016 the assessment process for loss and expense claims is more rigorous. The underlying principle is that JCT anticipates the claims will be developed over time, commencing with an initial assessment and progressing from there monthly as it is built up by the contractor. This is not dissimilar from the approach taken under NEC 3. However JCT now has a specific time frame for the employer to review and ascertain the value of the claim and advise the contractor of its ascertainment. The 28 day period for the first assessment, reduced to 14 days for subsequent assessments may dismay employers. That may be altered or struck out. There is no sanction for not complying with the time frame. JCT Guidance Notes as well as comments from the JCT Drafting Committee suggest JCT did not intend to create a condition precedent.   

JCT in tidying up the consents and approvals position JCT have gone for what they call an “umbrella clause” covering the whole of the contract that neither party will not unreasonably delay or withheld their consent or approval. This may be problematic if the employer’s requirement is not open ended, and needs thinking through.

To wrap up for now, Insurance Option C has attracted a lot of interest. For works in occupied buildings the recognition that the insurance arrangements required may not fit into the “old” JCT Options A, B and C straight jacket is welcome. The bottom line is consult your insurance broker to ensure the insurance cover in place is what is needed. Make that a priority, not a last minute thing.   

Merry Christmas!

For more information on JCT forms of contract, click here.

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