JCT 2024 – What has Changed?
Introduction
The Joint Contracts Tribunal (JCT) has recently released the JCT 2024 suite of contracts, updating its predecessor, the 2016 edition. These updates aim to reflect contemporary practices, statutory changes, and lessons learned from recent challenges. While the overall risk allocation remains largely unchanged, the revisions embed previously optional provisions and clarify key issues.
This practice note highlights the key changes and provides practical insights on their impact:
Collaborative Working
Sustainable Development and Environmental Considerations
Issuing Notices
Design Liability
Epidemics and Changes in Law
Liquidated Damages (LADs)
Asbestos
Part 2A of Building Regulations
Payment Provisions
Professional Indemnity Insurance
CIGA 2020
Termination Payment
Settlement of Disputes
Fluctuation Options
Collaborative Working
Background
The 2024 contracts introduce mandatory provisions for cooperative and collaborative engagement among parties and project teams. This provision, which replaces the optional supplemental provision from the 2016 contracts, also includes an obligation to address non-collaborative behaviour actively. This change aligns with industry initiatives, such as the Construction Playbook, which promotes less adversarial practices. The clause draws parallels with NEC’s Core Clause 10.2 but includes a further commitment to manage negative behaviour.
Our View
While the intent to foster collaboration is commendable, enforceability remains uncertain. Collaboration largely depends on the attitudes of project participants, making this provision more aspirational than actionable in many cases. Its success will hinge on the ability of project leaders to embed these principles practically at project inception. Early workshops and training on collaborative principles are advised to set a positive tone.
Sustainable Development and Environmental Considerations
Background
Sustainability receives heightened focus in JCT 2024, embedding what were previously optional supplemental provisions into the core contractor obligations. Key changes include requiring contractors to propose economically viable sustainability improvements and provide environmental impact information upon request.
These updates reflect increasing regulatory and societal emphasis on sustainable construction practices.
Our View
This is a significant step forward for the industry’s alignment with modern environmental standards. However, balancing these obligations with the practicalities of project delivery could present challenges. Clear communication and early integration of sustainability goals into project design and planning will be crucial for effective compliance. Contractors should also ensure thorough documentation of their proposals and compliance with these requirements.
Issuing Notices by email
Background
The JCT 2024 suite recognizes email as a valid method for serving notices, enhancing flexibility. An optional clause allows parties to agree whether notices expressly required by the contract can be served via email.
Our View
This update provides welcome flexibility and reflects contemporary working practices. However, parties must take care to ensure email addresses are accurately recorded and regularly monitored. It is critical that these details are included in the Contract Particulars to ensure notices are validly served. Templates for email notices should also be standardized to avoid disputes over content or format. Regularly updating contact information during the project lifecycle can prevent miscommunication and delays.
Design Liability
Background
JCT 2024 updates design liability clauses to align with statutory requirements and market practices. Contractors are now explicitly required to exercise reasonable skill and care, excluding liability for fitness-for-purpose unless mandated by statute. These updates also incorporate changes arising from the Building Safety Act 2022 and amendments to the Defective Premises Act 1972.
Our View
The changes strike a practical balance by reflecting the realities of professional indemnity insurance and contractor capacity. Clarity in these provisions reduces ambiguity, but parties should ensure design obligations are clearly articulated in the contract and insurance policies reviewed for alignment. Project teams should also ensure subcontractor obligations mirror these revised terms to avoid gaps in liability.
Epidemics and Changes in Law
Background
The 2024 suite introduces new Relevant Events and Matters to account for epidemics and legislative changes, providing contractors with relief for time and, optionally, costs. Lessons learned during COVID-19 heavily influenced these updates.
Our View
These provisions address critical gaps in earlier contracts and provide a more structured approach to handling unforeseen disruptions. Parties should ensure clarity in the Contract Particulars regarding whether cost recovery is allowed. Practical steps, such as including contingency allowances in budgets and preparing detailed records of disruptions, will support effective implementation.
Liquidated Damages (LADs)
Background
The new provisions clarify the application of LADs when a contractor’s employment is terminated. Employers are entitled to LADs up to the termination date, but common law remedies apply for delays beyond termination.
This change aligns with the 2021 Supreme Court decision in Triple Point Technology v PTT and similar updates in NEC4 contracts.
Our View
These updates enhance clarity and consistency while balancing employer and contractor interests. Employers should ensure LAD clauses explicitly reflect the rights for termination and subsequent delays. Maintaining precise records of completion and termination dates is essential to facilitate proper enforcement of these provisions.
Asbestos
Background
JCT 2024 introduces specific provisions for the discovery of asbestos, contaminated materials, or unexploded ordinances on site. These updates expand the steps previously outlined for handling fossils and antiquities. Contractors must cease work if the discovery endangers health, safety, or property and report the matter to the employer. Employers may then issue instructions, including allowing third parties to handle the material.
Our View
These updates are practical and address a key area of concern, particularly for older buildings. However, contractors should conduct thorough pre-construction surveys to identify and document risks. Employers should ensure contract documents clearly allocate responsibility for the presence of hazardous materials. Project teams should also develop clear procedures for managing discoveries to avoid delays or disputes.
Part 2A of Building Regulations
Background
JCT 2024 integrates contractor obligations related to Part 2A of the Building Regulations, complementing existing requirements under the CDM Regulations 2015. Contractors fulfilling the role of Principal Designer or Principal Contractor must now comply with obligations under both regulations.
Our View
This alignment reflects a regulatory trend towards increasing accountability in building safety. Clear allocation of roles within the Contract Particulars is essential to avoid confusion or overlapping responsibilities. Employers should verify the competence of appointed parties to discharge these duties effectively, as this will mitigate regulatory and project risks.
Payment Provisions
Background
The payment provisions in JCT 2024 introduce adjustments, including a revised approach to the timing of payments. The Major Project Construction Contract removes provisions allowing the final date for payment to depend on the issuance of VAT invoices, ensuring compliance with the Housing Grants, Construction, and Regeneration Act 1996.
Our View
These updates reduce ambiguity and enhance compliance with statutory payment practices. Employers should ensure the payment schedule aligns with project cash flow requirements. Contractors must adhere to the revised timelines to avoid disputes. Standardizing invoicing and payment protocols will help both parties maintain compliance.
Professional Indemnity Insurance
Background
Provisions related to professional indemnity insurance now reflect market realities, particularly following the Grenfell Tower fire. JCT 2024 allows the inclusion of specific sub-limits or exclusions within the policy, such as for cladding or fire safety.
Our View
This change acknowledges the evolving insurance market and its constraints. Contractors and employers must carefully review policy terms and ensure adequate coverage for the project's specific risks. Transparent discussions during contract negotiations will help address potential coverage gaps and ensure both parties are protected.
CIGA 2020
Background
The JCT 2024 contracts incorporate provisions reflecting the Corporate Insolvency and Governance Act 2020 (CIGA 2020). For instance, the definition of insolvency now includes references to moratoriums and Part 26A compromises under the Companies Act 2006.
Our View
These updates provide clarity in insolvency scenarios but may create complexities for contractors seeking to terminate contracts due to employer insolvency. Legal advice is recommended to navigate these provisions, and contractors should monitor the financial health of employers to mitigate risks.
Termination Payment
Background
A formal mechanism for termination payments is introduced in JCT 2024. Provisions include specific due dates, termination payment notices, and pay-less notices to govern the settlement of accounts following termination.
Our View
These updates improve clarity and reduce ambiguity in handling termination payments. Employers and contractors must maintain comprehensive records of works completed and payments made to facilitate accurate account settlements. Familiarity with the new procedures will help minimize disputes and delays.
Settlement of Disputes
Background
A new clause requires parties to promptly notify each other of potential disputes and engage senior executives in direct negotiations before escalating to formal proceedings. Arbitration under JCT 2024 will be conducted under the updated Construction Industry Model Arbitration Rules (CIMAR).
Our View
The emphasis on early dispute resolution is a positive step but relies on the commitment of both parties to engage constructively. Identifying senior representatives and establishing a clear process for internal discussions during contract setup will enhance the effectiveness of this clause.
Fluctuation Options
Background
Provisions for handling tax and levy fluctuations have been removed from JCT 2024. Parties wishing to include fluctuation options must now incorporate these separately from the JCT store.
Our View
This change simplifies the standard contract but places the burden on parties to address fluctuations where relevant. Employers and contractors should assess project-specific risks and agree on appropriate mechanisms during contract negotiations. For larger or long-term projects, incorporating fluctuation clauses remains advisable to mitigate financial risks.
Conclusion
The JCT 2024 contracts bring much-needed updates to the construction industry, addressing modern challenges such as sustainability, epidemics, and evolving regulatory requirements. These changes are practical and forward-looking, but their impact will depend on how quickly they are adopted and implemented. Many in the industry are still working with the 2016 editions, and it may take time for a full shift to the 2024 versions.
At KJ Management, we believe these updates present an opportunity to refine practices, mitigate risks, and foster stronger project relationships. However, the real test will be how well these provisions are understood and applied on-site and in day-to-day contract management.
If you would like to learn more about how these changes affect your projects or need support in transitioning to the JCT 2024 suite, don’t hesitate to get in touch with Kieran Lynch at KJM. As an experienced professional in construction and contract management, Kieran can provide tailored advice and ensure you’re equipped to navigate these updates with confidence.
Let’s work together to embrace these changes and continue driving excellence in construction practices.
