In this series we shed some light on some of the key people who are involved with or give their time to support JCT, to ensure that all areas of the construction industry are represented and can contribute to the development of our contracts. We will look at how our interviewees contribute to JCT specifically, and gain their views on JCT’s wider role within the industry.
Member of the JCT Council
Chair of the Performance Bond Working Group
Marc Hanson is a partner and Head of the Construction team at international law firm Berwin Leighton Paisner LLP. He has over 25 years’ experience advising on UK and international construction and engineering projects with values of up to £18 billion. He represents the British Property Federation on the JCT Council.
Marc can be reached at https://www.linkedin.com/in/marc-hanson-7177a023/
JCT: Marc, how did you first come to be involved with JCT? Why do you think it is important to be involved?
MH: I was introduced to the work of the JCT by Ann Minogue over 12 years ago. Ann and I worked together at Cameron McKenna and I learnt everything I know about construction law whilst working with her. Ann was involved with the JCT for many years as a representative of the British Property Federation and played a significant role in ensuring that the construction clients’ voice was heard in the drafting and evolution of the JCT contract suite.
Like Ann, I represent the BPF in my work with the JCT. Initially I sat on the JCT Drafting Committee and later I was appointed to the JCT Council. After 6 years on the Drafting Committee I stood down following the publication of the new 2011 JCT suite of contracts. Since then I have focused my time on the work of the Council.
The JCT is a unique contract drafting body as it brings together all sides of the industry in the drafting of its contracts. As such JCT contracts are now well balanced in terms of risk and this in turn has led them to become the contract of choice for private sector construction clients. My role as a representative of the BPF is to ensure that the concerns of such clients continue to be addressed in the drafting of the JCT contracts.
JCT: Can you tell us about any specific work you’re currently doing with JCT – through any boards, groups or committees, for instance?
MH: I have been appointed chair of a working group to look at the drafting of the JCT forms of bond. Whilst the JCT has agreed forms of bond in relation to advance payments, off site goods and materials and retention, it has not been possible in the past to agree a form of on default performance bond. There is now a real will across the various JCT colleges to fill this gap in the JCT suite of documents.
JCT: Do you have any personal career highlights? What are you most proud of about the construction industry as a whole and where do you think it most needs to improve?
MH: I have had the good fortune to work on a number of very challenging projects for some very professional developer clients. The ones that stick in the mind are those where the client has focussed on place making rather than just development. Indeed the UK construction industry is fortunate to have some very forward thinking clients and together they have produced some world class projects. I think the quality of most major UK construction projects, including their architecture and engineering, is excellent especially when compared to what we see (and litigate) overseas. Unfortunately the industry can be rather introspective, focussing on things that go wrong and not celebrating the many more things that go right. In particular there is a conviction that the UK industry is particularly riven by disputes. Construction projects are highly complex yet in my experience they do not generate more disputes than any other complex projects. In addition there are no more construction disputes in the UK than in other jurisdictions where the rule of law applies.
Where things do go wrong it is often due to payment issues. Various initiatives from Government and industry have tried to address the worst aspects of payment abuse but past results have not been particularly successful. Given the importance of freedom of contract a legislative solution may not be the most appropriate remedy. Encouraging (one way or another) better payment practices by all employers and main contractors would be a better solution.
JCT: What do you see as the main challenges for the construction industry over the next five years?
MH: The uncertainties thrown up by Brexit will have a major impact on the construction industry over the next five years. The devaluation of sterling and resultant inflation are already impacting on material and wage costs and that impact is likely to increase in the medium term. Increasing labour costs will be exacerbated by likely restrictions on the hire of non British labour once the UK leaves the EU. Construction employers should not expect a sympathetic hearing from politicians who will want to see them training up UK workers rather than hiring foreigners. All of this will of course have a cost impact and that will ultimately need to be picked up by construction clients.
JCT: Does JCT have a wider role to play in the industry beyond producing contracts?
MH: The JCT suite of contracts are the most widely used contracts in the UK. As such the JCT should (and increasingly does) take a leading role in educating users in the use of the contracts. In addition as a body that represents all sides of the industry it is uniquely placed to educate construction procurement professionals on a collaborative and consensual approach to construction procurement. After all, JCT contracts do not just include a few lines on collaborative working, they are all the product of actual cross industry collaboration.