Blog Author: Peter Hibberd
2024 has seen the publication of the principal JCT 2024 contracts, with its other contracts to follow. It also saw the publication of the Grenfell Report Phase 2 on the 4th September, a report that highlights one of construction’s great disasters. Not that there is any direct link between these events but there is a common issue, that of adherence to contractual provisions and relevant statutory frameworks.
The Phase 2 Report identifies that there were ‘organisations bound together by a web of contracts and subject to legislation in the form of the Building Regulations’. It also states that there existed ‘an ingrained willingness to accommodate customers instead of insisting on high standards and adherence to a contract that was intended to maintain them.’ The issue of parties not complying with contracts and with processes, arises throughout large parts of the Report.
Those comments in the Report raises many issues, such as (i) that contracts are important in setting out obligations and responsibilities (ii) that there should be adherence to such provisions (iii) that strict statutory obligations must be complied with (iv) that management must be exercised professionally, which naturally embraces ethical behaviour. Any failure of these increases risk, and where it relates to safety, the cost, as we have witnessed, goes far beyond purely economic cost.
Therefore, it is not surprising that the JCT 2024 revision embraces the Building Safety Act 2022, which was introduced in response to the Grenfell Tower fire. The principal changes are the adjustment to reflect the new Part 2A of the Building Regulations 2010, introduced by the Building Regulations (Amendment) (England) Regulations 2023. The background and nature of these changes are covered in the JCT Guidance Note ‘The Building Safety Act 2022’, which is available at https://www.jctltd.co.uk/useful-documents. Following the Phase 2 Report, there are likely to be further measures introduced by the Government. What parts of this Report will be implemented, and whether any will require a contractual response is not yet known.
That JCT Guidance Note recognises that, for the most part, the obligation to comply with the Building Safety Act is covered by the obligation to comply with Statutory Requirements, a defined term in the principal JCT contracts. Despite this it has specifically dealt with the new dutyholder regime, which it has treated in the same way as it provides for the CDM requirements related to dutyholders. That is a new Article, to which there is a useful footnote, for the appointment of the Principal Designer and Principal Contractor for the purposes of the Building Regulations. The provision dealing with the CDM Regulations has been extended to cover Part 2A of the Building Regulations. As has the provision under the Supply of Documents requiring any building information to be provided to the Contractor by the Employer under regulation 11A (4) of the Building Regulations.
Against this background it is important to recognize that a strict obligation to comply with statutory requirements, including Building Regulations, is not superseded by an obligation to exercise reasonable skill and care LDC (Portfolio One) Limited v (1) George Downing Construction Ltd and (2) European Sheeting Ltd [2022] EWHC 3356 (TCC). Although this leaves the interesting question as to whether an implied obligation would produce a different result it is not one to dwell on. What is more important is that one should act professionally and ethically when carrying out one’s business, because amongst other things it reduces risk. A part of that means adhering to appropriate standards, adhering to contract provisions and any inherent processes – they are there for reason. Sadly, adherence in this way does not always occur, sometimes because of a lack of knowledge and skill but all too often because of disregard.
There is no doubt the changes to the JCT regarding the Building Safety Act are important, not least because they raise the profile of the need to act properly. Nevertheless, the JCT changes also embrace other areas not concerned with safety but are important issues in the context of standard form contracts. These include such matters as; gender neutral language, which reflects a social change that is long overdue; the extension of the notice provisions to provide for the service by email and a note on electronic execution of documents; the inclusion in the main conditions of some of the previous supplemental provisions to raise their profile and to support concepts contained within The Construction Playbook (2022); the extension of Relevant Events to specifically include an epidemic (and a corresponding Relevant Matter for loss and expense) together with updated provisions for administering the extensions of time process; updated provisions to cover Statutory Providers rather than the Statutory Undertakers of the 2016 Edition; and changes to the Termination provisions.
Details of those changes can be found in the respective JCT contract guide or in the ‘Tracked’ version of the contract.
