Blog Author: Seán Mac Labhraí
Introduction
We are now over a year since the JCT published the first of the 2024 suite of contracts: the Design and Build Contract, or DB24.
Working for a main contractor specialising in design and build, we are now beginning to see a more widespread adoption of DB24 by employers / clients and their consultants, perhaps expedited by the JCT’s upcoming withdrawal of the 2016 editions. (I have been meaning to check with a solicitor who was still firmly wedded to DB11 as late as 2020, however – heavily amended, of course.)
Some early reviews of DB24 professed to be slightly underwhelmed at the extent of the changes from DB16, but this seems profoundly unfair when one considers that DB24 features the terms ‘epidemics’, ‘unexploded ordnance’, and (perhaps less thrillingly) ‘asbestos’.
A year on, and with an increased uptake, it is perhaps worth revisiting some of the key changes to DB24 likely to have practical implications for the parties, along with recommendations for their administration.
Clause 1.7 (Notices and other communications)
Clause 1.7, which governs the service of notices and other communications between the Parties, now expressly (and helpfully) allows for these to be served by email.
Multiple email addresses
Like DB16, clause 1.7 distinguishes between:
- those notices which must be served in accordance with clause 1.7.4 (for example, several of the notices relating to termination), and
- other notices and communications, which are governed by clause 1.7.3, and which may be served by ‘any effective means’.
Both clause 1.7.3 and clause 1.7.4.2 permit the relevant notices and communications to be served by email, and the two corresponding entries in the Contract Particulars therefore provide for the Parties to insert their chosen email addresses.
The first recommendation is therefore for each Party to adopt the same email address for both clause 1.7.3 and clause 1.7.4.2, to avoid any confusion.
‘Deemed’ service
Clause 1.7.4 also sets out when notices are ‘deemed’ to have been received by the other Party, in circumstances where those notices must be given in accordance with that clause.
In the case of notices sent by Signed For 1st class or Special Delivery Guaranteed post, they are deemed to have been received ‘on the second Business Day after the date of posting’, which is similar to the position under DB16.
However, in the case of notices given by email, clause 1.7.4.2 provides that the relevant email will be deemed to have been received ‘on the next Business Day after the day on which it was sent’, rather than almost instantaneously.
This potentially allows for the troubling situation where such a notice given by the Contractor by email at, say, 6am on Wednesday 24 December 2025 will not be ‘deemed’ received by the Employer until Monday 29 December 2025 (accounting for the two Bank Holidays and the weekend), when in reality, it will likely have safely landed in the Employer’s inbox within a few seconds.
(In such circumstances, the Contractor might have been better advised to brave the snow and deliver the notice by (cold) hand, in accordance with clause 1.7.4.1.)
This is not a position in which either Party would wish to find themselves in any dispute, as none of the related arguments (on either side) are particularly attractive, and it is easily avoidable.
The second recommendation is therefore for both Parties to dispel the notion of email as a means of almost instant communication, and to give any notices at the earliest possible opportunity, particularly in the case of those notices required to be given in accordance with clause 1.7.4.
Automated email replies and collaborative working
Now, in most contexts, the automatic email reply brings with it only disappointment, and dejection.
However, it could be boldly reimagined as an automated acknowledgment of receipt of the other Party’s notice, which need bring only reassurance and peace of mind (even if the contents of the notice are subsequently hotly disputed).
For this to work in practice, each Party would need to set up a dedicated email address (for example, ‘projectname-notices@employer.co.uk’), rather than one linked to any individual.
This dedicated email address could then be monitored by more than one person (and further to the point above, could apply to both clause 1.7.3 and clause 1.7.4).
This recommendation is relatively straightforward to implement, and would promote certainty between the Parties.
It has the further advantage of aligning with the newly promoted Article 3 (Collaborative working) (formerly but a lowly Supplemental Provision), which requires the Parties to work with each other in a ‘co-operative and collaborative manner, in good faith and in a spirit of trust and respect’.
Clause 2.24.4 (Notice by Contractor of delay to progress)
Clause 2.24 relates to the Contractor’s obligation to notify the Employer of delays to the progress of the Works, and sets out the information and particulars the Contractor must include within the relevant notices.
On receipt of those particulars (or any notification of a material change in the estimated delay, or in any other particulars), the newly introduced clause 2.24.4 provides the Employer with a 14-day review period, to consider whether it requires any further information reasonably necessary to enable it to make a decision in respect of the Contractor’s entitlement to an extension of time.
However, clause 2.24.4 does not set out what happens if, for example, the Employer requires further information after the 14-day review period, or the Employer makes no request for further information which might be considered reasonably necessary.
Furthermore, the updated clause 2.25.2 (Fixing Completion Date) considerably reduces the period for the Employer to notify the Contractor of its decision, from a maximum of 12 weeks to 8 weeks.
Taken together, the Employer has a more difficult task.
The Employer is therefore encouraged to undertake an initial detailed review immediately upon receipt of the information and particulars provided by the Contractor, to gain the maximum benefit of the 14-day review period, and to be as specific as possible in any request to the Contractor.
Similarly, and in the spirit of co-operation and collaboration embodied by the new Article 3, the Contractor is encouraged to check with the Employer at the earliest opportunity whether it requires any such further information, or perhaps whether it requires this further information in a different form (for example, by way of a guided presentation of the relevant programme).
Clause 4.21.6 and clause 4.21.7 (Relevant Matters)
Clause 4.21 contains two new Relevant Matters, which entitle the Contractor in principle to reimbursement of direct loss and expense:
- clause 4.21.6, relating to epidemics, and
- clause 4.21.7, relating to changes in law, the exercise of statutory powers, and the publication of certain guidance.
(There are also corresponding new Relevant Events in clause 2.26.7 and clause 2.26.8 respectively, which entitle the Contractor in principle to extensions of time.)
However, these Relevant Matters are unlike the others (or any of the Relevant Events, including those in clause 2.26.7 and clause 2.26.8), in the sense that they are optional: if the Parties wish for them to apply, then they must state so against the corresponding references in the Contract Particulars.
The corresponding note within the Contract Particulars provides that if the Parties fail to delete either entry, the default position is that the clauses do not apply.
Whilst this is also referenced at the beginning of both clause 4.21.6 and clause 4.21.7, the Parties are nonetheless encouraged to add both of these Relevant Matters to their respective pre-contract reviews of the Contract Particulars, to ensure that they reflect the agreements reached in principle.
Clause 9.1 (Notification and negotiation of disputes)
The drafting of clause 9.1 was previously included in (the optional) Supplemental Provision 10 of DB16, but now joins the ranks of the Conditions, and is therefore mandatory. It will therefore likely feature more prominently in related disputes.
Its objective is to resolve disputes at an early stage, or better still, to avoid them altogether.
The Parties are first required to notify each other of any matter which ‘appears likely’ to result in a dispute (potentially a rather long list, it is admitted).
Following this notification, the senior executives nominated in the Contract Particulars must meet as soon as they can to negotiate in good faith, and hopefully thereby resolve the dispute.
Properly conducted, these negotiations should often prove considerably quicker and less expensive than the other more formal methods of dispute resolution listed (namely adjudication, mediation, and either arbitration or litigation).
The Parties may therefore wish to consider the following further recommendations, to help ensure that these negotiations are successful:
- The senior executives should first meet before the Parties enter into contract, a time which regrettably often represents the high-water mark of good relations.
- Rather than wait for a dispute to arise (and therefore potentially place great pressure on the subsequent negotiations), the senior executives should meet regularly throughout the course of the project. This should help them gain a better shared understanding of the project, and its potential difficulties.
- Depending on the nature of the potential dispute, it may also be helpful for the senior executives to jointly appoint an independent expert, to help improve their shared understanding.
- When negotiations take place, each senior executive should take an attendance note (or better still, agree a joint attendance note) of the discussions and actions required.
Taken together, these measures should help foster an environment of trust and collaboration, where good faith negotiations and dialogue can still take place, even in the face of multiple and complex disputes.
Further resources
For those working with DB24, and whether acting on behalf of the Contractor or the Employer, further help is at hand.
‘Guide to the JCT Design and Build Contract (2024 Edition)’ is now available in all (right-thinking) bookshops, and offers a straightforward reference to help practitioners understand the rights and obligations of the parties, and to administrate DB24 in an accurate and timely manner:
- Part 1 provides commentary on all the key provisions of the Contract, in plain English. It adopts the same structure as the Contract and includes the relevant extracts to reduce the need for cross-referencing. There is also guidance on current market practice, and recommendations for best practice.
- Part 2 contains over 300 corresponding resources for the administration of the Contract, by both the Contractor and the Employer. It includes notice and other correspondence templates, checklists, and trackers to assist record keeping.
As well as my own modest effort, I would heartily recommend the ever-excellent guides co-authored by Sarah Lupton and Manos Stellakis, which are available not only for DB24, but also for the Standard Building Contract, the Intermediate Building Contract, and the Minor Works Building Contract.
Conclusion
A key feature of both Guides is their shared assumption that DB24 will remain as the gods / the JCT Drafting Sub-committee intended: as far as possible, unamended.
Of course it is recognised that certain amendments will often be necessary, to properly reflect the requirements of individual projects and the parties. Indeed, the JCT’s DB24 Guide provides suggested drafting for a cap on the Contractor’s liability.
However, it is submitted that, after extensive consultation, DB24 preserves and refines the very carefully considered risk allocation between the Contractor and the Employer, and the parties are therefore encouraged, as far as possible, to adopt it as drafted.
Seán Mac Labhraí is a solicitor, and the author of ‘Guide to the JCT Design and Build Contract (2024 Edition)’, available at Routledge.