Contract Practice: JCT 2016

Question 1

What are the main changes in JCT 2016?

Answer 1

• Incorporating and updating provisions from the JCT Public Sector Supplement relating to Fair Payment, transparency and BIM into JCT contracts
• Provisions relating to the CDM Regulations 2015 (first published as amendment sheets downloadable via the JCT website) will be fully incorporated
• The JCT 2016 Edition will reflect the Public Contracts Regulations 2015, with provisions for use by public bodies, contractors and subcontractors on public sector projects
• There are a number of changes in respect of payment, designed to reflect Fair Payment principles and to simplify and consolidate the payment provisions
• Establishing, for Fair Payment purposes, Interim Valuation Dates which will operate at main contract and sub-contract levels
• Under the interim payment due date provisions, the monthly cycle of due dates applicable to payments up to practical completion now continues to apply after practical completion, up to the due date of Final Payment. This change is consistent with a new Loss and Expense ascertainment procedure and with Fair Payment principles
• Revising and simplifying the payment provisions more generally, including introducing a procedure for prompt assessment of Loss and Expense claims, providing further flexibility in relation to Fluctuations Provisions, and consolidating the provisions containing the notice requirements of the Housing Grants, Construction and Regeneration Act 1996
• JCT 2016 will include provisions for the grant of Performance Bonds and Parent Company guarantees and we have extended the optional provisions for the obtaining of Collateral Warranties from subcontractors to include, as an alternative, the granting of Third Party Rights by subcontractors
• Including an extension of (Works) Insurance Option C to allow alternative solutions to the problems encountered by tenants and domestic homeowners in obtaining Existing Structures cover for contractors, and consolidation within the main text of the generic provisions that apply to Insurance Options A,B and C (evidence of insurance, insurance claims and reinstatement work)
• Further changes to improve functionality and user-friendliness across the suite, including minor updates and clarifications of the intellectual property provisions, and incorporating (where appropriate) the provisions of the JCT 2012 Names Specialist Update