JCT Design and Build Contract 2011 - what's new?

• New payment procedure – this means new notices and names for those notices – users must familiarise themselves with this.
• The contractor has the initiative in the payment process. The employer pays what the contractor asks for if he or she does not follow the new payment process or if he or she fails to issue a notice correctly. Note, this is a return to the position under the JCT 1998 Design and Build Contract.
• New definition of insolvency – again something to review and become familiar with.
• Impact of insolvency of a party is that there is no obligation to make payment.

What has not changed?

The contract is notable for what has remained the same:

• design liability – the formula remains the same as with the previous iteration of the contract;
• management and control of the works – essentially remain unchanged;
• alternative payment options – the notices may be different but the principles of interim payment based on defined dated or defined works being completed remains.
• Schedule 2 – the innovations and improved methods of working they can assist with are still there in Schedule 2 for those who are prepared to adopt them even in the present market.

Payment and the consequence of not changing to the new form

This payment provisions of the contract have been comprehensively revised to accommodate new legislation – specifically the revision to the Housing Grants Construction and Regeneration Act of 1996 by the Local Democracy, Economic Development and Construction Act of 2009. In order to deal with the changes users will need to become familiar with the new terminology and sequence of events that the contract provides.

Users tempted to change the contract are likely to find that their amendments will not comply with the legislation. If terms do not comply with the legislation then the Scheme for Construction Contracts will apply – this will also be the single largest factor driving migration from the old form to the new as the old forms are not designed for the new legislation.

Users in the UK considering Design and Build 2005, its revisions or indeed any of the older forms must beware. In short if an old form is used for a contract agreed after the commencement of the Local Democracy, Economic Development and Construction Act 2009 users will find that the payment clauses do not comply with the new legislation. In those circumstances the Scheme for Construction Contracts will apply in their place.