The year 2024 promises a significant milestone with the release of the eagerly anticipated JCT 2024 contract suite. This new iteration of contracts, as announced by the Joint Contracts Tribunal (JCT), introduces a range of revisions aimed at enhancing clarity, flexibility, and the integration of modern practices within the construction sector.
One of the standout features of the JCT 2024 contracts is the explicit inclusion of provisions for electronic notices. In an era where digital transformation is reshaping business processes, the JCT has taken a progressive step by recognising the importance of electronic communication in construction projects. This adjustment not only aligns with modern practices but also streamlines project management by facilitating efficient exchanges of vital project-related information.
Electronic records can provide a more accurate and comprehensive documentation trail for insurance purposes, simplifying the claims process and aiding in the resolution of disputes.
The proposed JCT 2024 contracts bring a renewed focus on transparency and fairness to the 'Loss and Expense' provisions. By enhancing the clarity of the criteria for claiming loss and expense, these contracts aim to minimise disputes and ensure that parties are compensated equitably for additional costs incurred due to unforeseen events. Clearer language and well-defined circumstances can expedite the claims process and foster better collaboration among project participants.
New Relevant Event matters introduced into provisions to allow for contaminated materials, asbestos and unexploded ordinance, likely as a result of recent caselaw including Allianz Insurance plc -v- The University of Exeter.
Flexibility takes centre stage with the 'Extension of Time' provisions in the proposed JCT 2024 contracts. These revisions acknowledge the dynamic nature of construction projects and provide a more streamlined process for requesting and granting extensions.
Including the ability to select additional grounds for an EoT such as epidemics and the exercise of statutory powers by the UK government which may impact the works.
The time afforded to the Employer to assess interim EoT's will also be reduced from 12 weeks to 8 weeks from receipt of the Contractor's particulars.
The clearer EoT framework not only empowers project managers to manage delays more effectively but also facilitates smoother communication among stakeholders, thereby reducing the risk of disputes and improving project outcomes.
Case law has once again impacted the proposed new terms of the JCT Triple Point Technology Inc -v- PTT Public Company Ltd, confirming liquidated damage clauses apply up to the termination of a contract, with general damages for delay applying thereafter.
Also within the proposed 2024 contract is incorporation of the new JCT Fluctuations Hub, which was launched in 2023. This resource is to help the parties and the sector generally respond to the ever increasing economic uncertainty and volatility in the market, and how to correctly apply the options available under the JCT suite.
The JCT 2024 contracts' shift towards clearer language and better-defined obligations can have a direct impact on insurance coverage and claims. As contract terms become more transparent and parties' responsibilities are better delineated, brokers and insurers may find it easier to assess risk and determine appropriate coverage. Clarity in contract language can also reduce disputes and potential gaps in coverage, providing a solid foundation for insurance claims.
The JCT 2024 contracts encourage collaborative problem-solving, which can extend to insurance claims as well. When disputes arise, parties may find it more beneficial to engage in cooperative resolution processes rather than adversarial proceedings. This approach can potentially lead to quicker settlements and minimised disruptions to the project, ultimately influencing the timing and nature of insurance claims.
The evolution of the JCT contract suite with the proposed introduction of the JCT 2024 contracts holds promise for a more streamlined and collaborative construction landscape, with a focus on future proofing the suite. As stakeholders navigate these changes, it is imperative to recognise the interconnected nature of the new contract provisions, and their implications for insurance claims and coverage. Clearer contract language, electronic communication, flexible project management, and fair payment mechanisms have the potential to align with insurance practices, fostering a more efficient and resilient construction ecosystem.
Disclaimer: This article provides general insights into the potential impact of the JCT 2024 contracts on insurance claims and coverage. It does not constitute legal or insurance advice. For specific guidance, consult legal and insurance professionals with expertise in the construction industry.
