JCT Minor Works 2016 – What’s New
The JCT have released the first of its 2016 edition of contracts, the Minor Works family. This includes Minor Works Building Contract (“MW”), Minor Works Building Contract with contractor’s design (“MWCD”) and Minor Works Sub-Contract with sub-contractors design (“MWSSD”). JCT chief executive, Neil Gower said “JCT has been working to ensure that the 2016 edition, starting with the launch of Minor Works family, provides a series of essential updates and enhanced flexibility for JCT contract users”.
Below is a list of the main amendments to the Minor Works family of contracts.
Payment
JCT have incorporated a provision for the JCT Public Sector Supplement 2011 that relates to Fair Payment, Transparency and BIM.
The contracts no longer distinguish between interim payments due before practical completion and after practical completion. A new insertion at clause 4.4 (MW and MWCD) means the Contractor now has the right to issue an application stating the sum he considers due to him, whereas in the 2011 version, the payment notices were a job for the Architect or Contract Administrator.
Interim Valuation Dates are introduced and are defined in the MW and MWCD as “each date as specified by the Contract Particulars (against the reference to clause 4.3)”. If not specified in the Contract Particulars, the first Interim Valuation Date is one month after the Works commencement date and thereafter at monthly intervals. These monthly intervals now continue after practical completion up to the date of the final payment. In the 2011 editions interim payments before practical completion were on a monthly basis and on a two monthly cycle after practical completion.
Injury, Damage and Insurance
There is now an extension of (Works) Insurance Option C to allow alternative solutions for tenants and domestic homeowners to obtain Existing Structures cover for Contractors. In addition, they have consolidated within the main text some of the general provisions relating to evidence of insurance, insurance claims and reinstatement work that were previously in each of Insurance Options A,B and C.
The amendment to clause 5.4C MW/MWCD includes more flexible wording to deal with insuring both the works and existing structures.
Termination
The meaning of insolvency at Section 6 of the MW/MWCD has now been consolidated and has incorporated the Housing Grants, Construction and Regeneration Act 1996 (as amended).
The Public Contracts Regulation 2015 has also been incorporated and reflects regulation 73 which lists the requirements for enabling a contracting authority to terminate a public contract.
Construction (Design & Management) Regulations 2015 (“CDM Regs”)
The contracts have been updated to refer to the 2015 version of the CDM Regs and now specifically refer to the Principal Designer.
Other amendments:
• JCT have extended the optional provisions for Collateral Warranties from sub-contractors to include Third Party Rights. They have also changed the way the requirements for Collateral Warranties and/or Third Party Rights are set out – removing part 2 of the contract particulars and replacing it with a separate document: the Rights Particulars.
• The 2016 edition of the JCT Construction Industry Model Arbitration Rules are incorporated into the arbitration clauses.
• New definitions of Contractor’s Person and Employers Person in the MW and MWCD.
• The MWSSD can now be executed as a deed.
• New wording in clause 2.11 of MW and MWCD allows an appropriate deduction from the Contract Sum to be made where the Contractor is instructed not to make good defects.
Parties entering into a 2016 Minor Works Contract should ensure that they understand the differences between the 2011 and 2016 editions before making any commitments. Further, whilst many consultants and contractors consider that the JCT Minor Works family is designed for use without amendment, there are some occasions when a short Schedule of Amendments may be necessary to reflect the commercial reality of the project: we recommend that you always give consideration to amendments rather than simply contracting on an “off the shelf” contract without detailed thought.
It is our understanding that the next JCT contracts that are going to be published will be the Short Form of Subcontract and the Sub-Subcontract, followed by the Design and Build. It is not yet known when this might be and they are not yet available for pre-order. Needless to say, we are regularly chasing JCT for updates and will, in turn, update our readers as soon as we know more.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.