Keeping up with the times – do the JCT contract changes go far enough?

Although these clauses appear in the Supplemental Provisions to the DB 2016, these were deemed to be included in the contract unless the parties stated otherwise. The Construction Industry Council states that the built environment and construction sector accounts for 38% of global carbon emissions, so moving these provisions to the Conditions highlights the necessity for contractors (and the industry generally) to consider environmental factors in their works rather than them potentially being an ‘optional’ extra. However, some might consider this a missed opportunity to robustly address the environmental impact of our industry, given that the substantive amendments are limited.

Inclusion within JCT contracts:

The JCT has committed to modernising its contracts by adopting the use of gender-neutral terminology and removing references to ‘he’ and ‘workmen’ throughout. There were approximately 297,000 women working in the UK construction industry in the fourth quarter of 2023. The exact figure of those working in construction who identify as LGBTQ+ is unclear as many LGBTQ+ construction workers in the UK hide their identity for fear of discrimination, but this change to the JCT contracts is likely to be a welcome amendment, bringing the JCT in line with other standard forms of construction contract, and is considered long overdue.

Modernisation:

The JCT has amended its ‘Note of Execution’ to recognise electronic signatures as a valid method of executing a contract, stating that the practice of electronic execution has been growing in recent years and is now commonplace. Electronic signatures have indeed been ‘the norm’ since the pandemic, and these changes to embrace electronic signatures are likely to be encouraged by the industry, which has been using electronic signatures for some time. It is worth noting, however, that electronic signatures will not be appropriate for use in every transaction, and hard copies of the contracts will remain available.

Notification provisions have also been updated to allow for notices to be sent by email, including default and termination notices where the parties specify in the Contract Particulars. Email notice provisions have become more common in commercial transactions, and it has been suggested that email can satisfy a statutory requirement for a signed, written notice unless the contract or statute provides otherwise. However, the 2024 changes appear to do little to mitigate the risks involved with serving a notice by email, including:

• Interception by a third party: there is only a requirement for one email address to be provided in the Contract Particulars. It is advisable that two email addresses are provided, and that such email addresses are regularly monitored so that any notices are picked up in good time.
• The email arriving late or not at all: service by email shall be deemed to have been received on the next Business Day after the day on which it was sent. However, there are no provisions to cover what happens if the email arrives several days after the date on which it was sent, or where it does not arrive at all.
• The email arriving but being unintelligible: there are no provisions addressing what happens if an email arrives, but the contents are unintelligible, either due to technical issues or interception by a third party.
• Suspicions as to whether some jurisdictions trust emails over formal, written documents, or suspicions as to whether it is easier to forge or falsify emails over hard copy documents: such scenarios will need to be considered on a case-by-case basis.
• Fears that a validly served email may be overlooked or missed: there is also no provision as to what happens if a validly served email is not seen by the recipient.

Parties wishing to mitigate such risks will need to amend the standard form with robust mitigations to address these risks.

Is JCT 2024 keeping up with the times?

The updated JCT contracts go some way to addressing some of the current concerns held by (or about) the construction industry. The fact that the environmental Supplemental Provisions have moved to the main body of the contract seems to be a nod to their importance but does little to change the substance of the contractual obligations. The JCT’s move to modernise contracts through gender-neutral terminology, and the embracing of technology will also be welcomed by the industry. However, more work is required at the drafting and negotiation stage to ensure that any risks are sufficiently mitigated and good contract administration will be necessary to ensure that these factors are considered and monitored throughout the lifetime of the contract.

If you need any legal advice on the updated JCT 2024 contracts, get in touch with our construction lawyers.