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The poor old JCT Minor Works 2016 edition was published in June this year to minimal fanfare.  Everyone advising on construction law will no doubt get terribly excited when the big boy editions come out (i.e. the Design & Build, the Intermediate and the Standard Building Contracts, along with all the various other types based on these) later this year.  But the JCT Minor Works contract is significant for many contractors. The JCT itself recommends the contract for use when the work is simple, designed by the employer (or probably more often his architect) and when the architect is to administer the contract (it almost sounds like a description of a remedial class at primary school).  Usually, the value of the works would be under £500,000 with no design element (£500,000 being a reasonably significant amount of money for many contractors, of course).

Anyway, the powers that be at JCT have upgraded the contract from the old 2011 version and made some changes that improve things for contractors.  Many of the changes have already been amended as a matter of routine and, in the case of at least one amendment, implied as a matter of law anyway. 

Payment

Probably the most obvious changes relate to payment, which incidentally will be what contractors and employers probably care most about.

First, the distinction between interim payments before practical completion and interim payments after practical completion has been effectively removed.  No doubt when the drafters of the 2011 edition provided that interim payments after practical completion should be paid in two-monthly intervals there was a good reason for doing so, but that justification has now gone. 

There is also a chance of regime as to when payment due dates arise.  The old clause 4.3 provided that the due date occurred at intervals of 4 weeks from the date of commencement, which was a bit annoying (and sometimes in practice ignored) because the main contract would usually work on a monthly basis, meaning that everything could potentially get out of sync.  The new clause 4.3 provides that the due date is 7 days after the interim valuation date, which is a date that should be provided in the main contract.  That way everything marries up between contracts.  Industry-types would probably describe it as something like "harmony down the supply chain”.

Contractors are also now contractually allowed to make an application for payment.  Under the old edition, it was rather assumed that the architect would simply issue an interim certificate, and indeed this is what sometimes happened in practice, but other times the contractor would issue an application for payment and particularly pedantic contract administrators would get terribly upset about that.  Now the contractor has a nice clear ability to issue an application for payment under clause 4.4.  The contractor’s ability to issue a payment notice in the absence of a certificate from the contract administrator remains in place.

Termination

The Public Contracts Regulations 2015 were implemented last year in order to give effect to an EU Directive.  As I said in my post on Brexit, this is another example of a piece of law that will remain in full force even if we took the extreme route and completely pulled out of the EU tomorrow with nothing in its place.

Anyway, regulation 73 provides that certain termination provisions should form part of public contracts (e.g. a contract with the local council, etc).  In practice, most JCT contracts were amended by the public authority before being signed up to, and even if they weren’t, they were implied by regulation 73(3) anyway.  However, it is useful to have the termination provisions set out properly at clause 6.6.

There is also a new termination provision at clause 5.7 when there has been a material loss of or damage to an existing structure.  The wording here seems to be to be an open invitation to litigation (referring to “just and equitable” circumstances and “material” loss or damage), though hopefully rules on proportionality will prevent too much money being spent on arguing over this particular contract.  The position may be different in relation to the big boy contracts coming out later this year.

Insurance

A new clause 5.4C gives a bit more flexibility in terms of insurance.  I understand that this was effected to remedy a concern of tenants wishing to do work on multi-let properties.  The guidance notes to the 2016 edition specifically refer to circumstances where the employer is a tenant and structures cover is effected by the freeholder or an intermediate lessor.

2016 Arbitration Rules

The 2016 edition specifically refers to the Construction Industry Model Arbitration Rules, which should govern an arbitration under this type of contract.  Their incorporation are to be expected, given that JCT publish those rules.

No doubt there will be much more to go through once the other JCT contracts are published later this year, but for the lowly contractor engaged in minor works, this new edition will be very important.