The Scotsman

Builders get ready for new ‘kilted’ contracts

◆ Legal frameworks for constructi­on work is changing, explains Ian Mccann

- Ian Mccann is head of constructi­on and engineerin­g at Shoosmiths for Scotland and Northern Ireland

For m al building contracts area fundamenta­l part of any constructi­on project, specifying the contractua­l obligation­s on all parties, avoiding any ambiguitie­s and the need for third party interventi­ons that can add to project costs and timescales.

The joint contracts tribunal (JCT) in England & Wales was establishe­d in 1931 to create a contractua­l framework for constructi­on works. Numerous revisions, reflecting market changes, have followed. The jct design and build( jct D&b )2024, the first of the new suite, was launched in April, providing an update on the establishe­d legal frameworks.

While the full suite will be published over the coming months, notable changes are already apparent. This includes with regards to the recent Building Safety Act 2022 – specifical­ly concerning the Act’s effect in England. The JCT appears to have adopted a balanced approach in their revisions, undertakin­g an evolution rather than a wholesale rewrite. market trends, including industry issues caused by C ovid, have also influenced the JCT’S approach.

These latest JCT building contracts aren’t applicable to the constructi­on industry in Scotland. Rather, it’s the responsibi­lity of the Scottish Building Contracts Committee(sb cc) to review the suite of building contracts produced by the JCT and to subsequent­ly produce “kilted” contracts that are compliant under Scots’ Law.

Relevant parties need to be cognisant of these key changes.for example, amendments have been made to the timetable and procedures for dealing with extensions of time. A new Relevant Event has been introduced for epidemics and the exercise of statutory powers has been expanded. Revisions have also been made to the terminatio­n accounting and payment provisions. It should be noted that in the new contract, the JCT “acknowledg­es that increasing­ly limitation of liability is being used as a tool to address the apportionm­entof risk” and includes an option for an overall cap on liability, reflecting recent market trends.

Other JCT amendments include introducin­g supplement­ary provisions around collaborat­ive working, sustainabl­e developmen­t and environmen­tal considerat­ions. Notificati­on and negotiatio­n of disputes is now incorporat­edinto the main contract, rather than being an option. The jct has also adopted gender neutral language. and parties can also specify their own Adjudicato­r nominating body or Arbitrator appointer body.

The contracts now also incorporat­e new powers for the Employer in Clause 3.15 in relation to discoverie­s of asbestos, contaminat­ed materials and unexploded ordnance (UXB’S). This is pertinent to Scotland’s constructi­on industry, as developmen­t in areas like along the Clyde in Glasgow could unearth bomb sand affect constructi­on time scales.

Equally, asbestos issues continue to arise in Scotland as old inner-city buildings are repurposed to create new hotels, office blocks and purpose-built student accommodat­ion. Its discovery can also impact on cost and time scales.

With the SBCC not expected to announce its amended kilted contracts before 2025, it’s likely Contractor­s will neverthele­ss adopt many of the new provisions in their Scottish contracts before they are formally adopted here. This scenario may lead to some interestin­g contractua­l discussion­s in the months ahead.

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