JCT D&B 2024 design liability and fitness for purpose

In the JCT design & build 2016 contract, clause 2.17.1 is the duty of care for design.  The 2016 language is commonly amended to the market standard “reasonable skill and care to be expected of a professional undertaking work similar in nature, scope, location to the works”.

In JCT design & build 2024 the clause has now been split in two:

The first part mirrors the first part of the original 2016 clause, but updated to include clearer drafting and the more usual market standard language for the duty of care we are all familiar with (“the reasonable skill and care….”), but the principle remains the same.

The second part however contains a significant change, with two key elements:

1. The first element being that “to the extent permitted by Statutory Requirements the contractor shall have no greater duty of care than to exercise ‘reasonable skill and care” mentioned above.

We need to think carefully about what this means. It could mean that it is ok to impose a different standard of care, providing there is no prohibition on doing so in statute; if this is the case any different standard would need to be expressly stated in the contract – and we’ll come back to that shortly. Or it could mean that the ‘reasonable skill and care’ obligation applies unless Statutory Requirements impose a different standard. But if that is the case it creates a degree of uncertainty where the implied statutory standard may not exist, or be easily identified.

It is important to clarify which of these two positions applies, particularly given Statutory Requirements will include the standards imposed by the Building Safety legislation.

2. The second element is that “and under no circumstances” will the contractor be subject to any obligation that requires the design to be fit for its purpose.  The ‘and’ in this sentence means the fitness for purpose exclusion appears to stand alone from the first part of the clause – in other words it applies regardless of what the contract or any Statutory Requirements say.   There is clear potential for conflict there.

The fitness for purpose exclusion is relevant to several other areas of the contract, such as

• The requirements included in the Employer's Requirements
• Any performance specification/requirements/KPIs in the contract– such as those relating to sustainability and environmental obligations, or design elements such as fire strategy
• Liability for materials being fit for purpose – and there is an interface with the Building Safety Act and any other fitness for purpose obligations imposed by statute

How the fitness for purposes exclusion is interpreted in the wider context of the contract may impact the overall allocation of design responsibility. For example, if there are obligations in the Employer's Requirements which are (or which one party argues should be construed as), fitness for purpose obligations, the wording of the exclusion in JCT design and build 2024 creates room to argue whether such obligations are subject to the fitness for purpose carve out, and how – where there may be fitness for purpose obligation implied by Statute, whether these are effective and if so, to what extent.

If this clause is to be used in a contract, it would be prudent to expressly identify any ‘fitness for purpose’ obligations, including those implied by Statue, and carve them out from the exclusion to ensure it is clear which standards apply.

A further issue is the availability of insurance: professional indemnity insurers will commonly exclude ‘fitness for purpose’ obligations from the scope of their cover, giving rise to debates about the difference between ensuring design is fit for purpose, and ensuring goods, materials and workmanship is fit for purpose – two very different issues.  At present and in any event we are seeing blanket exclusions from professional indemnity insurance policies for ‘fire safety notifications’ and the issue as a whole appears to be uninsurable.