JCT Design and Build 2016 Section 3: Control of the Works

Section 3 of the new D&B contract, which deals with control of the works, includes a number of new changes, some of which are quite surprising and need close attention by both employers and contractors. A less controversial amendment is the requirement for the contractor to appoint a full-time Site Manager prior to the commencement of any work on site, who will act as the Contractor’s representative and remain on site at all material times. This replaces the obligation under 2011 to appoint a Person-in-Charge which was a considerably less detailed description. Any proposed appointment of the Site Manager (and his replacement) requires the employer’s prior consent, but without the standard requirement not to act unreasonably in withholding or delaying consent. This is a little surprising, but should not be of great concern to a contractor.

Continuing with the theme of consent, as with the 2011 version, the Contractor is still required to procure the Employer’s consent prior to sub-contracting the whole or any part of the works (including any design for the works) but the necessity not to unreasonably withhold or delay such consent has been deleted from the 2016 version. At first glance, this appears to be surprising although in practise it may not be problematic for a contractor unless he has experience of a specific employer who is prone to micro-managing the appointment of sub-contractors and raise objections to appointments at every opportunity. But this does seem unlikely if the Employer is keen to get on and finish the project.

Of greater concern, from an Employer’s perspective, is the deletion of the 2011 wording that the Contractor must remain wholly responsible for carrying out and completing the works, notwithstanding any sub-contracting of the works. Although some new wording has been included which states that any sub-contracting does not “affect” (does that mean diminish?) the Contractor’s obligation under the contract, this may not cover off the previously “all-encompassing” 2011 wording and I would be inclined to put the old 2011 wording into a schedule of amendments.

A further addition to the 2016 contract is the requirement for any sub-contract which provides for collateral warranties to ensure that, where applicable, those warranties (and the underlying sub-contract) are signed as deeds, with the usual 12 year limitation running (most likely) from practical completion of the main works. This is not particularly controversial, although contractors (and sub-contractors) need to be sure that any limitation period in the subby warranty is back-to-back with the main contract. If the sub-contract is utilising third party rights instead of collateral warranties then such rights must vest in the beneficiary (eg, funder, purchaser tenant) on receipt of notice from the Contractor. This is removes any confusion about when the rights vest and does away with any attempt to have the beneficiary respond to the notice before such rights vest.

The final point to make about this section is the inclusion of the 2015 CDM Regulations wording, previously contained in Amendment 1 to the 2011 version. This new wording is more distilled and easier to follow and removes any reference to the now defunct CDM co-ordinator to be replaced with a Principal Designer. One to watch out for in practise is that if the Contractor is appointing another party as Principal Designer then the Employer might want to have a look at the conditions of that appointment and, on high-value projects, procure a collateral warranty from that Principal Designer in the event of contractor insolvency. By the same token, if the Employer is pinning responsibility for the Principal Designer role on to the Contractor having already appointed the Principal Designer, then the Contractor should require that any such appointment is novated over to him.