UK: UK Construction Contracts And Procurement Round-Up

Last Updated: 2 May 2018
Article by Mark Macaulay, Jane Miles, Shaun Tame and Kirsti Olson

Our round-up of news relating to contract issues and the standard form contracts commonly used in the construction industry.

JCT update: goodbye 2011, hello 2016

For those who use the JCT 2011 edition regularly, change is on the doorstep. JCT Contracts Digital Service (CD) users should note that the JCT 2011 contracts will be archived from the end of April 2018. The hard copy version of JCT 2011 contracts will remain available until the end of April only.

If you have not yet considered the JCT 2016 edition, now is the time to do so!

You can read about the key features of JCT 2016 in our article of July 2017: JCT 2016: evolutionary not revolutionary – a missed opportunity?

If your team needs training on using the latest edition, contact Jane Miles.

FIDIC second edition, 2017, Red, Yellow and Silver Books launched

Since our last briefing in November 2017, FIDIC has launched the second editions of the Red, Yellow and Silver Books in the 1999 suite of contracts. The changes made to these FIDIC contracts for major works (the so-called "rainbow suite") are extensive, wide-ranging and cement the contracts' place as highly-valued standard forms for use on construction and engineering projects.

The amendments almost double the size of the contracts and bring more transparency, clarity and certainty to the provisions. FIDIC's key aims in making the changes were to: reduce the scope for disputes by focusing on dispute avoidance; reflect current international best practice; enhance project management tools and mechanisms; and address issues that have arisen over the years in relation to the 1999 editions.

The risk allocation and the underlying principles of balancing the risk sharing have not been affected fundamentally by the changes. However, the administrative burden on the parties has increased with more emphasis on the prescribed action that parties must now take. Detailed procedural steps are set out as well as the consequences of lack of action.

Key amendments, which are similar across the three new books, include the following:

  • Changes are made to the terminology and formatting and to improve consistency across the suite. For example, the contracts distinguish between "claim" and "dispute" to emphasise the difference between dispute avoidance and resolution and the process of making a claim. "Notice" is now a defined term., "Review" is also a new term and there is a new provision on how to interpret the contract.
  • Changes are made to avoid disputes about whether a party has given a proper notice under the contract, which is important given that 70 or so of the sub-clauses have notice requirements.
  • Additional time limits have been added as have time-bars, which result in a loss of rights if not complied with. Five of the time-bars apply to the dispute resolution and claims processes.
  • More detailed requirements in relation to the Programme are set out.
  • The payment mechanism remains largely the same except for amendments to improve clarity in the provisions.
  • Provisions dealing with bribery and corruption are included enabling contracts to be terminated or staff removed if found to be engaging in corrupt, fraudulent, collusive or coercive practices.
  • Guidance notes have been included to address building information modelling and advise users of issues with which the contract should deal.
  • Enhanced contractor's design obligations, changes to limits on liability and express terms to deal with concurrent delay are also included.
  • Terms dealing with compliance with applicable health and safety laws and other such obligations as well as requirements in terms of quality management and compliance verification have been expanded.
  • The claims process and the process for avoiding and resolving disputes are dealt with separately as a means to encourage the latter by negotiated settlement, for example, and to underline the difference between a claim under the contract and a dispute. Employers and contractors are now subject to the same claim process and this process is set out in detail.
  • A dispute avoidance/adjudication board (DAAB) is set up – thereby placing the focus on dispute avoidance while retaining the option of amicable settlement. Failure to comply with a DAAB decision can be referred to arbitration under the contract.
  • The amendments introduce FIDIC's "Golden Principles" (in the guidance notes), to which drafters must have regard when amending the general conditions of contract.

The first editions remain available for use. For guidance on using the new FIDIC forms, please contact Mark Macaulay or Shaun Tame (see the key contacts).

Second edition, BIM Protocol released

The second edition of the Building Information Modelling (BIM) Protocol (the Protocol) has been released by the Construction Industry Council (CIC). The new edition of the Protocol reflects the current standards and practices for using BIM. It was prepared by Beale & Co for the CIC with the support of the CIC BIM Forum, the CIC Liability Panel, King's College Centre of Construction Law and other organisations such as the JCT, the NEC, .be, BSI, the ACE and other consultees.

The Protocol, which was drafted for use with all common construction contracts and supports BIM working at Level 2, remains the only standard UK BIM protocol. It provides guidance in four sections at the start of the Protocol including an explanation of the changes made in the second editions, how to use it and what items appear in the appendices.

Click here to access the CIC's webpage and the Protocol.

Government launches a simplified Public Sector Contract

The Government Legal Department (GLD), in collaboration with the Government Digital Service and DLA Piper, has condensed the Crown Commercial Service Contract into a slimmer Public Sector Contract. This exercise was carried out to make it easier for small and medium-sized enterprises (SMEs), which may not have ready access to legal advice or wide procurement experience, to bid for work.

The focus on using plain English and avoiding legalese means that SME bidders will no longer have to plough through complex, long contracts. The new contract should save government money too. Provisions that are only used infrequently have been moved into modular schedules. SMEs will be able to choose the elements of the contract appropriate to their works. The new contract also includes some new corporate social responsibility obligations.

It is expected that public sector buyers with access to legal teams will adapt the new contract to suit their own specialised requirements.

(Source: GLD lawyers open up £12bn of government work to SMEs)

Welsh government to use project bank accounts

At the end of 2017, the Welsh government launched a new project bank accounts policy "to support ethical business practices in government-funded construction, infrastructure and service contracts". An updated procurement advice note and guidance, which public sector bodies are being encouraged to use, was published in December 2017 to support the policy.

The Welsh government intends to lead by example and will, from 1 January 2018, use project bank accounts "unless there is a compelling reason not to do so, on all conventionally-funded construction and infrastructure contracts and service contracts fully or part-funded by the Welsh Government with a value of £2m or more, which are delivered by the Welsh Government".

In making the announcement, Mark Drakeford, Cabinet Secretary for Finance, thanked the Specialist Engineering Contractors' Group in Wales for raising awareness of the challenges faced by many sub-contractors in securing payment. The commitment to project bank accounts is intended "to deliver fairness and to enable smaller businesses to prosper through delivering contracts in Wales".

(Source: Written Statement – Project Bank Accounts, 6 December 2017. You can access the procurement advice note and guidance referred to above through this link also.)

You can read more about what the UK government is doing in relation to late payment issues here: The latest measures to deal with late payment issues on UK construction contracts.

The Contract (Third Party Rights) (Scotland) Act 2017 now in force

Scots law has always recognised that a contract can create an enforceable right in favour of a third party. This is known as a jus quaesitum tertio (JQT). The Scottish position is in contrast to the position in England and Wales, where, before the introduction of the Contracts (Rights of Third Parties) Act 1999, the doctrine of privity meant that only the contracting parties could have rights arising out of their contract.

Despite the existence of a JQT, case law has created onerous requirements for its application, including a requirement that the right in favour of the third party must be irrevocable. Consequently, JQTs have not proved that useful on Scottish building contracts.

Following recommendations made in July 2016 by the Scottish Law Commission (Report No 245), the Contract (Third Party Rights) (Scotland) Act 2017 came into force on 26 February 2018. It enables third parties to enforce contract undertakings made for their benefit. Parties can choose whether to exclude third party rights from their contract but it is expected that collateral warranties (although no longer needed) will still be used in Scottish construction projects. At present, it is unclear whether third parties will be able to adjudicate.

The key features of the new law are set out in Kirsti Olson's article: Third party rights in Scotland – all change? (This article was first published in Construction Law on 1 March 2018.)

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions