JCT Contract Disputes

The Joint Contracts Tribunal (JCT) is an organisation that serves as a representative entity for a diverse array of stakeholders within the building and construction sectors. The Joint Contracts Tribunal (JCT), established in 1931, has been responsible for the development and publication of standardised material, including contracts and guide notes, intended for use within the construction sector. When encountering the term “JCT contract”, it commonly pertains to a standardised building contract.

JCT contracts are commonly established between an “employer” and a “contractor” in order to streamline the execution of a construction project. The applicable terms and conditions, encompassing the obligations of the concerned parties, the associated costs, and the project’s specifications, were comprehensively outlined. This offers full understanding for all stakeholders regarding the specific tasks, deadlines, responsible individuals, and associated expenses.

Significantly, a Joint Contracts Tribunal (JCT) contract offers a comprehensive delineation of the obligations and duties of each party involved, with the aim of facilitating a seamless execution of the project.

It’s crucial to have an efficient, quick, and effective resolution when construction disputes emerge. With every construction contract, the parties expect that things will go as well as they can from the start and that the job will be finished on schedule and within their projected budget. Projects, however, don’t always go according to schedule. The reputation of the construction sector as a source of disputes is well recognised. The employer might ask for more work, or work might be required if something unexpected is found on the job site. These conditions are likely to cause work to take longer than anticipated, which will often increase the project’s cost. If it cannot be settled through dialogue, one of the parties will frequently file a claim. In the past, parties would enter into litigation, which is an expensive and time-consuming process. To prevent costly litigation, several alternative dispute resolution (ADR) techniques have been developed over time.

In this article, JCT Contract Disputes, we take a look at the options open to you.

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For a free initial discussion with a member of our New Enquiries Team, get in touch with us today. We are experienced in dealing with all the legal aspects of construction dispute resolution. Once instructed, we will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help ensure you are on the best possible footing. Simply call us on 0345 901 0445 or click here to make a free enquiry and a member of the team will get back to you.

Typical causes of dispute

Disputes arising from construction contracts can result in substantial disruptions to a whole project or necessitate expensive rework even after its completion.

It is imperative, both from a commercial perspective and for the benefit of subcontractors, to conduct a comprehensive examination of the contract and carefully evaluate all the probable scenarios delineated in the intricate particulars. By doing a thorough examination of the contract prior to signing, you can adopt a proactive approach to mitigating potential issues.

Here we discuss some typical causes of disputes.

Poorly drafted contracts not only give rise to potential misunderstandings and conflicts, but also increase the probability of legal proceedings and damage to one’s professional standing. Some contracts may include terms or clauses that allocate responsibility to project managers or contractors for events such as cost savings, defects, injuries, and delays, regardless of whether your organisation is at fault. To address this potential risk, it is imperative to enlist the assistance of a legal expert to thoroughly examine and decipher the provisions outlined in these contractual agreements. They possess the capacity to ensure that the language employed distributes the customary hazards linked to construction in a just and impartial fashion.

An additional factor to consider in the process of contract negotiations is the establishment of criteria for assessing the standards of quality in the execution of contractual obligations. While some contracts may have clauses that allow for revisions, others may contain wording that limits flexibility. However, it is important to note that a well-drafted contract should include clauses that allow for adaptability in the face of unexpected events, such as unforeseen delays or disruptions in the supply chain.

Situations exist wherein prospective impediments are not comprehensively foreseen until the project has already commenced. In order to effectively handle such circumstances, project managers should exhibit prudence when it comes to the selection of subcontractors and consultants, ensuring that they possess the requisite knowledge. Furthermore, it is imperative to have clauses within the contractual agreement that facilitate the process of rectification in the event that any inaccuracies or inconsistencies are detected.

Payment disagreements within the construction sector can manifest in diverse manners, all of which are considered undesirable. In the context of extensive undertakings involving several stakeholders, such conflicts possess the capacity to protract judicial proceedings, resulting in project delays and the depletion of precious resources. To mitigate the risk of payment claims, it is imperative to include protective measures and specific delineations within the contractual agreement. This entails the establishment of a clearly delineated schedule and payment benchmarks, while also incorporating measures that permit modifications if necessary. When confronted with a disagreement, particularly pertaining to financial matters, individuals may have a natural inclination to pursue legal action as a means of resolution. However, it is frequently more efficient in terms of time and money to employ standard payment forms that provide thorough documentation and verification of a contractor’s claims.

Alternative dispute resolution

Alternative dispute resolution, which is often shortened to ADR, is the umbrella term given to the various methods used to settle disputes that do not require court proceedings. Many businesses and individuals are eager to solve their disputes in a quick, cost-effective and confidential way, and ADR brings the opportunity to do so.

There are, however, both advantages and disadvantages to all ADR. ADR comes in many forms, and among the more commonly used methods are:

• Mediation
• Negotiation
• Neutral evaluation
• Use of ombudsmen and other regulatory bodies
• Arbitration
• Adjudication

Mediation

Mediation, as a highly efficient and economical approach, offers a means to resolve disputes by facilitating the achievement of a mutually agreeable outcome. By circumventing the need for litigation, with its associated financial burdens and logistical complexities, mediation is an advantageous alternative.

Numerous individuals and businesses choose to pursue mediation as a preferred approach due to its advantageous financial implications. Additionally, a significant motivating factor is the non-binding nature of mediation, which allows parties to reject the agreement if they are dissatisfied with the outcome, without the court being informed of their decision.

Negotiation

Negotiation frequently serves as the initial course of action, entailing the act of addressing the individual or entity involved in the conflict to ascertain their willingness to engage in the process. Subsequently, one proceeds to engage with them in a direct manner. Mediation is widely recognised as a highly effective method for resolving conflicts, as it can be implemented at any point during the dispute resolution process. Additionally, employing this approach proves to be quite advantageous in maintaining a favourable business rapport with the respective individual or entity.

Neutral evaluation / Early neutral evaluation

This procedure involves providing the involved parties with an initial evaluation of pertinent facts and information, so establishing the groundwork for subsequent negotiations. The process entails the engagement of a third party, sometimes referred to as a neutral, who is responsible for delivering a well-founded assessment of the evidence presented to them.

Use of ombudsmen and other regulatory bodies

After the internal complaints system has been concluded, matters may be escalated to an ombudsman, who will render a decision or provide a recommendation based on the facts submitted to them. This ruling lacks legal enforceability, allowing for the possibility of pursuing the subject in a court of law if necessary. However, it is important to note that the court will consider the aforementioned ruling as a relevant factor in its ultimate determination.

Arbitration

Arbitration, a frequently employed mechanism in construction-related conflicts, is a formalised process regulated by statutory provisions. It entails the arbitrator’s comprehensive consideration of all evidence presented before rendering a legally binding decision.

Adjudication 

This is frequently employed in relation to particular issues within a conflict prior to the parties involved reaching a resolution or engaging in legal proceedings or arbitration. Utilising alternative dispute resolution methods can frequently offer a quick and cost-effective means of resolving conflicts.

How we can help

We have a proven track record of dealing with construction contracts and dispute resolution. Not only does our construction department have extensive legal experience and knowledge of construction law but we also have the benefit of chartered surveying experts. The nature of construction disputes often involves potentially complex areas of law. We will guide you through the process and ensure all checks are carried out swiftly and efficiently. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.

How to contact our Construction Solicitors

It is important for you to be well informed about the issues and possible implications of construction contracts and dispute resolution. Expert legal support is crucial in terms of ensuring a positive outcome to your case.

To speak to our Construction Solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.

Authored by Ben Posted in Blog, News Tagged as

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