The Joint Contracts Tribunal (JCT) Design and Build (D&B) contracts have, for many years, remained one of the most widely used forms of construction agreements in the UK. One of its main benefits, from the client’s perspective, is to create a “one stop shop” for both the design and construction elements of the Works. However, contrary to popular belief, the standard JCT drafting does not necessarily create a single point of responsibility for all of the design of the Works. The effectiveness of the JCT D&B contract therefore hinges on clear drafting and the precise allocation of responsibilities, as highlighted in the case of Workman Properties Ltd (WPL) v. Adi Building & Refurbishment Ltd (ADI) [2024] EWHC 2627 (TCC).
When and why JCT Design and Build Contracts are used
JCT D&B contracts are primarily employed for projects where the employer seeks to delegate design and construction to a single contractor. This is intended to provide efficiency and accountability by ensuring that one entity oversees all aspects of project delivery, from conceptual design to completion.
Employers typically provide “Employer’s Requirements”, detailing their objectives and specifications. The contractor then develops “Contractor’s Proposals” to meet these requirements. However, unless amended, the allocation of design responsibility under the JCT D&B model is subject to crucial caveats:
- The onus is on the Employer to satisfy itself that the Contractor’s Proposals meet the Employer’s Requirements.
- The Contractor is only responsible for “completing” the design of the Works and is not responsible for the contents of the Employer’s Requirements or for verifying the adequacy of any design contained within them.
- Any correction or modification to address any inadequacy or error in the Employer’s Requirements would amount to a variation potentially entitling the contractor to extra time and/or payment.
The case of WPL v. ADI
The dispute between WPL (the Employer) and ADI (the Contractor) arose from a JCT DB 2016 contract (subject to a schedule of amendments) signed in January 2022 for an expansion of the Cotteswold Dairy facilities in Gloucestershire. The project, which included the construction of new cold storage and drainage systems, gave rise to a disagreement over design responsibilities.
At the heart of the case was whether WPL had undertaken to ADI that technical designs had been completed to RIBA Stage 4 (detailed technical design) or BSRIA Stage 4(i) (specific to building services). ADI argued that WPL had warranted the completion of these designs before ADI took over, while WPL maintained that the contract explicitly placed full design responsibility on ADI.
In August 2023 the issue was referred to adjudication. The adjudicator decided partially in ADI’s favour, finding that WPL had warranted to ADI that the design in the Employer’s Requirements had been completed to RIBA Stage 4/4(i) but that such designs had not actually been completed to that stage. WPL challenged the decision, and the case proceeded to the Technology and Construction Court (TCC).
The key issue for determination was the apparent conflict between the express term providing that ADI would be “fully responsible for the complete design…of the works” and whether WPL had provided a warranty as to the completeness of the designs contained in the Employer’s Requirements.
Judge Davies ruled in favour of WPL, affirming that the JCT contract clearly placed complete design responsibility on ADI including the adequacy of designs in the Employer’s Requirements. He emphasised that contractors are obligated to satisfy themselves regarding the adequacy of inherited designs and cannot rely solely on the employer’s assurances unless explicitly warranted in the contract.
The judge stated that ADI’s failure to verify the provided designs or enforce novated consultant agreements contributed to a misunderstanding of the scope of its responsibilities. He concluded that WPL had not warranted the completeness of the designs to ADI and therefore ADI bore the risk of relying on such designs without adequate due diligence.
What lessons can we take from this case?
The ruling in WPL v. ADI provides several key takeaways for parties contracting on a D&B basis:
- Clarity in Design Obligations: This case underscores the importance of explicitly defining design responsibilities in the contract. In particular, the parties should be clear as to whether design risk is to be allocated as per the standard JCT drafting or (as is commonly amended by Employers) the contractor is to assume responsibility for all designs, including those in the Employer’s Requirements.
- Due Diligence by Contractors: Where the Contractor is assuming full design responsibility (which is often the case where the Employer’s key designers are novated to the Contractor), it must conduct rigorous due diligence when inheriting designs. The court’s judgment makes it clear that reliance on employer-provided designs without adequate review exposes contractors to significant risks. In the absence of any design warranty given by the Employer, verification of the design’s completeness and alignment with project goals is critical.
- Risk Allocation and Documentation: This case highlights the potential dangers of amending the standard JCT drafting in order to re-allocate design responsibility. For the D&B model to function as intended, both parties must be clear as to the extent to which they assume design risk.
- Implications of Novation: Where key design consultants are to be novated as part of the allocation of design risk to the Contractor, the consequences of any design deficiency could potentially be pursued directly against those designers under the novated appointments.
Conclusion
Contracting on a D&B basis can offer significant benefits, including streamlined communication, single-point accountability, and the ability for contractors to propose design innovation within the ambit of the Employer’s Requirements. However, contracting parties should be absolutely clear how design responsibility is to be allocated (and whether such responsibility is to be amended from the standard JCT position) in order to mitigate the challenges of managing the risk of inherited designs and interpreting ambiguous contractual provisions.
The WPL v. ADI case serves as a cautionary tale, emphasising that both parties must approach JCT contracts with clarity, precision, and due diligence. By doing so, they can fully leverage the advantages of the D&B model while mitigating risks.
NOTE: In April 2024 the JCT DB 2016 was superseded by the JCT DB 2024. However, the amendments made in the 2024 edition would not have affected the outcome of the dispute.
Should you require support in the drafting, review or negotiation of a JCT contract, or would like to know more about the lasted 2024 editions, please do not hesitate to contact our specialist dedicated construction and engineering team.
