The launch of the UK’s new JCT Major Project Form (MPF) of contract in June 2003 was, so those who drafted it say, designed to fill a void in the market and allow major contractors and developers to move away from the ever-increasing raft of bespoke amendments that were being made to the JCT 98 form on high value major commercial developments. At face value therefore, the new form is a product of the marketplace’s needs and requirements rather than a simply theoretical and commercial exercise. That should make the new form is a product of the marketplace’s needs.

THE MPF comprises the following six parts: the Contract Conditions, the Appendix, the Third Party Rights Schedule, the Requirements, the Proposals and the Pricing Document. Helpfully, there is also a Guidance Note but be warned, this is not a contract for the inexperienced to work through. The MPF’s promoters have been at pains to emphasise that sophisticated parties on contracts of at least £10 million are the target market and that those contractors using the form should fully understand and embrace “single point responsibility”.

Design – all design beyond that contained in the Requirements will be produced by the Contractor with the Employer having the right to review and comment. Clear enough perhaps, but no doubt open to charges of the Employer either interfering or failing to do enough, depending which side of the fence you sit on. However, more fundamental is the option to introduce a fitness for purpose provision in addition to the usual requirements for skill and care. Overall, the MPF places increased risk on the Contractor and again experience is required to ensure the Contractor has adequately addressed this in his tender. There is a need for clear identification of the risks and demands of the project at tender stage to ensure pricing is accurate.

Time – the provisions for extension of time exclude adverse weather, industrial disputes, labour/material unavailability and delays caused by statutory authorities. This reflects current commercial reality on major projects. Again, provided this is taken on board early and understood, the contractor can price the risk. The familiar term “Relevant Event” will no longer be found. If a potential EOT situation does arise, concurrent delay is addressed in line with the approach adopted in the much heralded SCL Delay and Disruption Protocol and will lead to an adjustment to the completion date. A definition of Practical Completion is included and occurs “when the Project is complete for all practical purposes”. Of course it is a good thing to try to define, but in those nine words alone no doubt the cynically minded could cause significant mischief.

Changes – the MPF includes a Change Procedure requiring the Contractor to give details of likely costs and impact on completion first of all. The intention is of course to promote agreement of cost up front prior to an instruction being issued. Given the design obligations and intentions of the new MPF, it is hoped that the incidences of old-style contractor claims for time and money will reduce significantly.

Incentives – in any business, it is of course widely recognised that “a stick without a carrot” is no incentive at all. The MPF has made laudable attempts to give the Contractor suitably enticing vegetable appetisers by use of bonus and cost saving clauses, as well as an acceleration provision. These are all part of the intention to try to move away from the old problems and divisions between employer and contractor, and move towards a scenario where the parties work for the benefit of the project knowing from the outset the risk/reward consequences that could be available.

Dispute mechanisms – unsurprisingly nothing quite so radical as removal of these on the basis that no disputes will occur, but the MPF does use a series of rising levels of mechanism including mediation, adjudication (under the Scheme) and ultimately litigation.

It is widely anticipated that the new MPF form will take over from the JCT 98 form on major projects but is it sufficiently fair to stop a whole new series of amendments being brought into play by those using the form? Probably, provided those using it are experienced and understand exactly what the pros and cons are for each party to the contract. The mechanisms and provision are there to enable both sides to enter the agreement with eyes wide open, knowing what risk they are taking on. The need for amendment should be minimised if the right mindset is present. The industry has asked for clarity and single point responsibility – it is just possible it might get it under this new form.

Paul Taylor is an Associate with Beachcroft Wansbroughs Solicitors Construction & Engineering Group in Manchester (tel: 0161 934 3014, email: ptaylor@bwlaw.co.uk)