{"id":12515,"date":"2025-08-01T19:12:15","date_gmt":"2025-08-01T19:12:15","guid":{"rendered":"https:\/\/usaontheweb.com\/clone1\/lawyers-cautious-on-new-jct-pain-sharing-contract\/"},"modified":"2025-08-01T19:12:15","modified_gmt":"2025-08-01T19:12:15","slug":"lawyers-cautious-on-new-jct-pain-sharing-contract","status":"publish","type":"post","link":"https:\/\/usaontheweb.com\/clone1\/lawyers-cautious-on-new-jct-pain-sharing-contract\/","title":{"rendered":"Lawyers cautious on new JCT pain-sharing contract"},"content":{"rendered":"<p>Website design <\/p>\n<div id=\"wrapper_sleeve\">\n<p><img width=\"1024\" height=\"683\" src=\"https:\/\/cdn.ca.emap.com\/wp-content\/uploads\/sites\/8\/2024\/05\/Contract-signing_shutterstock.jpg\"  decoding=\"async\" fetchpriority=\"high\"  alt=\"website design Contract-signing_shutterstock.jpg\"><\/p>\n<div>\n<p>Legal commentators have expressed caution about uptake of a new Joint Contracts Tribunal (JCT) contract family that is designed to share risk.<\/p>\n<p>The Target Cost Contract (TCC) 2024 was released in late June and is designed for larger jobs, where detailed provisions are needed.<\/p>\n<p>Rather than a fixed price, it incorporates what JCT describes as a \u201cpain\/gain operation\u201d where a share based on the difference between a target cost and allowable cost is produced during a project rather than a fixed cost agreed at the start.<\/p>\n<p>The share is based on pre-agreed percentages. JCT said: \u201cThis provides an incentive for both parties to ensure a beneficial financial outcome of the project.<\/p>\n<p>\u201cThis is designed to ensure maximum cooperation and collaboration throughout the project.\u201d<\/p>\n<p>The TCC family includes:<\/p>\n<ul>\n<li>Target Cost Contract 2024<\/li>\n<li>Target Cost Sub-Contract Agreement 2024<\/li>\n<li>Target Cost Sub-Contract Conditions 2024<\/li>\n<li>Target Cost Contract Guide 2024<\/li>\n<li>Target Cost Sub-Contract Guide 2024<\/li>\n<\/ul>\n<p>Lawyers have reacted with a mix of views on the TCC\u2019s provisions.<\/p>\n<p>Pinsent Masons partner Mike Allen appeared sceptical about how popular the new contract family will be.<\/p>\n<p>\u201cJCT have said that there is a market demand for this. That remains to be seen. Many commercial real estate funders and developers are wedded to lump-sum, design-and-build with full risk transfer.<\/p>\n<p>\u201cA move to a more collaborative model of contracting with shared risks may not be a road they are willing to travel unless demand\/supply for contractor resource forces their hand,\u201d he said.<\/p>\n<p>Meanwhile Tim Willis, a senior associate in Irwin Mitchell\u2019s construction team, warned that operating the new contract would not be easy \u2013 and it is not simply a case of moving classic design-and-build schedules onto a new form.<\/p>\n<p>\u201cTarget contracts are resource intensive and managing allowable cost is a significant burden on both parties, but the benefits can be significant in motivating collaboration and innovation from the construction team.<\/p>\n<p>\u201cWhether TCC 2024 has all the mechanisms needed for managing risk is also an open question. The lack of a construction programme and the absence of early warning procedures and a commercial penalty for failing to operate them, such as disallowing costs that could have been avoided, as in the NEC4 ECC Option C and D contracts, may lead to greater risk of cost overrun.\u201d<\/p>\n<p>He added: \u201cSharing the pain is not as good as avoiding the pain. Management of risk will need careful thought.\u201d<\/p>\n<p>Elsewhere, Walker Morris partner Jules Harbage welcomed the TCC as a step towards \u201cmore collaborative, cost-conscious contracting\u201d.<\/p>\n<p>\u201cIf you\u2019re looking for more transparent pricing and alternatives to fixed-price models within the construction industry, this could be a good option,\u201d he said.<\/p>\n<p>\u201cNow is the time for employers and contractors to get familiar with the payment mechanics of this new form, run the numbers, and assess whether this model fits their project strategy.\u201c<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Website design Legal commentators have expressed caution about uptake of a new Joint Contracts Tribunal (JCT) contract family that is<\/p>\n","protected":false},"author":7282,"featured_media":12516,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1166],"tags":[],"class_list":["post-12515","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-website"],"_links":{"self":[{"href":"https:\/\/usaontheweb.com\/clone1\/wp-json\/wp\/v2\/posts\/12515","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usaontheweb.com\/clone1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usaontheweb.com\/clone1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usaontheweb.com\/clone1\/wp-json\/wp\/v2\/users\/7282"}],"replies":[{"embeddable":true,"href":"https:\/\/usaontheweb.com\/clone1\/wp-json\/wp\/v2\/comments?post=12515"}],"version-history":[{"count":0,"href":"https:\/\/usaontheweb.com\/clone1\/wp-json\/wp\/v2\/posts\/12515\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usaontheweb.com\/clone1\/wp-json\/wp\/v2\/media\/12516"}],"wp:attachment":[{"href":"https:\/\/usaontheweb.com\/clone1\/wp-json\/wp\/v2\/media?parent=12515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usaontheweb.com\/clone1\/wp-json\/wp\/v2\/categories?post=12515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usaontheweb.com\/clone1\/wp-json\/wp\/v2\/tags?post=12515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}