Back to Basics #24 - The Final Statement Under JCT D&B 2016

Back to Basics #24 - The Final Statement Under JCT D&B 2016

Once Practical Completion is achieved the JCT D&B 2016 Contract has a specific mechanism for concluding the account and the Contract.

The “Final Statement” is a document that has force in terms of finalising the account between the Parties and is fundamental in eventually concluding the Contract itself.

Some key points to remember about the Final Statement are;

1. The Final Statement will become conclusive as to the balance due for the Final Payment (Clause 4.24.9 and Clause 1.8.1 refer).
2. The Contractor has 3 months to submit its Final Statement.
3. If the Contractor fails to submit its Final Statement the Employer may give notice to the Contractor that the Employer will issue a Final Statement in lieu of that of the Contractor, if not supplied within 2 months.
4. The due date under (Clause 4.24) is one month after whichever occurs last of End of rectification period (4.24.5.1), the Date stated in the notice of completion of making good (4.24.5.2), or the Date of submission of Final Statement (4.24.5.3).
5. If the Contractor fails to issue its Final Statement the Employer may issue its own Final Statement, whoever has issued the Statement, this Statement is referred under (Clause 1.8.2) and (2.24.6) as the “Relevant Statement”.
6. The effect of the Final Statement at the due date is to become Conclusive Evidence;
   1. That quality (that has been expressly stated to be for the approval of the Employer) of:
      • Any particular materials or goods (Clause 1.8.1.1);
      • Any standard expressly described in the ER's (Clause 1.8.1.2); or
      • On any instruction issued by the Employer (Clause 1.8.1.2).
   2. Also, that the particular quality or standard was to his reasonable satisfaction.
   3. But not any other materials, goods or workmanship; and
   4. Not Conclusive that the design complies with the Contractual Requirements.
   5. All EOT's are deemed Conclusive (Clause 1.8.1.2).
   6. The reimbursement of direct loss and/or expense is also deemed Conclusive (Clause 1.8.1.3).
7. Once the Relevant Statement is issued there is a window of 28 days to challenge its content by way of commencing proceedings.
8. To challenge the Relevant Statement it would appear that two Notices are required:
   • A Notice disputing anything in the Relevant Statement prior to the due date (Clause 4.26.6), subject to (Clause 1.8.2).
   • A formal Invitation of Dispute Resolution Proceedings within 28 days of the date of the Final Statement (Clause 1.8.2).

Failing to follow and understand this process can have serious implications if the stated sum in the Final Statement is not agreed.

Ramskill Martin’s Team of specialist Consultants can help you navigate through this process to ensure that your position is protected and can, if necessary, help with any dispute which arises on the content of a Relevant Statement.

 

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