Jeff Brown claims third-party rights don’t work (27 October, page 54), but his objections come down to not liking the particular third-party rights in the JCT contract.
JCT third-party rights could be improved upon, but are they as bad as Brown says? Yes, beneficiaries often reject a net contribution clause, but not all the JCT third-party rights schedules have one. When it comes to maintaining professional indemnity cover, why would the contractor be obliged to do so under third-party rights unless he were similarly obliged under the building contract?
If it is true that the third-party rights will have nothing to “bite on” where the terms of the building contract have not been agreed, the same is likely to be true of a collateral warranty. As for “the need to obtain warranties from consultants”, what need? Third-party rights are just as suitable for consultants’ appointments.
If you do not like the particular third-party rights granted by the JCT, amend them. I do not think they would necessarily have to be “heavily amended”, but since when have lawyers been deterred from heavily amending JCT contracts? If necessary, replace them with your own third-party rights.
Alan Erwin, Fladgate Fielder