Navigating JCT Final Accounts

The JCT Design and Build Contract 2024 (“JCT D&B”) final account process seeks to achieve certainty for the parties over the final amount payable to the Contractor. A recent case highlights the importance of developers and contractors notifying each other within the contractual timeframes under clause 4.24.6 if they wish to challenge the amounts in a Final Statement.

The JCT final account process 

Clause 4.24 of the JCT D&B governs the final account process under which the parties arrive at the final figure due to the Contractor for the works. 

The Contractor is obliged to submit its Final Statement to the Employer (with such supporting documents as the Employer may reasonably require) within three months of practical completion. If it does not, the Employer can give notice that unless the statement is submitted by the Contractor within two months, the Employer can issue a final statement itself. In practice, once either the Contractor or the Employer has produced a Final Statement, the parties will negotiate the contents of the statement with a view to arriving at a final account figure which is due to the Contractor (or potentially to the Employer where the adjusted Contract Sum is less than the total of the amounts previously paid). 

The due date for the final payment is the latest of one month after (i) the end of the Rectification Period, (ii) the date in the Notice of Completion of Making Good, or (iii) the date of submission of the Final Statement by the Contractor (or the Employer’s Final Statement if the Contractor does not submit a statement). The paying party must then give a Final Payment Notice within five days of the due date, and the final date for payment is 14 days from the due date. Any Pay Less Notice must be given no later than five days before the final date for payment.

The final account becomes conclusive 

Clause 4.24.6 provides that except to the extent that prior to the due date for the final payment, either party gives notice to the other disputing anything in the Final Statement, the relevant statement becomes conclusive on the due date as to the amount due for the final payment. Therefore, unless the Employer gives notice disputing the Contractor’s final statement in time, the Contractor’s statement will be binding as to the amount due to be paid to the Contractor.

Clause 1.8.1 also provides that on the due date for final payment the Final Statement becomes conclusive evidence that: 

• the quality of materials or goods or any particular standard of an item of workmanship described in the Employer’s Requirements or in any instruction was to the Employer’s reasonable satisfaction (but is not conclusive evidence that they or any other materials, goods or workmanship comply with any other requirement or term of the contract);
• all extensions of time as are due have been given; and
• all loss and/or expense due to the Contractor agreed, ascertained or valued is in final settlement of any claims the Contractor has arising out of any of the Relevant Matters under the contract.

This means that once the due date has been reached, the Final Statement binds the parties. Neither party can reopen the amount due or any applicable extensions of time, and the Employer cannot argue that the quality of materials or standards of the work is not to its satisfaction. The parties both benefit from the certainty that the cost of the works has been closed at the point the Final Statement becomes conclusive. 

Both clauses 4.24.6 and 1.8.1 are to be read in the light of clause 1.8.2 which suspends conclusivity where proceedings are started. 

When using the JCT Standard Building Contract 2024 (“JCT SBC”), rather than the JCT D&B, the parties should note that there is no equivalent to clause 4.24.6 which would allow the Contractor to issue a notice disputing anything in the Final Certificate (which under the JCT SBC, must be produced by the Architect/Contract Administrator) and therefore the Contractor would need to commence proceedings to avoid conclusivity. 

How and when should an employer challenge a contractor’s Final Statement?

The recent decision in Oakland Wantage Care Home Ltd v Stepnell Ltd [2026] EWHC 1530 (TCC) confirms that the Employer must give notice under clause 4.24.6 after the Final Statement is issued by the Contractor to avoid the statement becoming conclusive. Any prior correspondence raising issues which are later covered in the Final Statement will not be sufficient to act as notice under clause 4.24.6.

The parties had entered into a JCT D&B 2016 contract and practical completion was certified in April 2021. The Contractor issued a final account statement on 17 February 2022 (the "February 2022 Statement") which the Employer's Agent swiftly responded to disputing the amounts set out in the Contractor's statement. The Contractor issued a further statement on 9 February 2024 (the "February 2024 Statement").

On 25 March 2024, the Contractor referred a dispute to adjudication seeking payment of the sum in the February 2024 Statement in the absence of a Final Payment Notice or Pay Less Notice. The adjudicator held that the February 2024 Statement was the relevant statement for the purposes of clause 4.24.6 and determined that the sum set out in that statement was due and owing to the Contractor.

Proceedings were then commenced. The court had to consider whether the February 2022 Statement or the February 2024 Statement was the relevant statement for the purposes of clause 4.24.6.  The court decided that because the February 2022 Statement was headed “draft” and contained “forecast information” including provisional figures, a reasonable recipient would not have regarded it as the formal Final Statement under clause 4.24. Therefore, the February 2024 Statement was the relevant statement.

On the question of conclusivity, the Employer argued that the court should declare that the February 2024 Statement was not conclusive as to the matters set out at clause 4.24.6 and clause 1.8 of the contract on the basis that there were sums set out in the February 2024 Statement that were disputed prior to the due date. The court disagreed, holding that because clause 4.24.6 required notice disputing something “in” the Final Statement, the Final Statement itself must have been issued before such notice could be given. Therefore, all the correspondence sent before the issue of the February 2024 Statement, including the March 2022 response from the Employer's Agent, could not be effective notice for the purposes of clause 4.24.6.

Concluding remarks

Developers must therefore ensure that where they wish to challenge something in the Contractor’s Final Statement under clause 4.24.6, they do so after the statement has been issued. The fact that an issue has been raised in previous correspondence will not be enough to prevent the amount in the Final Statement becoming conclusive under clause 4.24.6. Any notice should clearly state that it is given under clause 4.24.6 to avoid arguments over its effectiveness.

Where a draft final account is issued and negotiated soon after practical completion, the parties should make clear that anything shared in that process is not the definitive Final Statement. The developer should also reissue a clause 4.24.6 notice whenever the Contractor produces a revised Final Statement, to avoid the issues that arose in the Oakland dispute.