Under the JCT Standard Building Contract and the Design and Build Contract, the contractor's right to loss and expense depends on notice. The entitlement clause makes payment "subject to" complying with the notification clause (SBC 4.21, DB 4.20). In 2024, Scotland's Inner House decided that this standard wording is a condition precedent, so a contractor that never notified could not claim loss and expense under the contract.
Who this is for: commercial managers, quantity surveyors and contract managers at contractors and subcontractors working under JCT SBC or Design and Build, 2016 or 2024 editions, who want to know exactly when to notify, what to send, and how the notice gets missed on site.
The clauses, by form and edition
JCT 2024 kept the 2016 clause numbers, so the same references work for both editions:
| Form (2016 and 2024) | Notice of delay | Loss and expense entitlement | Loss and expense notice | Relevant Matters | Other rights reserved |
|---|---|---|---|---|---|
| Standard Building Contract (SBC) | 2.27 | 4.20 | 4.21 | 4.22 | 4.24 |
| Design and Build (DB) | 2.24 | 4.19 | 4.20 | 4.21 | 4.23 |
| SBC and DB subcontracts | 2.17 | 4.14 | 4.15 | 4.16 | Check your subcontract |
JCT withdrew the 2016 edition on 31 March 2026, with a transition period to 31 December 2026 for projects already under way, so plenty of live projects still run on it. Amended versions of both editions are common, so always read your own contract.
What triggers the notice
Notify as soon as the likely effect of a Relevant Matter on regular progress becomes, or should have become, reasonably apparent. Where the loss comes from the employer deferring possession of the site, the test is when the likely nature and extent of that loss becomes apparent.
There's no fixed number of days. That sounds forgiving, but the words "should have become" mean the clock can start when your site team could reasonably have seen the effect, not when the commercial team finally hears about it.
Relevant Matters include Changes, certain instructions, and any impediment, prevention or default by the employer or those acting for it. JCT 2024 added the discovery of asbestos or contaminated material, epidemics, and certain changes in law or statutory guidance after the base date.
What the notice must contain
The notification clause asks for more than a letter saying "we reserve our rights":
- The notice itself, to the Architect/Contract Administrator (SBC) or the Employer (DB, usually through the Employer's Agent), identifying the Relevant Matter.
- An initial assessment of the loss and expense already incurred and likely to be incurred, sent with the notice or as soon as reasonably practicable after it.
- Supporting information that reasonably allows the assessment to be checked.
- Monthly updates to the assessment and information until the amount can be finally ascertained.
The other side then has 28 days from receiving the initial assessment and information, and 14 days from each update, to notify the amount it ascertains, showing where it differs from yours.
A model notice
Adapt this to your contract and project. It isn't JCT wording, and amended contracts often add their own requirements.
Notification under clause [4.21 / 4.20]: loss and expense
Project: [name]. Contract: JCT [SBC / DB] [2016 / 2024], as amended.
We notify that [describe the Relevant Matter, e.g. the instruction issued on 12 September 2026 to redesign the retaining wall at grid C4] is a Relevant Matter under clause [4.22.x / 4.21.x]. Its likely effect on the regular progress of the Works became apparent on [date], when [what happened on site].
We are incurring, and are likely to incur, loss and/or expense as a result. Our initial assessment is [enclosed / will follow as soon as reasonably practicable], with supporting information, and we will update it monthly until final ascertainment.
This notification is in addition to our notice of delay under clause [2.27 / 2.24] dated [date].
Send it as a separate document. A paragraph in a progress report or a line in the meeting minutes invites an argument later about whether notice was given at all.
The case that changed the risk: FES v HFD
In FES Ltd v HFD Construction Group Ltd, the contract was an SBC/Q/Scot 2016 with some bespoke amendments, but the loss and expense entitlement and notice clauses were in standard JCT wording. The contractor had given no notice under clause 4.21.1, and its claim was for around £1.8 million (para 18).
The Inner House held that compliance was a condition precedent to recovery. The contractor's reading, the court said, "would require the court to ignore" the words "subject to ... compliance" ([2024] CSIH 37, para 24).
A few points qualify the decision.
Timing is assessed generously. The court described the timing terms as "relatively flexible" and said that, in deciding whether notice was given in time, a court would no doubt afford the contractor "considerable leeway" (para 25). A late notice is far better than no notice.
It is a Scottish decision. It binds Scottish courts and is only persuasive in England and Wales, where no court has yet ruled on the 2016 wording. JCT's own guidance says it chose not to make notice a condition precedent, as some bespoke amendments do. Commentators disagree on whether English courts will follow FES, so the safe course is to assume they will.
The fallback had been removed. The standard forms keep the contractor's other rights and remedies (SBC 4.24, DB 4.23), which can leave a claim for damages for breach. In FES the parties had amended that clause to remove the common law route, so the contractor lost both ([2024] CSOH 20, paras 46 and 67).
How JCT compares with NEC4 and FIDIC
| Contract and notice | Period | Effect of a late or missing notice |
|---|---|---|
| JCT 2016/2024 loss and expense (SBC 4.21, DB 4.20) | As soon as reasonably apparent | Condition precedent on FES v HFD (Scotland); other rights preserved unless amended |
| JCT notice of delay (SBC 2.27, DB 2.24) | Forthwith, once delay is reasonably apparent | Usually weakens the position rather than ending it, unless amended |
| NEC4 ECC 61.3 compensation event | 8 weeks from becoming aware | Hard time-bar, subject to the Project Manager / Supervisor exception |
| FIDIC 2017 20.2.1 Notice of Claim | 28 days from awareness | Time-barred unless late submission is justified (20.2.5) |
The detail behind the NEC4 and FIDIC rows is in our guides to the NEC4 eight-week notice clock and the FIDIC 28-day time bar.
If you're a subcontractor
The SBC and DB subcontracts follow the same pattern: an entitlement clause (4.14), a notification clause (4.15) and a list of Relevant Matters (4.16), with the notice of delay at 2.17. Read clause 4.14 in your subcontract for the "subject to" wording that decided FES, and check whether the main contractor has amended the notice requirements or timescales.
Where the notice gets missed on site
The first sign of a Relevant Matter often turns up somewhere the commercial team doesn't read in time: a site group chat, a site diary entry, an email thread or a line in the minutes. If the notice goes out weeks later, expect the employer to argue that the effect was apparent long before. Our guide to why contractors lose entitlements to time-bars covers the habits that close that gap.
OnNotice reads site messages, project email and meeting minutes as they arrive. On JCT Design and Build projects it flags events that may be Relevant Matters, treats the loss and expense notification as a hard time-bar so it ranks above the softer notice of delay, and links each flag to the original message, so a person can confirm it and send the notice in time. See how it works.
Sources
- FES Ltd v HFD Construction Group Ltd [2024] CSIH 37, judgment, paras 2 to 4, 18, 24 and 25 (Inner House, 25 October 2024); first instance [2024] CSOH 20, judgment, paras 15, 46 and 67
- JCT, JCT Design and Build and Standard Building Contracts 2016, Part II (loss and expense mechanics, and JCT's view on conditions precedent)
- JCT contents pages for the 2024 editions of the Standard Building Contract and Design and Build Contract (clause numbering; the 2016 numbering is the same)
- JCT, Withdrawal of the JCT 2016 Edition
- CMS, Is notification of loss and expense under the JCT a condition precedent?
- Mills & Reeve, JCT DB 2024: Loss and expense (February 2025), on the new Relevant Matters
This is general information about how the JCT standard forms typically operate, not legal advice for your contract. Notice requirements and their effect are often amended, so have a contracts specialist confirm the position on your project.
Frequently asked questions
- Is notice of loss and expense a condition precedent under JCT?
- On the only appellate decision so far, yes. In FES Ltd v HFD Construction Group Ltd [2024] CSIH 37, Scotland's Inner House held that the unamended JCT 2016 wording, which makes the entitlement 'subject to' compliance with the notification clause, is a condition precedent. The decision is persuasive rather than binding in England and Wales, and JCT has said it chose not to make notice a condition precedent. Contractors should still plan on the basis that no notice means no loss and expense under the contract.
- When must a JCT loss and expense notice be given?
- As soon as the likely effect of a Relevant Matter on regular progress becomes, or should have become, reasonably apparent. For loss caused by a deferment of possession of the site, the test is when the likely nature and extent of that loss becomes apparent. There is no fixed number of days, so the date the effect first showed up on site matters a great deal.
- What is the difference between a Relevant Event and a Relevant Matter?
- Relevant Events can give an extension of time (SBC 2.29, DB 2.26). Relevant Matters can give loss and expense (SBC 4.22, DB 4.21). Some causes, such as Changes, appear on both lists, but the notices are separate: a notice of delay protects time, and a loss and expense notification protects money.
- Did JCT 2024 change the loss and expense notice rules?
- Not materially. The clause numbers and the notice mechanics are the same as in JCT 2016, and JCT 2024 did not settle whether notice is a condition precedent. It did add new Relevant Matters, including the discovery of asbestos or contaminated material, epidemics, and certain changes in law or statutory guidance.
- If I miss the notice, is the money gone for good?
- Not necessarily. The standard forms keep the contractor's other rights and remedies (SBC 4.24, DB 4.23), so a claim for damages for the employer's breach may still be open. In FES the parties had amended that clause to remove the common law route, which is why the contractor recovered nothing. Check whether your contract keeps it.