In the fast-moving world of construction, decisions around cost and risk allocation often come down to the fine print. One recurring issue we see at DRS (Dispute Resolution Services) is confusion between design development and design change (or variation).
While these terms may sound interchangeable, the financial implications of getting them wrong can be substantial.
This article is part of a new DRS blog series offering bite-sized insights into topics we regularly encounter. Whether you’re a contractor, employer, or consultant, investing a few minutes in understanding this distinction could help you avoid costly disputes down the line.
Case Study: £170,000 Dispute Over Scope Interpretation
Recently, we supported a contractor working on a major shopping centre, in a dispute over an instruction that led to £170,000 worth of additional works.
After completing the work and submitting a payment application, the employer issued a payless notice valuing the claim at £0. Their position? The changes were simply part of design development, not a variation, and therefore not payable.
However, on review, our team at DRS determined this was not the case.
The instruction represented a clear change to the original scope of works set out in the Employer’s Requirements — making it a design change. As such, our client was entitled to payment.
Understanding the Difference
Design Development
Design development is the natural evolution of a project’s design — taking it from early-stage concepts or performance specs to detailed construction drawings.
In Design & Build (D&B) contracts, the contractor is usually responsible for this phase, including the associated risks. Even if the detailed design turns out to be more complex or time-consuming, there is no automatic entitlement to extra payment or time — unless otherwise stated in the contract.
This is a core principle of D&B: the contractor takes on both design and build responsibility.
Design Change (Variation)
A design change — or variation — refers to any alteration to the original agreed scope of works. This could include:
- Additional work
- Omissions
- Substitutions
- Changes in method, materials, or sequence
These are typically initiated by the employer or their design team and are not part of normal design development. Under most standard contracts, a valid variation will entitle the contractor to additional time and/or money.
Why This Matters
The key issue here is risk and cost allocation.
- Design development = contractor’s risk
- Design change = employer’s cost
But as with most things in construction, there are exceptions. Not every change qualifies for extra payment — and not every development falls solely on the contractor. The wording of your contract, particularly under forms like JCT D&B or NEC, plays a major role in how these issues are interpreted.
Practical Tip: Always Check the Contract
Most standard forms of building and engineering contracts (JCT, FIDIC, etc.) clearly define what constitutes a variation. NEC contracts, for example, refer to compensation events rather than variations — but the principle remains the same.
A contractor’s duty to complete the design often shifts liability away from the employer — unless there’s a clear instruction to change the original intent.
Summary
| Term | Who Instructs It? | Who Bears the Cost? | Entitled to Extra Payment? |
| Design Development | Part of contractor’s design duty | Contractor | Generally no |
| Design Change (Variation) | Employer / Design Team | Employer | Often yes |
Need Clarity on Your Contract?
At DRS, we regularly help contractors and clients avoid — or successfully resolve — disputes over variations, design responsibility, and payment cycles.
If you’re unsure whether a change constitutes design development or a variation, don’t guess. Contact our team for advice before it becomes a dispute.