In May 2025, the Supreme Court handed down a very significant judgment in the case of URS Corporation Ltd v BDW Trading Ltd. The judgment reiterated that the Court will back responsible developers who “do the right thing”, by ensuring that those developers have fair avenues of redress to the parties whose failings have resulted in the need for remedial work.
Summary of judgment
In summary, the Supreme Court held that:
- If a developer voluntarily remedies defects, there is no rule of law preventing that developer from seeking to recover its costs through a negligence claim against the party or parties responsible for causing the defects;
- The extension of the limitation period for Defective Premises Act claims has additionally extended the limitation period for claims that are dependent on the extended Defective Premises Act claim limitation period but are not actions brought under that Act;
- A developer can be a party owed a duty under section 1 of the Defective Premises Act as well as being a party owing a duty to another under the same section; and
- A developer who voluntarily remedies defects can pursue a contribution claim against another party also responsible for the defects even though there has been no judgment against the developer, no admission of liability by the developer and no financial settlement with an affected homeowner.
Background
BDW Trading Ltd (“BDW”) is a major property developer whose brands include Barratt Homes and David Wilson Homes. URS Corporation Ltd (“URS”) is a company providing consultant engineering services.
BDW was responsible for developing two high-rise residential developments called Capital East and Freemens Meadow, for which URS provided the structural designs. As is common with such developments, upon completion BDW sold long leases of the apartments to residential purchasers and then disposed of its remaining proprietary interests in the developments by a combination of (a) transfer of common parts to third-party management companies; and (b) sales of remaining elements at full value.
Following the Grenfell Tower fire, serious structural defects were discovered at both Capital East and Freemens Meadow. In 2020 and 2021, BDW carried out remedial work at both developments, despite (a) no claims having been intimated or pursued against it by any apartment owners; (b) BDW no longer having any proprietary interest in either of the developments; and (c) any such claims by apartment owners as might then have existed against BDW being out of time (because the limitation period for such claims had, by then, elapsed).
In March 2020 BDW issued proceedings against URS in negligence, seeking to recover the losses it had incurred in carrying out the remedial work.
In June 2022, section 135 of the Building Safety Act 2022 was enacted, which retrospectively extended the limitation period for claims under section 1 of the Defective Premises Act 1972 (“DPA”) from six years to thirty years. BDW immediately applied to the Court to amend its claim against URS, so as to include a claim for breach of the section 1 DPA duty and a claim under the Civil Liability (Contribution) Act 1978 (“a contribution claim”).
As might be expected, URS challenged BDW’s right to bring all the claims it intimated and, after a long journey through the lower courts, four preliminary issues of law ultimately ended up in front of a panel of seven judges in the Supreme Court. They were:
- Issue 1: can a developer who voluntarily remedies defects recover its losses from a party responsible by way of a negligence claim?
- Issue 2: does the extended DPA claim limitation period apply only to claims made directly under the DPA?
- Issue 3: did URS owe a duty to BDW under the DPA?
- Issue 4: was BDW able to bring a contribution claim against URS in circumstances where there had been no judgment against BDW and no settlement of a residents’ claim by BDW?
The Supreme Court’s decision
The Supreme Court found in favour of BDW on all four issues.
Issue 1: can a developer who voluntarily remedies defects recover its losses from a party responsible by way of a negligence claim?
The reason why issue 1 arose is because it is a principle of the law of negligence that recoverable losses are limited to those which were reasonably foreseeable as being the result of a breach of a duty of care. Losses that were not reasonably foreseeable are said to be “too remote” and are not recoverable.
URS’s argument was that, whilst it admitted it had breached a duty of care owed to BDW because of its defective structural design, the losses BDW suffered were not reasonably foreseeable because it had, in effect, carried out remedial work voluntarily. URS said that English law recognised a principle of voluntariness, whereby (a) any duty of care owed to a party did not extend to voluntarily incurred losses; and/or (b) such loss was “too remote” to be recoverable.
The Supreme Court rejected this argument and concluded that there is no such thing as a principle of voluntariness. Rather, it said that URS’s arguments about the significance of BDW voluntarily remedying defects was something it could put forward at a substantive trial, in support of an argument that BDW’s losses were not recoverable because (a) URS’s breach of duty did not cause the loss (ie: the loss was caused by BDW voluntarily remedying defects); and/or (b) BDW failed in its duty to mitigate its loss by voluntarily remedying defects that it was not legally obliged to remedy.
As an aside, the Supreme Court observed that it was strongly arguable BDW had, in any event, not acted voluntarily in remedying the defects, for a number of reasons including (a) there was risk of personal injury to, or death of, homeowners if the defects had not been remedied; and (b) the risk of reputational damage if BDW did nothing.
Issue 2: does the extended DPA claim limitation period apply only to claims made directly under the DPA?
URS argued that the extended limitation period for claims under section 1 of the DPA (from six years to thirty years) did not also extend the limitation period for claims that were dependent on the extended DPA time limit, but were not actually claims brought under the DPA. This was an important point because two of BDW’s causes of action were the claim in negligence and the claim for a contribution.
In a judgment based on a careful analysis of the words used in section 135 of the Building Safety Act, the Supreme Court concluded that the extended limitation period applied to claims that were dependent on the extended DPA time limit but were not claims brought under the DPA. However, the Court also emphasised that another reason for reaching this conclusion was that, if the extended limitation period applied only to DPA claims, it would routinely leave developers in the unjust position of owing liabilities upstream to homeowners, whilst having no downstream remedy from its supply chain.
Issue 3: did URS owe a duty to BDW under the DPA?
Section 1 of the DPA provides that a person taking on work for or in connection with the provision of a dwelling owes a duty (a) to a person ordering the dwelling; and (b) to any person who acquires an interest in the dwelling, to see that the work he takes on is done in a workmanlike or, as the case may be, professional manner, with proper materials so that the dwelling will be fit for habitation when completed.
URS’s argument was that it did not owe BDW a section 1 DPA duty because the purpose of the DPA was to protect the interests of the owners of residential properties, not the interests of those who develop residential properties.
The Supreme Court rejected this argument and found there was no reason why a party such as BDW could not simultaneously (a) owe a duty to others under section 1 of the DPA (ie: those acquiring an interest in a dwelling) ; and (b) be owed a section 1 duty by others (ie: those constructing and/or designing the dwelling).
Issue 4: was BDW able to bring a contribution claim against URS in circumstances where there had been no judgment against BDW and no settlement of a residents’ claim by BDW?
A contribution claim allows a party who is liable for damage suffered by another party to recover a contribution for that liability from a third party who is also liable for the same damage. The right arises from section 1 of the Civil Liability (Contribution) Act 1978.
URS argued that BDW was not entitled to pursue a contribution claim against it because the right to seek a contribution would not arise unless and until the existence of BDW’s liability to homeowners had been established by a judgment against BDW, an admission of liability by BDW, or a settlement with homeowners. Since none of those things had happened, URS argued, BDW could not pursue a contribution claim.
The Supreme Court rejected this argument and concluded that a right to claim a contribution arose when (a) homeowners had suffered damage for which BDW and URS were liable; and (b) BDW had paid or been ordered or agreed to pay compensation for the damage to homeowners. In this case, the Court noted that BDW had paid compensation in kind by carrying out repairs; and the fact there had been no judgment against BDW, no admission of liability and no formal settlement of homeowner claims did not prevent BDW from claiming a contribution from URS.
Implications of the judgment
The Supreme Court’s decision in URS v BDW is yet another confirmation (this time from the highest court in England) that the Courts are, so far as possible, adopting a purposive interpretation to existing and new common law and statutes, to ensure that ultimate responsibility for the building safety crisis is taken by those most liable for myriad failings across the construction sector. In particular, URS v BDW should encourage developers keen to “do the right thing” that such actions will be firmly supported by the judicial system.
For contractors, sub-contractors and consultants, a further review of risk exposure (in conjunction with professional indemnity insurers) is likely to be merited as a result of this judgment.
If you would like to know more, or would like to discuss any of the issues arising from this article, please contact our Construction team or Building Safety team.
