A supreme judgment for building safety

The Supreme Court has made a welcome ruling in the long running dispute over preliminary issues between a developer and its design consultant in connection with the consultant’s potential liability for the costs of remediation of defective cladding and/or other fire safety issues in two historic high-risk residential developments – URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21

Background

• BDW is a major developer whose brand names include Barrat Homes and David Wilson Homes. During its post-Grenfell investigations in late 2019, BDW discovered design defects in two of its historic multiple high-rise residential developments. URS was the structural designer appointed by BDW for the developments.
• In the case of both developments BDW had initially been the freehold owner and/or had a proprietary interest in the properties. In both cases, BDW had disposed of its interest in the developments some time prior to its investigations.
• In 2020 and 2021 BDW carried out remedial works to the developments. At the time of the remedial works:
  1. no claim against BDW had been intimated by the current owners/occupiers of the developments;
  2. BDW had no remaining proprietary interest in the developments; and
  3. any claim against BDW by the current owners/occupiers would have been time barred under the Limitation Act 1980.
• In March 2020 BDW issued proceedings against URS in negligence and/or by way of contribution.
• On 28 June 2022 s.135 of the Building Safety Act 2022 (BSA) came into force which extended the limitation period for claims brought under s.1 of the Defective Premises Act 1972 (DPA) (which imposes a statutory duty on those taking on work in connection with the provision of a dwelling to see that their work is done so that the dwelling will be fit for habitation when completed) and meant that claims against BDW by the current owners/occupiers would no longer be time barred. BDW was given permission to amend its claim against URS to take account of this updated statutory position.

The preliminary dispute 

For the purposes of the preliminary dispute, it was assumed by the court that URS had breached its duty of care and that the defects presented a health and safety risk to the residents. Whether or not these assumed facts are correct may be the subject of a future trial on the technical issues.

The Supreme Court was asked to rule on 4 specific grounds of dispute. These grounds and the court’s findings can be very briefly summarised as follows:

1. Is a claim in negligence against URS too remote?

The court held: no.

2. Does section 135 of the BSA (extending the limitation period for DPA claims) apply in the present circumstances (particularly where the remedial works had been carried out and the claim instigated prior to the limitation extension coming into force) and, if so, what is its effect?

The court held: yes, s.135 did apply and would extend the limitation period for any claim which was dependant on s.1(1) of the DPA, including where the claim was brought in negligence or by way of contribution.

3. Does URS owe a duty to BDW under section 1(1)(a) of the DPA and, if so, are BDW’s alleged losses of a type which are recoverable for breach of that duty?

The court held: yes

4. Is BDW entitled to bring a claim against URS pursuant to section 1 of the Civil Liability (Contribution) Act 1978 notwithstanding that there has been no judgment or settlement between BDW and any third party and no third party has ever asserted any claim against BDW?

The court held: yes

A summary of the court’s findings and its reasoning are set out below.

The judgment

Over a three-day hearing the court heard representations from both parties and also received written representations from the government regarding the background, structure, policy and purpose of the BSA. The judgment extends to some 88 pages and considers a number of arguments from URS and BDW in connection with the 4 grounds noted above.

Ground 1: In relation to BDW’s claim in the tort of negligence against URS, has BDW suffered actionable and recoverable damage or is the damage outside the scope of the duty of care and/or too remote because it was voluntarily incurred (disregarding the possible impact of section 135 of the BSA)? If the answer to that question is that the damage is outside the scope of the duty of care or is too remote, did BDW in any event already have an accrued cause of action in the tort of negligence at the time it sold the developments?

There was an assumption of responsibility by URS to BDW (by way of its professional services contract) and the parties agreed that this duty extended to liability for pure economic. The court found that the damage suffered was within URS’s duty of care and noted that the types of loss suffered by BDW must have been in the reasonable contemplation of URS at the time it assumed its responsibility to BDW.

Further, the court held that the damage was not too remote and BDW did not act "voluntarily" in carrying out the remedial works, but in fact had no realistic alternative other than to carry out the remedial works where there was a health and safety risk to residents of the developments and that the policy of the law favours incentivising a claimant in BDW’s position to carry out the repairs so as to ensure that any danger to homeowners is removed.

The court further confirmed that BDW’s actions did not breach the chain of causation. The court stated that, assuming that URS had breached its duty of care to BDW "It is fair and reasonable that the risk of that loss should be borne by URS and not BDW."

The court declined to give any opinion on whether BDW accrued a cause of action in the tort of negligence at the time it sold the developments, as this was not relevant to the current case, given the court’s other findings on this ground. This leaves a fundamental point of law unanswered, and we wait to see if this arises in other cases in the future.

Ground 2: Does section 135 of the BSA apply in the present circumstances and, if so, what is its effect?

The court noted the fact that the remedial works took place before s.135 of the BSA came into force and therefore at a time when any claim against BSA by the current owners/occupiers of the developments would have been time barred. The court also considered whether the extended limitation period only applies to direct claims under the DPA or whether claims in negligence or claims for contribution can all rely on the extended limitation period by virtue of s.135 of the BSA.

The court received submissions from the Secretary of State who observed that "There is no good policy reason why Parliament would have decided to penalise those developers who undertook remedial works before section 135 BSA came into force." The court agreed that s.135 applies retrospectively and in carrying out the remedial works at the time it did, BDW had acted responsibly and should not now be penalised for doing so.

The court also confirmed that in order to take advantage of the extended limitation period, the action does not need to be brought under section 1 of the DPA. As long as the action (e.g. negligence or contribution) is dependant on secion1 of the DPA, those actions are plainly "in respect of damage or defects in relation to buildings" and the extended limitation period will apply.

So s.135 of the BSA will apply not just for direct claims under s.1(1) of the DPA but also where there is a claim for damages for associated repair costs in the tort of negligence, or there is a claim for contribution in respect of those repair costs.

Ground 3: Do URS owe a duty to BDW under section 1(1)(a) of the DPA and, if so, are BDW’s alleged losses of a type which are recoverable for breach of that duty?

It is commonly accepted that developers will owe the statutory duty under section1(1) of the DPA, but URS disputed whether BDW could also itself be owed a statutory duty by its own contractors/consultants (such as URS).

URS argued that the purpose of the DPA was to address unfairness related to losses suffered by purchasers of new dwellings, not to protect developers who do not inhabit dwellings. BDW contended that a developer such as BDW falls within the plain, grammatical meaning of section 1(1)(a). It is the person to whose “order” URS carried out work in connection with the provision of the dwellings.

The court found that a developer can both owe a DPA duty (eg to a subsequent purchaser) and be owed that same duty by its contractors/consultants. The categories are not mutually exclusive. However, the duty under section 1(1) is only owed to developers if they order the work, and it appears that that will most obviously be so where the developers are the first owners of the dwelling.

Ground 4: Is BDW entitled to bring a claim against URS pursuant to section 1 of the Contribution Act notwithstanding that there has been no judgment or settlement between BDW and any third party and no third party has ever asserted any claim against BDW?

The court found that BDW was not prevented from bringing a claim for contribution against URS in circumstances where no third party has ever asserted any claim against BDW and there has been no judgment or settlement in relation to the remedial works.

The court found that it was sufficient that BDW had made a payment in kind (by performing remedial works) in compensation for the damage suffered by the homeowners, even where they had not intimated a claim for that damage.

The court left some points open for future argument, in particular the court did not make any ruling on when the cause of action had accrued (i.e. whether the cause of action had accrued at the time BDW sold the developments). There is also some uncertainty over whether a developer could be owed a duty under the DPA where it was not the owner of the property at the time of the original construction works.

Key takeaways

• The court upheld the overriding policy position following Grenfell that those responsible for building safety defects should be held responsible for the costs of remedial works.
• Contractors and/or consultants can be liable to the original developers in relation to duties owed in connection with s.1(1) of the DPA under the extended limitation period provided by the BSA.
• Developers do not need to wait to receive a claim from current owners/occupiers before carrying out remedial works and being able to claim the costs of doing so from their contractors/consultants.
• Given the above, contractors and consultants (and their insurers) need to be aware that claims may be made in relation to safety defects at residential developments for claims which have accrued up to 30 years prior to 28 June 2022. This is well outside of the usual limitation periods for negligence and or breach of contract.
• Developers, contractors and consultants are likely to face difficulties defending historic claims, when internal records for such projects will be archived or no longer available and any personnel originally involved in the design and/or construction are likely to have moved on.

We will wait to see if the parties in this case go to trial on the technical merits of the allegations, but in the meantime the Supreme Court’s judgment on the preliminary dispute provides welcome guidance on who may be held responsible for the costs of remediating building safety defects on historic (and future) residential developments.