This week the UK Supreme Court delivered a significant ruling in the case of URS Corporation Ltd v BDW Trading Ltd, providing clarification on developers' rights to recover remedial costs and the extended application of the Building Safety Act 2022.
On 21 May 2025 The UK Supreme Court delivered a significant ruling in URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21, providing clarification on developers' rights to recover remedial costs and the extended application of the Building Safety Act 2022.
Background
Following the Grenfell Tower fire in 2017, the Government encouraged developers to investigate medium or high-rise developments for which they were responsible, and to carry out any necessary remedial works for safety defects discovered. It was during post-Grenfell investigations in 2019 that BDW Trading Ltd ("BDW") discovered serious design defects in two high-rise residential developments. Although no claims were brought by the owners or occupiers of the residential developments, and BDW no longer held proprietary interest in the developments, in 2020 and 2021 BDW carried out remedial works. BDW considered the defects, if left unremedied, presented a danger to occupants and risked serious damage to BDW's reputation in the market.
In March 2020, BDW issued proceedings against its structural engineer, URS Corporation Ltd ("URS"), relying on common law negligence. At that time, prior to the coming into force of the Building Safety Act 2022 ("BSA"), BDW was time-barred from bringing an action against URS under the Defective Premises Act 1972 ("DPA") or any collateral warranties or contracts.
Section 135 of the BSA came into force in June 2022 and retrospectively extended the limitation period for accrued claims under section 1 of the DPA from 6 years to 30 years. It was in June 2022 that BDW issued an application to amend its case under section 1 of the DPA and the Civil Liability (Contribution) Act 1978 ("the Contribution Act").
URS resisted liability in the proceedings on several grounds, ultimately appealing to the Supreme Court. The Supreme Court granted permission to appeal on 5 December 2023 on four grounds, which gave rise to the following issues.
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?
URS argued that BDW's losses were not recoverable because the remedial works were carried out "voluntarily" without legal obligation and where BDW had no proprietary interest. The Supreme Court rejected this, finding that there was no general legal principle that bars recovery on the basis of voluntariness.
While questions of reasonableness, causation and mitigation are fact-sensitive, the Court found that in this context, BDW's decision to carry out the works was commercially and practically justified, considering that risks may cause injury to persons and BDW's reputation. The Court found that there was a general public interest, which included moral pressure on BDW, in BDW undertaking the remedial works.
Ground 2: Does section 135 of the BSA apply in the present circumstances and, if so, what is its effect?
The judgement is also significant for its treatment of section 135 of the BSA, which extended the limitation period for DPA claims, including those made retrospectively. The Court held that this extension does not only apply to claims made directly under section 1 of the DPA, but also to related claims, such as those in negligence, and for contributions that are dependent on that section. This means that a claim for repair costs by a developer to a contractor or consultant, which is made as a contribution or negligence claim, will benefit from the same extended limitation period.
This interpretation, the Court found, reinforces the underlying "purpose and policy" objective of the BSA, to ensure that those responsible for building safety defects can be held accountable, and that proactive developers are not left without recourse.
Ground 3: Did 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 Supreme Court confirmed that developers can be owed duties of care under section 1(1) (a) of the DPA. A proprietary interest in the land is not necessary; it is sufficient that a party has commissioned the construction for a dwelling. The Court also found that the DPA encompasses not only physical damage but also economic losses, including, importantly, costs incurred in repairing defective works.
This marks a significant extension of the scope of the DPA with serious practical implications for parties to construction contracts across the chain. This clarification may prompt a rise in DPA claims, particularly where responsibility between multiple parties is complex or unclear.
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 Supreme Court held that BDW can seek contribution from other "wrong-doers" under the Contribution Act (such as a contractor or consultant) without a prior judgment, settlement or third-party claim, provided it has incurred compensatory losses, even via "payment in kind", such as carrying out remedial works. This broadens the circumstances in which contribution claims may be pursued and recognised as actionable.
Practical implications
This judgement represents a significant strengthening of developers' rights in relation to building defects. The Supreme Court considers that its judgement marks an alignment with the overall policy of the BSA, to improve building safety and to ensure that necessary remediation work is carried out without delay. Reliance was placed on submissions made in writing to the Court by the Secretary of State for Housing, Communities and Local Government, who was an Intervener in the case.
This will be a welcome clarification to developers in the industry, however, given the 30-year limitation period and considerable exposure to costs, this will likely cause concern for many of those in the supply chain that could now be exposed to historic claims with significant costs attached.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
