URS Corporation Ltd v BDW Trading Ltd UKSC 21
URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21
Background to the Case
On 14 June 2017, Grenfell Tower in London was engulfed in flames, tragically resulting in 72 fatalities. The disaster exposed widespread safety defects in high, rise residential buildings, most notably the use of unsafe cladding. In response, the Government urged developers to undertake necessary remedial works and bolstered this by imposing new legal liabilities on developers through the Building Safety Act 2022 (the “BSA”). This is the backdrop against which disputes between property developers and their design professionals, such as the case of URS v BDW, have arisen.
BDW Trading Ltd (“BDW”) is a major UK housing developer and URS Corporation Ltd (“URS”) is an engineering consultancy. During BDW’s post, Grenfell safety investigations in late 2019, BDW discovered structural design defects in two high, rise residential developments for which BDW had been the developer and URS had provided the structural engineering designs. In 2020, 2021, BDW carried out remedial works to fix those defects at its own cost, even though by that time BDW no longer owned any interest in the buildings, no claims had been made against BDW by homeowners, and any such claims would have been time, barred. In March 2020, BDW initiated a negligence claim against URS to recover the costs of these remedial works.
Claims and Procedural History
The case first came before the High Court as a trial of preliminary issues in October 2021. Mr Justice Fraser found in essence that BDW’s claim could proceed, deciding that:
- URS’s duty of care in tort extended to the losses claimed by BDW (with the exception of a separate claim for reputational damage which was not allowed);
- The losses were recoverable in principle and were not too remote;
- Any issues of legal causation or mitigation (such as whether BDW acted reasonably in fixing the defects) should be resolved at the full trial; and
- Accordingly, BDW’s claim should not be struck out at the preliminary stage.
While BDW’s negligence claim was ongoing, legislative change came into play. In June 2022, section 135 of the BSA took effect, retrospectively extending the limitation period for claims under section 1 of the Defective Premises Act 1972 (“DPA”) from 6 years to 30 years. (Section 1 DPA imposes a duty to ensure that dwellings are fit for habitation, applying to those involved in constructing a dwelling, including developers like BDW and professionals like URS.) In light of this development, BDW successfully applied to amend its case to add a claim against URS under section 1 DPA, as well as a claim for contribution under the Civil Liability (Contribution) Act 1978 (“the Contribution Act”).
URS appealed the High Court’s preliminary rulings and the permission to amend. In July 2023, the Court of Appeal unanimously dismissed URS’s appeals, affirming that BDW’s claims could proceed. The Supreme Court thereafter granted URS permission to appeal on four grounds of law, which are addressed in its judgment.
The Supreme Court’s Judgment
On 21 May 2025, the Supreme Court (Lords Hamblen and Burrows giving the lead judgment) unanimously dismissed URS’s appeal on all four grounds. The judgment confirms important principles about when developers can recover the cost of remedial works and clarifies the interpretation of the Building Safety Act 2022, the Defective Premises Act 1972, and the Contribution Act 1978 in this context. The four grounds of appeal and the Supreme Court’s conclusions on each are summarised below.
Ground 1: Scope of Duty and Remoteness of Loss
Ground 1 asked whether the losses BDW sought (the cost of the remedial works) were outside the scope of URS’s duty of care, or too remote, on the basis that BDW had incurred these costs voluntarily (i.e. without a legal obligation and after it had sold its interest in the properties). URS argued that English law recognises a “voluntariness principle” under which a party who voluntarily remedies a defect, in the absence of a legal duty, cannot recover those costs in negligence. In other words, URS contended that because BDW chose to carry out repairs when it had no proprietary stake or legal liability at the time, the loss fell outside the scope of any duty URS owed or was too remote.
The Supreme Court rejected this argument. It held that the authorities URS relied upon did not establish any rule of law barring recovery for “voluntary” remedial expenditures. While a claimant’s voluntary actions might be relevant to factual questions of causation or mitigation (for example, whether the claimant acted reasonably), those questions are fact, sensitive and must be resolved at trial on the evidence. In this case, it is not disputed that URS assumed responsibility to BDW in its engineering contracts and breached its duty by providing defective designs, which in principle entitles BDW to claim the cost of repairs in negligence. Moreover, the Court observed that on the assumed facts it is “strongly arguable” BDW did not act wholly voluntarily, given the serious risk of personal injury or death to homeowners if the safety defects were left unaddressed, BDW’s decision to carry out remedial work was a reasonable response to an imminent danger.
Since the Court held that BDW’s expenditure on repairs is recoverable in principle (subject to proof of loss and causation at trial), it did not need to decide an additional question raised under Ground 1 about when BDW’s cause of action in negligence accrued (and whether to depart from the old authority of Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1 on that point). That issue was academic given the Court’s conclusion that a voluntariness, based defence does not bar BDW’s claim.
Ground 2: Application of Section 135 of the Building Safety Act 2022
Ground 2 concerned section 135 of the Building Safety Act 2022, and whether its new 30, year limitation period for DPA claims (applied retrospectively) also extends to related claims in negligence and for contribution, like those brought by BDW in this case. Section 135(1) BSA amended the Limitation Act 1980 to provide a 30, year limitation period for causes of action accruing under section 1 DPA before 28 June 2022, and section 135(3) stipulated that this amendment is to be treated as always having been in force (i.e. fully retrospective) except in two situations: if applying it would breach a defendant’s rights under the European Convention on Human Rights, or if the claim was already settled or determined before 28 June 2022. In BDW’s case, by the time it discovered the defects, any DPA claims by homeowners were long time, barred under the old 6, year limit; however, the new law potentially revived those claims by extending the period to 30 years, thereby exposing BDW to liability and enabling BDW to bring its own claims against URS.
It was undisputed that section 135 applies to claims under section 1 DPA (for example, a homeowner’s claim against a developer). The contentious issue was whether the retrospective effect of section 135(3) also applies to other causes of action that are dependent on a DPA claim’s timeline, such as BDW’s negligence claim against URS or a contribution claim that hinges on BDW’s liability under the DPA. URS contended that the extended 30, year limitation should be confined strictly to DPA claims, meaning BDW’s negligence and contribution claims against URS would remain time, barred (since, absent the BSA, any liability of BDW to the homeowners had expired).
The Supreme Court held that section 135(3) BSA does apply to claims which are dependent on section 1 DPA causes of action. In other words, the statutory extension of time is not limited to direct DPA claims by homeowners, but also ensures that “onward” claims by developers (such as in negligence or contribution) benefiting from the extended DPA liability window are likewise not time, barred. The Court’s interpretation was based on both the wording and the purpose of the provision. First, section 135(3) refers to “an action by virtue of section 1 DPA,” rather than simply actions “under” the DPA, which indicates a broader scope covering claims arising out of DPA, related liability.
The heading of section 135(1) and its text provide context, also using “by virtue of the DPA,” suggesting Parliament intended to capture not only direct DPA claims but any actions deriving from the existence of a DPA duty. Second, the policy aim of the BSA was to ensure those responsible for historic building safety defects can be held to account. Limiting the extended limitation to only the original homeowner claims under the DPA, but not to developers’ follow, on claims against those actually responsible (like contractors or consultants), would undermine that purpose. It would create a disjointed “split regime” where a developer might be liable to a homeowner (thanks to the extended 30, year period) but unable to recover a fair share of the cost from the wrongdoer, effectively penalising conscientious developers who proactively remediate defects.
The Court noted that section 135’s retrospective effect will not apply to every scenario where a DPA issue is raised incidentally, but it clearly applies in circumstances like this case, i.e. actions in respect of building defects that fundamentally rely on the existence of a DPA obligation. Thus, BDW’s negligence and contribution claims (being contingent on BDW’s DPA liability to homeowners) benefit from the 30, year limitation period, and URS cannot avoid those claims on limitation grounds.
Ground 3: Duty Owed Under the Defective Premises Act 1972
Ground 3 asked whether URS owed BDW a statutory duty of care under section 1(1)(a) of the Defective Premises Act 1972, and if so, whether BDW’s claimed losses are of a kind recoverable for breach of that duty. Section 1 DPA, in summary, imposes a duty on those involved in the construction of a dwelling to do their work in a workmanlike or professional manner so that the dwelling will be fit for habitation. Specifically, section 1(1)(a) provides that the duty is owed to persons for whom the dwelling is “provided to the order of” (essentially, the person who commissions or arranges the construction), and section 1(1)(b) extends the duty to any person who “acquires an interest” in the dwelling (such as a future homeowner).
In this case, BDW was the developer that arranged for the construction of the residential buildings, and URS was the engineering consultant engaged to provide designs. URS argued that the DPA distinguishes between those who owe duties and those to whom duties are owed, contending that a developer cannot be a beneficiary of the DPA duty because developers themselves owe duties to eventual purchasers. In URS’s view, only the ultimate homeowners (who acquire an interest) should be owed duties, whereas a party like BDW, who was itself a duty, holder under the Act, could not simultaneously have rights under the same statute.
The Supreme Court rejected this narrow interpretation. The Court found no reason why a developer cannot both owe a duty and also be owed a duty under the DPA. In particular, where (as here) the developer is the first owner of the property, that developer can fall within the class of persons to whom the section 1(1)(a) duty is owed. The purpose of the DPA was to protect those with an interest in the dwelling, including not only subsequent purchasers but also the person who initially commissioned the work (often the developer itself in the role of first owner). Legal commentary and construction law textbooks supported the view that a developer in BDW’s position is intended to be covered by the Act’s protection as someone for whom the dwelling was provided.
Accordingly, the Court held that URS did owe BDW a duty under section 1(1)(a) DPA, since the structural design work was done “to the order of” BDW. BDW is therefore entitled to pursue a claim against URS for breach of that statutory duty. Furthermore, the losses BDW seeks (the cost of rectifying the defects) were confirmed to be a type of loss recoverable for breach of that duty. This means BDW’s remedial costs can, in principle, be claimed as damages under the DPA if the other elements of the claim are proven.
Ground 4: Contribution Claim Without Prior Judgment or Claim
Ground 4 concerned BDW’s claim for a contribution from URS under the Civil Liability (Contribution) Act 1978. The question was whether BDW is entitled to bring a contribution claim against URS even though there had been no prior judgment, settlement, or even a third, party claim by any homeowner against BDW. The Contribution Act allows a party who is liable for damage (denoted “D1”) to recover a contribution from another party (“D2”) who is also liable for the same damage, distributing the burden of compensation between them according to their relative responsibility. Here, BDW claimed that by performing the repairs it effectively compensated the homeowners for the damage caused by the defects, and since URS’s negligence was also responsible for that damage, URS should contribute to the cost.
URS argued that BDW’s contribution claim was premature, maintaining that a right to contribution does not arise unless and until BDW’s liability to the homeowners has been established by a court judgment or BDW has admitted liability or settled a claim with them. In other words, URS contended that without an actual claim or award against BDW by a homeowner, BDW could not seek to share the loss with URS. BDW, on the other hand, argued that its right to contribution arose as soon as the homeowners suffered damage for which both BDW and URS are liable, even if the homeowners never pursued BDW or URS for that damage. BDW’s position was that the law should allow proactive remediation: once the defect caused loss to the homeowners (diminishing the value or safety of their flats), and BDW took responsibility by fixing it, the contribution claim against URS was valid even absent a formal claim by the homeowners.
The Supreme Court took a middle path, rejecting both extremes of the parties’ positions. It clarified when a right of contribution arises under the 1978 Act. Two conditions must be satisfied: (i) the person who suffered the damage (here, the homeowners) has indeed suffered actionable damage for which both D1 and D2 are liable, and (ii) D1 has actually paid compensation, or been ordered or agreed to pay compensation, in respect of that damage. Only once both those conditions are met does D1’s statutory right to recover contribution from D2 crystallise.
Applying that test, the Court concluded that BDW’s contribution claim was valid in this case because BDW had effectively paid compensation in kind to the homeowners by remedying the defects at its own expense. The fact that there was no judgment against BDW, no admission of liability, and no claim ever filed by the homeowners does not prevent BDW from seeking contribution, since BDW’s voluntary repair expenditures stand in place of compensation that would otherwise be owed to the homeowners. In short, once BDW took it upon itself to pay for the damage (thereby satisfying the homeowners’ loss), BDW became entitled to pursue URS for a fair contribution to that cost. The Court thus decided Ground 4 in BDW’s favour, allowing the contribution claim to proceed.
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