Concerning uptick in legacy claims

Through the FIS helpline we have seen an uptick in legacy claims in recent months. This is linked to recent First-tier Tribunal (FTT) rulings under the Building Safety Act 2022 (BSA) which have significantly reshaped the risk landscape for contractors and their supply chains by starting to give a clear steer as to how the new regulations will be interpreted. These decisions confirm that liability for historic defects can extend far beyond developers, creating exposure for contractors involved in design, installation, and remediation works—even decades after completion.

Two notable recent cases are:

Empire Square: Expanding the Scope of Contribution Orders

Here, leaseholders sought a Remediation Order (RO) against the landlord, Fairhold Athena Ltd, for cladding and fire-stopping defects. Fairhold, in turn, applied for a Remediation Contribution Order (RCO) against Berkeley Group, the original developer. The Tribunal ordered Berkeley to pay £9.6 million for remediation costs, plus ongoing waking watch and legal fees—confirming that RCOs can cover litigation and ancillary costs, not just physical works.

For contractors, this matters because developers facing multimillion-pound liabilities are likely to seek to recover costs through contractual indemnities and professional negligence claims. The Tribunal’s purposive interpretation—prioritising safety over fault—means that even parties who complied with historic standards may now face claims if their work contributed to defects.

Supreme Court in URS v BDW: 30-Year Limitation

The Supreme Court’s decision in URS v BDW Trading Ltd compounds this risk by confirming that the BSA’s extended limitation period—up to 30 years for historic defects—applies to negligence and contribution claims. Contractors who believed liability had expired under the previous six- or twelve-year limitation now face a dramatically longer exposure window.

Practical Implications for Contractors

Contractual Risk Transfer: Expect developers to invoke indemnities and warranties aggressively. Contractors should review historic contracts and assess exposure.
Record-Keeping: Detailed project records from decades ago could be critical in defending claims. Contractors should audit archives and establish retrieval protocols.
Future Contract Drafting: New projects should include clear liability caps and dispute resolution mechanisms to mitigate long-tail risk.

FIS Consultant Advisor Len Bunton has been working with members at the coal face and based on recent experience has provided fresh insight to help improve FIS Guidance.

“We are now working with a number of contractors where parties are seeking compensation for legacy works, some of it as long as 14 years ago. We have constantly repeated the message that Record Keeping is essential and this is certainly coming to bare for some. All contractors whether main or specialist should have a strategy in place to deal with legacy claims and this factsheet provides a good base for this. Remember you are not alone, we are here to help and help we can – the earlier you contact us the better and ideally before you have responded.”