Supreme Court decision gives “teeth” to the Building Safety Act
On 21 May 2025 the Supreme Court handed down Judgment in the case of URS Corporation Ltd -v- BDW Trading Ltd [2025] UKSC 21.
This Judgment is perhaps one of the most significant since the Building Safety Act came into force as it starts to give us an indication of how Developers claims are going to impact the wider market. The case addressed important issues such as:
(1) the scope of duty and the recoverability of loss in negligence;
(2) limitation periods under section 135 of the Building Safety Act 2022 (BSA);
(3) whether section 1(1)(a) of the Defective Premises Act (DPA) applies to developers; and
(4) whether a judgment or settlement is required to enable a party to bring a contribution claim under the Civil Liability (Contribution) Act 1978 (Contribution Act).
The facts
BDW is a major property developer and includes Barratt Homes and David Wilson Homes. URS, was engaged by BDW to act as a structural design consultant in connection with multiple high-rise residential developments which completed some considerable time ago. In the aftermath of the Grenfell Tower tragedy BDW reviewed its portfolio. Two of its high-rise residential developments contained design defects.
Even though BDW had disposed of its interest and sold the developments, in 2020 and 2021 BDW undertook remedial works to the properties at significant cost. At this stage no claim was made against BDW by any third party and in any event, at the time, any such claims would have been time barred.
In March 2020, BDW brought a defects claim against URS to recover its losses. BDW successfully amended the claim in June 2022 following the coming into force of the BSA which retrospectively extended the limitation period for claims under section 1 of the DPA from 6 to 30 years. The case ended up the Supreme Court where Seven Justices of the Supreme Court heard 4 grounds of appeal in December 2024:
Decision
All four grounds the Court found in favour of BDW (URS’s appeals were dismissed):
| Ground 1 | Is loss that is otherwise recoverable in the tort of negligence irrecoverable if it is incurred (i) without an enforceable legal obligation to do so, and (ii) in respect of property in which the claimant has no proprietary interest, because such loss is voluntarily incurred, and that means it falls outside the scope of the defendant’s duty of care and/or is too remote?
No. There is no rule of law which means that the voluntary carrying out of the repairs by BDW render the repair costs (1) outside the scope of the duty of care owed or (2) too remote. Whether these costs were recoverable is a question of fact and depends on legal issues of causation and mitigation which will be assessed when considering liability. The effect of this is that developers who incur costs to remedy building safety defects, even in the absence of a claim from a third party, may be able to recover these costs from the negligent builder or designer. |
| Ground 2 | Does section 135 of the BSA (extended limitation period) apply in the present circumstances and, if so, what is its effect?
Yes. Section 135(3) BSA applies to claims which are dependent on s.1 DPA. To make a claim, a developer would need to establish that it applies to actions arising out of a liability that is dependent on section 1 of the DPA even though it is not an action brought under section 1 of the DPA. Such actions are clearly “in respect of damage or defects in relation to buildings”. The Supreme Court said the alternative would undermine the purpose of the BSA i.e. to ensure those responsible for historic building safety defects are held to account. There is a possible sting in the tail for developers or other relevant claimants seeking to recover losses incurred despite the existence of a potential limitation defence. This is because section 135 (3) BSA does not retrospectively affect the answer to the questions of causation, mitigation and remoteness which determine whether a developer can recover compensation from a negligent designer or contractor for the cost of remedial work carried out before June 2022. This will be a matter to be addressed when considering liability. |
| Ground 3 | Does section 1(1)(a) of the DPA also apply to property developers?
Yes. The Supreme Court have said that there is no reason why a developer cannot both owe a duty and be a owed a duty, particularly where the developer is the first owner. |
| Ground 4 | Is BDW entitled to bring a contribution claim against the URS under section 1 of the Contribution Act when there has been no judgment or settlement between BDW and any third party and no third party has ever asserted any claim against BDW?
Yes. The Supreme Court held that the right to contribution arises when: (i) damage has been suffered by C for which D1 and D2 are each liable; and (ii) D1 has paid or been ordered or agreed to pay compensation for the damage to C. On the facts, BDW paid compensation (in kind) for the damage suffered by the homeowners by carrying out the repairs. The fact that there has been no judgment against the developer or admission of liability or settlement between it and any of the homeowners, nor any claim, does not prevent the claim for contribution. |
It is worth noting too that, as intervener, the government made written submissions relating to the background to the BSA, the structure of the BSA and the policy and purpose underlying the BSA in general and section 135 in particular. These submissions were very much supportive of BDW’s case.
The consequences
The Supreme Court has provided encouragement and motivation to developers to be proactive in carrying out repairs by clarifying the law and signifying that there are a host of options available to them to seek to recover those costs.
This gives “teeth” to the BSA and the policy underpinning the Act.
The Supreme Court’s decision will likely have a significant impact on historic claims for building safety defects. However, there are some wrinkles to be ironed out. Whilst the policy behind the decision may be clear, some of the legal issues remain complex and nuanced and the effect of this judgment will be subject to further debate and discussion and clarification by the court and for future cases to involve arguments around causation and mitigation.
This article is an abridged version of an article originally written by FIS Legal Advisors Hill Dickinson, the full article can be seen here.
