URS v BDW [2025] UKSC 21 – The Supreme Court endorses the core principle of the Building Safety Act 2022

On 21 May 2025 the Supreme Court unanimously dismissed the appeals of engineering firm URS Corporation Ltd (“URS”) against lower courts’ findings that developer, BDW Trading Ltd’(“BDW”), could in principle recover the costs of remedying building safety defects caused by URS’ negligent design.

The case concerns preliminary issues arising out of defects in two residential developments on which URS had provided structural engineering services to BDW. After discovering defects in late 2019, BDW carried out remedial works in 2020-2021 at its own cost notwithstanding that, by the time it undertook the remedial works, BDW no longer had any proprietary interest in the developments and no homeowners had, or have since, made claims for the defects. At the time of the remedial works, any liability on BDW for such claims would have been time-barred.

The appeals dealt with four issues:

• Ground One – whether losses incurred voluntarily are recoverable in negligence;
• Ground Two – whether the retrospective extensions to limitation periods for claims under the Defective Premises Act 1972 (the “DPA”) apply to claims in negligence and/or contribution under the Civil Liability (Contribution) Act 1978 (the “Contribution Act”);
• Ground Three – whether developers are owed duties under the DPA; and
• Ground Four – when a cause of action accrues under the Contribution Act.

This high-level note summaries the Lord Justices’ reasoning before providing a brief comment as to why this decision is important to the construction sector. The full judgment and press summary are available here.

Ground One – Voluntary Losses and Negligence

Under English law pure economic loss, such as the costs of remediation of defects, is not recoverable in a claim for negligence unless there is an assumption of responsibility by the defendant. It was common ground between the parties that URS had assumed the required responsibility; however, URS argued that its responsibility did not go so far as to cover the costs of voluntary works undertaken by BDW.

The Court rejected URS’ arguments that BDW’s voluntarily incurred repair costs fell outside the scope of the engineer’s duty or were too remote, and rejected any principle of “voluntariness” in English law. It held that the fact a claimant voluntarily undertook repair works will not automatically render the cost of doing so irrecoverable.

However, the Court was at pains to state that this does not mean that voluntary loss will automatically be recoverable as it held a claimant’s voluntariness could affect whether the defendant’s actions caused the loss in question and/or whether the claimant sufficiently mitigated its loss. These questions will turn entirely on the facts of a particular case and accordingly must be the subject of a full trial.

Notwithstanding the need for a full trial on the facts, the Court made its view clear that it was, in any event, “strongly arguable” that BDW did not do the works voluntarily due to the severe consequences it would have observed in not acting. Such a clear view may indicate how the UK’s top Court feels judges should be approaching these issues when looking at the facts.

In rejecting URS’ argument on the voluntariness principle, the Court did not need to consider the issue of when BDW’s action in tort accrued against URS. Accordingly, the Court disappointingly declined to overturn the principle established in Pirelli[1] which is a subject for another blog.

Ground Two – Extended Limitation Periods

The Court held that section 135(3) of the Building Safety Act (the “BSA”), which introduced a retrospective 30-year limitation period for claims accruing under section 1 of the DPA, also applies retrospectively to negligence and contribution claims that are intertwined with liabilities arising from the DPA.

The Court observed the wide nature of section 135(3) which refers to actions “by virtue of” the DPA as opposed to actions “under” the DPA. It also noted that the central purpose of the BSA was to “hold those responsible for building safety defects accountable”. The Court held that limiting section 135 to actions under section 1 of the DPA would undermine this purpose and risk creating a split regime between actions under the DPA and any onward claims against those ultimately responsible for the defects. The Court noted that this may disincentivise developers from proactive remediation of building safety risks.

However, the Court was at pains to emphasise that section 135 only operates to change the law (said law being the availability of a limitation defence) retroactively and not to change history itself. Accordingly, the reasonableness of any remedial works will still be assessed by reference to the facts at the time of the relevant works. The Court made clear that the potential statute-barred status of homeowners’ claims at the time remedial works were undertaken will be relevant in determining the reasonableness of those works.

Ground Three – To Whom are DPA Duties Owed?

Section 1(1) of the DPA places a duty on anyone undertaking works in connection with the provision of a dwelling to complete that work in a workmanlike or professional manner (as the case may be) and with proper materials so that the dwelling is fit for habitation when complete (the “Duty”). URS argued that the Duty was not owed to developers as the DPA was not intended to benefit those who did not inhabit the dwellings they built. It also argued that, as BDW also owed the Duty to those who purchased the dwellings it built, BDW could not simultaneously be owed the Duty.

The Court rejected URS’ argument that it did not owe BDW the Duty holding that there “is no good reason” why one cannot both owe and be owed the Duty. Further the Court did not depart from the natural language of section 1(1)(a) which stipulates that the Duty is owed to those who “order” a dwelling, that person most obviously being the first owner, in this case BDW as the original developer.

Ground Four – When do Contribution Actions Accrue?

The Contribution Act provides a right for a primary defendant to receive a contribution from a secondary defendant for damages payable to a claimant where both defendants are responsible to the claimant for the loss.

URS argued BDW’s right to a contribution had not arisen as BDW’s primary liability to the homeowners had not been established by judgment, admission or settlement. The Court disagreed holding that a right to contribution arises once:

1. damage has been suffered by a claimant for which two defendants are liable; and
2. a defendant has paid, been ordered or agreed to pay compensation for said damage.

The Court recognised that payment of compensation included payment in kind, such as undertaking the necessary remedy as BDW had done.

The Implications of this Decision for the Construction Sector

The Supreme Court’s ruling in URS v BDW will no doubt be music to developers’ ears as it clears many paths for them to hold those responsible for building safety defects to account. The endorsement of this principle is also good news for residential owners as developers will be motivated to press ahead with remediation works without worrying that such a voluntary action will not be recoverable.

That said, developers should note that this 305-paragraph ruling addresses only the preliminary issues. A full trial remains necessary to determine the reasonableness of the remedial works carried out by BDW; however, should there be a judgment on that question it will be far more fact specific.

For those down the supply chain, while the decision no doubt causes concern, it provides needed clarity that the Courts will uphold the spirit of the Building Safety Act – in particular that those responsible for building safety defects will be held to account. Underwriters will continue to endure sleepless nights due to the further confirmation that the floodgates are open and will seemingly stay that way. A further up-tick in the insurance premiums of contractors and consultants feels inevitable.

Edwin Coe’s Construction Team has extensive experience dealing with building safety issues, including advising on claims regarding cladding and building safety defects as well as assisting with remediation works. If you have questions about any cladding and/or building safety issues, please contact our Building Safety and Cladding Team.

[1] In Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1 the House of Lords established that a claim in tort for damage from negligent design accrues when the physical damage occurs notwithstanding the damage could not be, and was not, discovered until a later date.