URS Corporation Ltd v BDW Trading Ltd

Costs reasonably incurred to remedy negligently caused building defects are not irrecoverable merely because the claimant acted voluntarily or lacked an enforceable obligation to undertake the work. Voluntariness is ordinarily relevant to fact-sensitive questions of causation and mitigation.

The retrospective limitation regime in section 135 of the Building Safety Act 2022 extends to negligence and contribution claims dependent on liability under section 1 of the Defective Premises Act 1972. It does not alter historical facts relevant to causation or mitigation.

A duty under section 1(1)(a) of the 1972 Act may be owed to a developer to whose order a dwelling was built. A contribution claim arises once the claimant has paid, agreed or been ordered to pay compensation, including by carrying out remedial works. No prior claim, judgment or settlement is required.

BDW developed two groups of high-rise residential buildings using structural designs supplied by URS. On assumed facts, URS negligently produced defective designs which created safety risks. After disposing of its proprietary interests, BDW discovered the defects and undertook remedial works without receiving any claim from an owner or occupier.

Fraser J determined preliminary issues concerning BDW’s negligence claim in its favour, except in relation to reputational damage: [2021] EWHC 2796 (TCC). Following enactment of the Building Safety Act 2022, a deputy High Court judge permitted BDW to add claims under the Defective Premises Act 1972 and the Civil Liability (Contribution) Act 1978: [2022] EWHC 2966 (TCC). The Court of Appeal dismissed URS’s appeals: [2023] EWCA Civ 772.

The Supreme Court considered recoverability of voluntarily incurred remediation costs, the retrospective reach of section 135 of the 2022 Act, whether a developer may be owed the statutory duty under the 1972 Act, and when a contribution claim accrues.

1. Disposition. The appeal was dismissed unanimously. Lord Hamblen and Lord Burrows delivered the principal judgment, with which Lord Lloyd-Jones, Lord Briggs, Lord Sales and Lord Richards agreed. Lord Leggatt agreed with their conclusions and supplied the court’s detailed reasoning on contribution.

2. Negligence and voluntary expenditure. There is no bright-line rule that repair costs fall outside the scope of a duty of care or are too remote merely because they were incurred voluntarily. URS had assumed responsibility for exercising reasonable skill and care in its structural designs. The purpose of that duty was to protect BDW against the very risk which occurred: a defective building requiring repair. The repair costs were also a type of loss which URS must have contemplated as a serious possibility when it assumed responsibility. Voluntariness is ordinarily relevant to legal causation and mitigation. Those questions depend on whether the claimant acted as a reasonable and prudent person could be expected to act in the circumstances and remained for trial: paras 27–33, 53–67, 174–192.

3. Accrual of the negligence claim. It was unnecessary to decide whether Pirelli should be overruled. The court observed that its treatment of cracks as physical damage rested on a false premise following the recognition that defective construction represents pure economic loss. Whether accrual should instead occur on discoverability raised difficult questions, including interaction with the Latent Damage Act 1986, and was left for a case in which the issue forms part of the ratio: paras 70–77.

4. Retrospective limitation. Section 135(3) of the Building Safety Act 2022 applies not only to actions brought under section 1 of the Defective Premises Act 1972, but also to negligence and contribution claims dependent on whether a section 1 liability was time-barred. The resulting 30-year period is treated as having applied when the remedial costs were incurred. The provision changes the historical legal position, but does not retrospectively alter facts or the reasonableness of conduct relevant to causation or mitigation: paras 95–125, 267–304.

5. Statutory duty concerning dwellings. Section 1(1)(a) of the 1972 Act applies to any person, including a developer, to whose order a dwelling is built. That person will ordinarily be the first owner. A developer may both owe the statutory duty to purchasers and be owed it by those who perform construction or professional work. Remediation expenditure caused by the contractor’s breach is a recoverable type of loss: paras 139–161, 193–208.

6. Contribution. A right to contribution arises when damage has been suffered for which both parties are liable and the person seeking contribution has paid, agreed or been ordered to pay compensation. Payment may be in kind, including the performance of remedial works. Neither a claim by the injured person nor a judgment, admission or settlement is required. The two-year limitation period begins when the payment is made or, if earlier, its amount is agreed, or when a quantified judgment or award is given: paras 209–266.

1. United Kingdom Supreme Court: The court unanimously dismissed URS’s appeal and affirmed the result reached by the Court of Appeal: [2025] UKSC 21.
2. Court of Appeal: The court dismissed appeals from Fraser J’s preliminary-issue decision and the order permitting amendments: [2023] EWCA Civ 772.
3. High Court: A deputy judge permitted BDW to add claims under the Defective Premises Act 1972 and the Civil Liability (Contribution) Act 1978: [2022] EWHC 2966 (TCC).
4. High Court: Fraser J held that the scope of URS’s duty extended to the remediation losses and that they were recoverable in principle, while leaving causation and mitigation for trial: [2021] EWHC 2796 (TCC).