URS Corporation Ltd v BDW Trading Ltd (Rev1) [2025] UKSC 21 (21 May 2025)

Developer BDW discovered structural defects in residential developments designed by engineer URS. BDW voluntarily carried out remedial works despite claims by homeowners being time-barred. The Supreme Court held BDW could recover costs in negligence, under the Defective Premises Act 1972, and for contribution, rejecting URS's argument that voluntarily incurred losses are irrecoverable as a rule of law.

Facts

BDW Trading Ltd, a major property developer, engaged URS Corporation Ltd to provide structural design services for two high-rise residential developments known as Capital East and Freemens Meadow. Following the Grenfell Tower disaster, BDW discovered serious structural defects in these developments in late 2019. Although no claims had been made against BDW by homeowners, and any such claims under the Defective Premises Act 1972 (DPA) would have been time-barred under the original six-year limitation period, BDW carried out remedial works in 2020-2021.

BDW brought proceedings against URS claiming damages for the cost of repairs on three alternative bases: the tort of negligence, breach of duty under section 1 of the DPA, and contribution under the Civil Liability (Contribution) Act 1978. The Building Safety Act 2022 (BSA) subsequently came into force, retrospectively extending the limitation period for DPA claims from six to thirty years.

Issues

Ground 1

Whether BDW’s voluntarily incurred repair costs fell outside the scope of URS’s duty of care or were too remote because they were incurred without enforceable legal obligation.

Ground 2

Whether section 135 of the BSA applies to BDW’s claims in negligence and contribution, and what its retrospective effect entails.

Ground 3

Whether URS owed a duty under section 1(1)(a) of the DPA to BDW as developer.

Ground 4

Whether BDW could claim contribution from URS without any judgment, settlement, or claim having been made by third parties.

Judgment

The Supreme Court unanimously dismissed URS’s appeal on all grounds.

Ground 1: Voluntariness Principle

Lords Hamblen and Burrows, delivering the main judgment, rejected URS’s contention that there exists a bright-line rule of law rendering voluntarily incurred losses irrecoverable. The four cases relied upon by URS were distinguished as primarily concerning pure economic loss where no duty of care was owed, rather than establishing a voluntariness principle operating through scope of duty or remoteness.

The Court emphasised that voluntariness is most naturally relevant to legal causation and mitigation, which are fact-specific enquiries requiring trial. Three features of BDW’s position indicated it was not acting truly voluntarily: the risk of personal injury claims which would not be time-barred; the existence of underlying legal liability even if unenforceable; and potential reputational damage.

Ground 2: Building Safety Act 2022

The Court held that section 135(3) of the BSA applies not only to direct DPA claims but also to claims in negligence and contribution that depend on whether a DPA claim was time-barred. The retrospective extension serves the statutory purpose of holding those responsible for building safety defects accountable. However, section 135 does not retrospectively affect factual questions of reasonableness in mitigation or legal causation that must be determined at trial.

Ground 3: DPA Duty to Developers

The Court held that section 1(1)(a) of the DPA applies to any person to whose order a dwelling is built, including developers who are typically the first owners. The purpose of the DPA supports wide rather than narrow construction of those to whom duties are owed. There is no conceptual impossibility in a person both owing and being owed the statutory duty.

Ground 4: Contribution Claims

Lord Leggatt, giving a concurring judgment on this issue, held that a right to recover contribution arises when damage has been suffered for which both parties are liable and the contribution-seeker has made or been ordered or agreed to make a payment in compensation. There is no requirement for judgment, admission, or settlement. BDW’s remedial works constituted payment in kind sufficient to found a contribution claim.

Implications

This decision has significant implications for the construction industry and building safety litigation. It confirms that developers who proactively remedy building defects can recover costs from negligent contractors without waiting for homeowner claims. The interpretation of the BSA’s retrospective provisions supports the legislative policy that those responsible for building safety defects should bear remediation costs.

The rejection of a voluntariness principle as a bright-line rule preserves flexibility for courts to assess reasonableness on the facts. The broad interpretation of DPA duties to include developers enhances consumer protection by ensuring multiple avenues for redress against those in the construction chain.

Verdict: Appeal dismissed on all grounds. BDW entitled to pursue claims against URS in negligence, under the Defective Premises Act 1972, and for contribution under the Civil Liability (Contribution) Act 1978.

Source: URS Corporation Ltd v BDW Trading Ltd (Rev1) [2025] UKSC 21 (21 May 2025)