The role of policy and what it means for the conduct of claims for building safety disputes

In URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21, the Supreme Court has dismissed URS' appeal on all four grounds in its decision handed down on 21 May 2025. The case will be remitted to the TCC to determine the quantum of BDW's claims.

This article considers the grounds of the appeal, the Supreme Court's findings on each, the relevance of public policy and the purpose of the Building Safety Act 2022 (BSA 2022) in the Supreme Court's decision and what the decision means for the ongoing conduct of claims for building safety defects.

Background

The case concerned BDW's development of two high-rise residential buildings. BDW appointed URS to provide structural design services for those developments. BDW sold the properties after completion. However, when structural defects were subsequently discovered, it fixed the defects proactively in 2020-2021 because they presented a safety risk. BDW hadn't received any claims from the residents of the developments in connection with the defects at the time it carried out the remedial works.

BDW sought to recover its remediation costs from URS in negligence. When BDW first brought its claim, in March 2020, it could not bring claims against URS in contract or under section 1 of the Defective Premises Act 1972 (DPA 1972), because those claims were time barred. Following the enactment of the BSA 2022, BDW applied and was granted permission to amend its claim against URS to include claims under section 1 of the DPA and section 1 of the Civil Liability (Contribution) Act 1978 (Contribution Act 1978). URS appealed unsuccessfully to the Court of Appeal and then to the Supreme Court. The Supreme Court dismissed URS' appeal on all four grounds.

Grounds of Appeal to the Supreme Court

In this next section we set out each ground of the appeal, the courts' finding on each and the role that public policy and the purpose of the BSA 2022 and the DPA 1972 played in the courts' findings. 

Ground 1: The voluntariness principle

URS' position

URS argued that because BDW did not have a proprietary interest in the properties when it carried out the remedial works, and it had no enforceable obligation to undertake the repairs, those losses were not recoverable. URS argued that this was because:

• They fell outside the scope of the duty assumed by URS, not being a type and not representing the fruition of a risk that it was URS' duty to guard against; and
• They were not within URS' contemplation as a serious possibility at the time the contract was made and for which URS assumed responsibility and were therefore too remote.

Specifically, URS argued for the existence of a "voluntariness principle", a bright-line rule of law that prevents recovery of voluntarily incurred expenses.

The court's decision

The Supreme Court decided that there is no such rule of law that meant BDW's repair costs fell outside the scope of duty of care owed or were too remote. However, the court found that voluntariness is relevant to the legal principles of causation and mitigation.

The court also considered that BDW was not, in a true sense, acting voluntarily in paying for the repairs, for three reasons:

• If BDW did not remediate, there was a risk that the defects would cause personal injury to, or the death of, homeowners for which BDW might be legally liable under the DPA 1972 or in contract. The court found that such claims (against BDW), would not be time barred.
• BDW had a legal liability to homeowners under the DPA 1972, or in contract to incur the cost of the repairs. Although a DPA claim was time-barred at the point of the repair work (disregarding the possible impact of section 135 of the BSA 2022), so limitation would have barred that remedy, it did not extinguish the right.
• The court considered that there was potential reputational damage and a general public interest and moral pressure on BDW to undertake the repairs. It was therefore in BDW's interest to effect repairs and avoid damage to homeowners.

The decision and public policy

The decision is consistent with the public policy reasons behind the enactment of the BSA 2022, namely that building safety defects should be remediated by those responsible and that the law incentivises those such as BDW to remedy defects proactively. The court found that:

"… the policy of law favours incentivising a claimant in BDW's position to carry out the repairs so as to ensure that any danger to homeowners is removed." (Paragraph 69, judgment.)

Ground 2: Does section 135 of the BSA 2022 apply in the present circumstances and, if so, what is its effect?

Where a person became entitled to bring an action by virtue of section 1 of the DPA 1972, before 28 June 2022, section 135(1) extends the limitation period for that action to thirty years. Section 135(3) gives that provision retrospective effect.

URS' position

Before the Court of Appeal, URS argued that section 135 did not apply retrospectively to claims that were ongoing at the time that the BSA 2022 came into force. Before the Supreme Court, URS abandoned this contention and instead argued that BDW could not recover its repair costs in tort, or by way of a contribution for the same damage, because BDW was not legally liable for those costs at the time it carried out the repairs (because at that time any DPA claim was time-barred) and therefore they were incurred voluntarily. In these circumstances, URS argued that section 135(3) BSA should be construed as applying only to a claimant who brings an action under section 1 of the DPA and not to any "onward" actions dependent on section 1, such as BDW's claim in negligence or its claim for contribution.

The court's decision

On the specific facts of this case, the Supreme Court found that in circumstances where there is a claim for damages for repair costs in the tort of negligence (or a claim for contribution for those costs) and it is contended that there is a rule of law that the repair costs are irrecoverable because they were voluntarily incurred, or there was no liability for the same damage, because the DPA claim was time-barred, then the effect of the retrospective limitation period extends to such claims, with the consequence that there was no time-bar, as a matter of law, at the time that the repair costs were incurred. Effectively, URS could not rely on the fact that DPA claims were time-barred when BDW carried out the remedial works to say that those costs are not recoverable in tort or by way of a contribution.

As mentioned above, this ground was decided on the very specific facts of this case, and how the case has developed relative to the enactment of the BSA 2022. We are unlikely to see a claimant in the same or a similar position to the one that BDW found itself in this case. It is therefore difficult to see how the Supreme Court's decision on this ground will have any broader or wider relevance for building safety disputes.  

The decision and public policy

The court also made observations as to the purpose and policy rationale of extending the limitation period of the DPA 1972 retrospectively and referred to the explanatory notes to the BSA 2022 in addition to written submissions made by the Secretary of State for Housing, Communities and Local Government. Having considered both documents the court noted that:

• Ensuring that those directly responsible for building safety defects are held to account was central to the BSA 2022 and various of its provisions including specifically section 135.
• Developers might need to be able to bring onward claims to fund meeting its own obligations.
• It would be legally incoherent to create two contradictory parallel universes: one for direct claims by homeowners against a developer or designer or contractor for a building safety defect and another for onward claims by the developer against the designer or contractor responsible for the defect.

The decision on ground 2 accords with the government's policy for bringing about the BSA 2022, namely that serious defects that could cause injury or death should be remedied as soon as possible and that those responsible should be held to account. The law incentivises developers, such as BDW, to remedy defects.

Ground 3: BDW's claim under section 1(1)(a) of the DPA 1972

Section 1(1) of the DPA 1972 imposes a duty on those who take on work for or in connection with a dwelling to ensure that "the work is done in a professional manner, with proper materials, so that the dwelling is fit for habitation". That duty is owed if the dwelling is provided "to the order of a person", to that person, and to every person who acquires a legal interest in the dwelling.

URS' position

URS contended that section 1(1)(a) does not confer the benefit of the section 1(1) duty on a commercial developer (that is, on a person who falls within section 1(4) of the DPA 1972) who also owes a duty under the DPA 1972.  It effectively argued that a developer cannot both owe a duty and be owed a duty under the legislation. URS argued that the purpose of the DPA 1972 was to address unfairness suffered by purchasers of new dwellings. It was not to protect developers who do not inhabit dwellings.

URS also submitted that because the statutory duty cannot be excluded or limited by contract (by reason of section 6(3) of the DPA 1972), this would mean that, if the duty were owed to developers, it would interfere with the parties' freedom of contract to allocate risk.

The court's decision

The Supreme Court rejected URS’ arguments, it found that on the wording of the section, it was obvious that URS owed a duty to BDW under section 1 of the DPA 1972, as the first owner and developer of the properties. The words used in section 1(1)(a) should be interpretated as applying to any person, including a developer, to whose "order" a dwelling is being built. That person will ordinarily also be its first owner (but does not need to be). Following on from this point, the court found that developers are not the only persons who may both owe and be owed the relevant duties under the DPA 1972. Others, such as contractors, may also find themselves in such a dual role, and can bring claims against professionals and sub-contractors in its supply chain.

In response to URS' argument in connection with section 6(3) of the DPA, the Supreme Court found that URS also had a liability to the purchaser of the development and homeowners under section 1 of the DPA and it would be unable to rely on any exclusion or limitation in respect of that liability. Further, its commercial position is not materially different where that same duty is owed to the developer.

The decision and public policy

Lord Leggatt noted that the statutory duty is not limited to any category of purchaser or owner. A bank that acquires an interest in a dwelling when lending on the security of a mortgage is owed a duty under the DPA 1972. As such, the DPA 1972 is not aimed only at consumer protection (as URS argued), it is aimed at improving the quality of housing. 

Ground 4: BDW’s claim under the Contribution Act 1978

In giving the leading judgment on this ground, Lord Leggatt set out the policy of contribution claims. The Contribution Act 1978 addresses the scenario where a claimant can bring a claim against two or more defendants. However, as it would be unfair if one defendant did not have to pay anything because the claimant chose not to pursue a claim against it, the Contribution Act 1978 creates a statutory right for a defendant to recover a contribution from other potentially liable defendants so that the loss is redistributed among those liable according to the extent of their relative responsibility for the damage in question. Here, BDW sought to claim a contribution from URS on the basis that they are both liable to the homeowners in respect of defects remedied by BDW.

URS' position

URS denied that it was liable to make a contribution. URS argued that the right to contribution does not arise unless and until BDW's liability is ascertained by a judgment against the first defendant, an admission of liability or settlement. On URS' argument, no right to a contribution has yet arisen since no claim has been made against BDW, let alone admitted or settled. On this argument, since it is unlikely that a claim will ever be made against BDW now that the remedial works have been completed, BDW will never be entitled to recover a contribution from URS.

The court's decision

The court concluded that the first defendant can recover from a second defendant, when two conditions are satisfied:

• Damage has occurred for which both parties are liable; and
• The first defendant has paid, been ordered, or agreed to pay compensation for that damage, which can include payment in kind such as carrying out remedial works that can be valued monetarily.

Accordingly, BDW's right to recover a contribution from URS arose when it carried out the remedial works and the absence of any judgment against BDW or admission of liability or settlement between BDW and any of the homeowners, or even any claim against BDW, did not prevent BDW claiming for contribution.

In relation to when the cause of action accrues in relation to contribution claims, the court held that the two-year period under section 10 of the Limitation Act 1980 begins to run as soon as there is an identifiable amount of money to which the (second) defendant may be ordered to contribute. However, the exact timing of that accrual of action remains unclear. One interpretation is that the action accrues upon practical completion of the remedial works, however, in the case of progressive remedial works to a development, there may be competing (or multiple) dates for the accrual of the action.

The decision and public policy

The court's decision aligns with the policy behind the Contribution Act 1978, outlined above, namely ensuring a fair allocation of liability among responsible parties. It also dismissed URS' argument that BDW's total liability to the homeowners had to be ascertained before it could recover contribution from URS, as not supported by legal policy and in any event "plainly not a requirement that Parliament has imposed" (paragraph 265, judgment).

Conclusion

the impact of this decision on building safety disputes 

The industry awaited keenly for the Supreme Court's judgment in this matter to confirm important principles regarding the prosecution of follow-on claims by developers against its supply chain; but also to clarify the law on important aspects of claims in negligence and contribution. In our view, the judgment presents the following key take-aways in respect of building safety disputes:

• The decision is good news for developers that are getting on and "doing the right thing". This judgment now allows BDW to move forward with its claim for recovering its remediation costs before the TCC, even though it did not have an obligation to perform those works at the time it carried them out.
• Commercial developers can both owe a duty and be owed a duty under section 1 of the DPA 1972. This decision confirms that they have a direct cause of action against their supply chain, leaving the door open for developers to seek recovery of the cost of remedial works from that supply chain, including contractors and professionals.
• Related to this, we can expect to see continued and more complex litigation as building owners pursue developers for the cost of remedial works and developers and contractors seek to pass those claims on to contractors, sub-contractors and professionals using their dual standing under the DPA 1972, particularly where contractual claims are time barred or there are other hurdles to bringing a claim in contract (see next bullet point).
• The Supreme Court's consideration of section 6(3) of the DPA 1972 is interesting and indicates that contractual risk allocation as between a developer and its supply chain is irrelevant where it cuts across DPA liability.

Finally, while many across the industry anticipated that the Supreme Court would overturn the decision in Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1 as to when a cause of action accrues in the tort of negligence for a defective building, the court declined to do (because of its finding on the first ground, the court did not need to consider whether BDW already had an accrued cause of action in tort when it sold the developments). The cause of action accrues in negligence on the date the claimant first suffers damage. In the context of defective buildings:

• Where there is no physical damage, the relevant "damage" is the pure economic loss of having a defective building which has a lower value than it should have had and/or requires repair. In this case, the cause of action accrues at the latest at practical completion.
• Where the building has manifested physical damage, the cause of action accrues when the relevant damage occurred.

In both cases, a claimant has six years from accrual of the cause of action or three years from the date of discoverability, whichever expires later, to commence an action in the tort of negligence (subject to a long stop of 15 years) (Latent Damages Act 1986 (LDA 1986)).

Once again, the court considered the purpose and policy rationale behind the LDA 1986, which addressed what many regarded as the unfair consequences of Pirelli, whereby a claimant might lose their cause of action before they knew, or could reasonably have known, of its existence. The court considered that:

"… developing the common law on the tort of negligence in the context of defective buildings, so as to move to the cause of action accruing at the date of discoverability… raises difficult issues [and] might undermine the legislative solution to this problem… [because] it was based on the assumption that the cause of action accrued at a different date from the date of discoverability" (paragraphs 76 and 77 judgment).

A version of this article was published in PLC Construction on 24 June 2025.