Building Safety Accountability: Key Takeaways from URS v BDW

• 3 June 2025
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The Supreme Court has underlined the importance of holding those responsible for building safety defects accountable in an important recent case. The decision in URS Corporation Ltd v BDW Trading Ltd will be welcome news for proactive developers who carried out building safety-related remediation works voluntarily, and are now looking to recover the costs from negligent contractors. 

Background

This case involved a major property developer- BDW Trading Ltd (“BDW”)- and a structural design engineer – URS Corporation Ltd (“URS”). During investigations prompted by the Grenfell Tower tragedy, BDW noticed design defects in multiple high-rise buildings which it had developed. At the time, any claims which affected homeowners may have had against BDW under the Defective Premises Act (“DPA”) were time-barred. Despite this, and the fact that it no longer had any proprietary interest in the buildings, BDW voluntarily carried out works to rectify the defects. 

In March 2020, BDW brought a negligence claim against URS to recover the remedial costs. The Building Safety Act 2022 (“BSA”) later extended the limitation period for a claim brought under schedule 1 of the DPA (which imposes a duty to build dwellings properly) from 6 to 30 years. As a result of this change in the law, BDW amended its claim against URS to include a new claim under the DPA and the Civil Liability (Contribution) Act 1978 (“the Contribution Act”). 

The Supreme Court ultimately ruled against URS on four separate grounds of appeal on various preliminary issues. Below, we examine the issues and the Court’s decision. 

Issue 1: What was the impact on the negligence claim of BDW incurring the costs voluntarily?

The first ground of appeal required the Court to consider, in relation to the negligence claim, whether (a) BDW had suffered actionable and recoverable damage; or (b) the damage was outside the scope of duty of care and/or too remote because it was voluntarily incurred. 

Under a professional services contract, URS assumed responsibility to BDW by committing to provide structural designs with reasonable care. 

It was not in dispute that URS was in breach of the duty of care owed to BDW in respect of the design and that BDW had incurred repair costs in respect of the buildings which were caused by the breach of duty. 

However, URS argued that the losses suffered by BDW related to works which had been carried out after BDW no longer had a proprietary interest in the development and in the absence of any enforceable obligation to do so, and that these losses were therefore not recoverable on the basis that:

• they fell outside the scope of the duty assumed by URS; and 
• they were not within URS’ contemplation at the time the contract was entered into and were therefore too remote. 

The Court considered the application of the law on the scope of duty of care and remoteness to the facts of this case. It held that:

• It was clear that the purpose of URS’ duty of care was to prevent BDW from suffering the exact type of loss incurred (i.e. the repair costs) and that, absent any “voluntariness principle”, such loss was within the scope of URS’ duty of care. 
• It ought to have been reasonably contemplated by URS as a serious possibility at the time of assuming responsibility that BDW would suffer the loss incurred and therefore this loss was not too remote. 

Having concluded that the damage was not outside the scope of duty nor was it too remote, the Court then turned to consider whether a so-called “voluntariness principle” applied, which might prevent recovery of the cost of repairs incurred by BDW. 

The Court did not consider that such a principle existed. If BDW had failed to carry out the repairs, there was a very real risk that the defects in the properties could have caused personal injury or death to the residents, for which BDW might be liable. Furthermore, there was a risk of reputational damage to BDW, if it was aware of the risk of personal injury or death posed to the homeowners, and failed to rectify the same. In short, BDW had no realistic alternative, other than to carry out the repairs.

Issue 2: Did the extended limitation period provided for by the BSA apply in these circumstances?

The second ground of appeal concerned the scope of s.135(3) BSA.  Section 135(1) amended the Limitation Act 1980 to increase the period within which a person can bring a claim “by virtue” of s.1 or s.2A DPA to 30 years, if that person was (by virtue of the amendment) entitled to bring a claim on 28 June 2022.  Section 135(3) provides that, in relation to an action by virtue of s.1 DPA, the amendment “is to be treated as always having been in force”.  

The question was whether the extended limitation period applied here, where BDW’s  claim against URS was in negligence but depended on an otherwise time-barred DPA claim to establish loss,  rather than BDW’s claim being brought under s.1 DPA.

The Supreme Court found that as a matter of language and context, s.135(3) is not restricted to actions under s.1 DPA; it can equally apply to actions dependent on s.1.  It held that “a central purpose and policy of the BSA in general, and section 135 in particular, was to hold those responsible for building safety defects accountable”.  If s.135(3) were restricted to actions brought under s.1 DPA, then that purpose would be seriously undermined.  It was also a matter of justice between developers and their supply chains, and of practicality in covering remedial costs, that s.135 should not be restricted.  To do so would be legally incoherent, creating two different approaches for direct claims by homeowners, and onward claims by the construction parties. 

That said, the Supreme Court made the important observation that, when considering the reasonableness of BDW’s decision to incur remedial costs, which decision was made prior to s.135 coming into force, that should be determined by the facts as they stood at the date of the decision to do those works; namely, that it should be taken into account that at the time the costs were incurred that BDW had a limitation defence to any DPA claim.

Accordingly, the extension of the limitation period for claims made by virtue of s.1 DPA will apply in circumstances where BDW was suing URS in negligence for costs that BDW would have been liable for under the DPA had BDW not done the remedial works, and where BDW was also claiming a contribution for those costs under the Contribution Act, even in the context where BDW had voluntarily incurred those costs.

Issue 3: Did URS owe a duty to BDW under the DPA?

S.1(1) DPA states that: 

A person taking on work for or in connection with the provision of a dwelling (whether the dwelling is provided by the erection or by the conversion or enlargement of a building) owes a duty –

(a)  if the dwelling is provided to the order of any person, to that person;

…

to see that the work which he takes on is done in a workmanlike or, as the case may be, professional manner, with proper materials and so that as regards that work the dwelling will be fit for habitation when completed.

The question was whether a duty that arose under the DPA as a consequence of a dwelling being provided “to the order of any person” extended to a duty being owed to a developer (in this case BDW). 

The Supreme Court found that the words had a straightforward grammatical meaning which should be taken into account. Accordingly, a developer is owed a duty under the DPA where a property is being built to their order. 

Whilst the DPA was primarily intended to confer rights on purchasers, its intention was also to provide rights to persons who had contracted to provide the dwelling. It was possible to both owe and be owed a duty under the DPA. 

Once it is established that a duty is owed under the DPA it then follows that losses incurred by a developer in remedying defects caused by a breach of duties are recoverable.

Issue 4: Could BDW bring a claim under the Contribution Act?

The final ground of appeal was whether BDW was entitled to bring a claim against URS pursuant to s.1 Contribution Act notwithstanding that:

1. no judgment had been made against BDW;
2. no settlement had been reached between BDW and any third party; or 
3. no third party had ever asserted a claim against BDW. 

In circumstances where two or more people (“D1” “D2” etc.) are liable in respect of damage by another person, and a claimant (“C”) seeks compensation, the Contribution Act enables the loss to be redistributed among those liable according to the extent of their commensurate responsibility for the damage, meaning no one person/entity bears responsibility for an unfair proportion of the damage.

Here, BDW sought to recover a contribution from URS for the cost of the remedial works on the basis that both BDW and URS were liable to the homeowners in respect of the damage remedied. 

URS claimed that the correct interpretation of the Contribution Act was that D1 (here, BDW) could not seek contribution from D2 (URS) unless and until the existence and amount of D1’s liability to a claimant (here, the homeowners) had been established by either a judgment against D1, an admission of liability by D1 or a settlement with the claimant and that therefore, in the absence of any of those events occurring, BDW’s claim for contribution against URS was premature. 

BDW’s alternative argument was that the right to contribution arose as soon as C suffers damage for which D1 and D2 are liable, even if C has not yet sought compensation from either of D1 or D2. 

The Court held that the right of D1 to recover a contribution from D2 only arises once: 

1. damage has been suffered by C for which D1 and D2 are each liable; and 
2. D1 has paid or been ordered or agreed to pay compensation in respect of the damage to C.

By making payment in kind (paying for the remedial costs) in compensation for the damage suffered by the homeowners, BDW was not prevented from bringing a claim for contribution against URS. 

Conclusion

Whilst the full impact of this case will not be understood until the principles are tested at any subsequent trial, the judgment should be welcomed by those developers who were quick to carry out remedial works for which they were not liable at the time, and are now looking to recover costs from contractors.

From a lawyer’s point of view, the decision offers welcome clarity on various aspects of the DPA and appears to arm it with more teeth than previously envisaged. It will be interesting to see whether the decision will result in increased use of the DPA by developers looking to recover costs from contractors.