The Supreme Court gives a resounding answer to the question: who pays for the costs of remediating historic building safety defects?
On 21 May 2025 the Supreme Court handed down its eagerly anticipated judgment in URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21. This is the first time that the Supreme Court has considered the relatively recent Building Safety Act 2022 (“the BSA”) and indeed the much older Defective Premises Act 1972 (“the DPA”).
The decision is largely positive for developers who are seeking to recover the cost of remediating historic building safety defects, but decidedly less so for the members of the supply chains (including professional advisers) that have been the target of such claims. The government, which made written submissions to the Supreme Court, will no doubt consider the judgment to reflect the key principle that underpins the BSA – namely to remove any barriers to advancing claims against parties involved in the design and construction of defective buildings for the cost of remediating those defects.
The well-known developer BDW Trading Ltd (“BDW”), which is part of the Barratt Homes group, had engaged a structural engineer, URS Corporation Ltd (“URS”), to provide structural design services for the construction of two residential developments, each comprising several blocks of flats. The various blocks achieved practical completion on a range of dates between 2005 and 2012.
Investigations carried out following the Grenfell fire tragedy identified safety defects associated with URS’s design. In 2020 and 2021 BDW carried out remedial works. Importantly, by this stage, BDW had already sold the buildings and no longer had any proprietary interest in them. In addition, no claims had been initiated against BDW by the building owners; indeed, such claims would have been time-barred.
BDW brought a claim against URS in tort seeking to recover the cost of the repairs.
Subsequently, on 28 June 2022, the BSA came into force. Among other measures aimed at broadening the scope of liability for those responsible for creating building safety defects, s.135 of the BSA introduced an extended retrospective limitation period of 30 years for claims under s.1 of the DPA. BDW sought permission to amend its statement of case to bring a claim under the DPA. It also claimed under the Civil Liability (Contribution) Act 1978 (“the Contribution Act”) on the basis that both BDW and URS were liable to the building owners under the DPA for the same damage.
Permission to amend was granted. BDW’s appeal to the Court of Appeal was dismissed.
The Supreme Court granted permission to appeal on four grounds, which we consider below.
Ground 1: In relation to the claim in tort, was the damage outside the scope of duty of care and/or too remote because it had been voluntarily incurred (disregarding the possible impact of retrospective limitation under s.135 of the BSA)?
URS argued that BDW had voluntarily gone back to remediate the developments despite the fact that there was no enforceable legal obligation to do so. This was because BDW had a limitation defence to any claim from the homeowners. Therefore, according to URS, this “voluntariness principle” provided a bright-line rule of law explaining why the loss was outside the scope of duty and/or was too remote.
The Supreme Court rejected this argument and found that the principle of voluntariness falls to be considered within the concepts of legal causation and mitigation. These enquiries depend upon an assessment of the reasonableness of the claimant’s conduct, which is highly fact-specific. Therefore, these were matters that would need to be determined at full trial (noting that this was an appeal from the trial of a preliminary issue and an application to amend).
Nonetheless, based on the assumed facts, the Supreme Court went on to give a fairly clear indication to the courts below as to the likely outcome of this assessment. Disregarding the possible effect of s.135 of the BSA (i.e. retrospective limitation under the DPA), the court held that there were three strongly arguable features indicating that URS had not acted purely voluntarily.
First, had the repairs not been carried out, there was a risk that the defects could cause personal injury or death. Those claims would not be time-barred. This reasoning seems attractive in principle, although if, say, the relevant building had been evacuated, there might be no such risk in practice.
Secondly, BDW had a legal liability under the DPA or in contract to incur the cost of repairs. When the repairs were carried out, the claims by the homeowners would have been unenforceable because they were time-barred (disregarding the possible impact of s.135 of the BSA). The court noted that such a limitation defence bars the remedy but does not extinguish the right. This seems to us to be a rather technical distinction, given that in practice BDW did have a strong limitation defence.
Thirdly, there would be potential reputational damage to BDW if they did nothing once the defects had been identified. Even though it had been held at first instance that BDW could not recover damages for “reputational damage”, the Supreme Court held that this was essentially irrelevant in considering whether loss of reputation was a factor in making its actions not truly voluntary. Some might well argue that this logic is difficult to square. The Supreme Court also noted that there was a “closely linked” factor in that there was a general public interest and moral pressure for BDW to undertake the repairs.
While the particular reasoning behind some of these features may be open to debate, the Supreme Court went on identify the underlying policy considerations, which are perhaps harder to dispute. Ultimately, the court concluded that it was fair and reasonable that the risk of that loss should be borne by URS. Moreover, the policy of the law favours incentivising a claimant in BDW’s position to carry out repairs so as to ensure that any danger to homeowners is removed.
Ground 2: Whether the retrospective extension of the limitation period for a DPA claim has relevance to a claim in tort or a contribution claim?
The court observed that the written submissions provided on behalf of the Secretary of State for Housing, Communities and Local Government helpfully explained the background to the BSA, and the policy and purpose underlying the BSA in general and s.135 in particular. The reader is referred to paragraphs 78 to 87 of the judgment.
Notably, the government legal team comprised three KCs, no doubt reflecting the government’s desire for there to be a broad judicial interpretation of the BSA. Needless to say, the government submissions were strongly supportive of BDW’s case.
Against this backdrop, the Supreme Court held that as a matter of language, s.135 of the BSA is not restricted to actions under s.1 of the DPA. It can equally apply to actions dependent on s.1, such as where the claim made is for damages for the tort of negligence or for contribution under the Contribution Act (which the court described as “onward claims”).
After referring to the Explanatory Notes to the BSA and to the government’s submissions, the Supreme Court observed that this broad interpretation was consistent with the central purpose and policy of the BSA in general and s.135 in particular: namely to hold those responsible for historic building safety defects accountable. This was not just a matter of justice between the developers and those ultimately responsible; a developer might need to be able to bring onward claims in order to be able to fund the meeting of its own obligations to homeowners.
A slight word of qualification. The court also found that s.135 does not retrospectively affect any issue at trial as to the reasonableness of BDW’s actions in carrying out the remedial works as a matter of legal causation or mitigation. In other words, where a developer such as BDW has undertaken remedial work before the BSA came into force, the reasonableness of that conduct will be assessed with reference to the position when the decision was made. In this case, the homeowners’ claims under the DPA would have been time-barred at that point in time. Nonetheless, given the court’s findings in relation to Ground 1, this is unlikely to present an insurmountable hurdle for developers in BDW’s position.
Ground 3: In relation to the DPA claim, did the structural engineer owe a duty to the developer?
The Supreme Court held that a developer such as BDW can both owe a DPA duty (e.g., to a subsequent building owner) and be owed a DPA duty (e.g., from a structural engineer).
This conclusion was founded primarily on the statutory interpretation of the language of the DPA. Notably, however, the Supreme Court also referred to the broader purpose of the DPA, observing that the policy of ensuring the safety of dwellings would be better served if BDW itself had rights under the DPA against a party primarily liable for the defects.
Ground 4: In relation to the contribution claim, is the developer entitled to bring a claim against the structural engineer notwithstanding there has been no judgment or settlement between the developer and the building’s owners and/or occupiers?
The Supreme Court held that BDW was not prevented from bringing a contribution claim by the fact that there had been no judgment, settlement and/or intimation of the claims by third-party homeowners. It is sufficient that a developer has performed the repair works, which will be treated as a payment in kind.
Accordingly, a developer will not have to sit back and wait for a formal claim to be advanced by a homeowner before commencing remedial works (an approach that the Court of Appeal had noted would “reward indolence”). Instead, the Supreme Court has affirmed that a developer can take a more proactive approach and undertake such works without prejudicing its claim in contribution.
The judgment very much reflects and provides support for the key aims and principles which underpin the BSA, namely that there should be no legal barrier to advancing claims against those responsible for creating a safety risk in buildings.
Developers and building owners that have had to incur substantial costs to remediate defective buildings will welcome this decision as it helps to pave the way for claims against suppliers who are ultimately responsible for the relevant building safety defects. The expansive approach of the Supreme Court will most obviously assist claimants where claims are brought in contribution or under the DPA in similar circumstances.
As a more general point, there are other aspects of s.135 of the BSA that were not scrutinised in this appeal, for example, a defendant’s “Convention rights” defence (s.135(5)). Again, this is a fact-sensitive enquiry that the Court of Appeal noted would need to await full trial.
In addition, the BSA introduced a raft of other provisions that are also aimed at holding to account those who are ultimately responsible for building safety defects. For example, sections 148-149 of the BSA provide new and direct causes of action against manufacturers of defective construction products and cladding products. The provisions concerning cladding products are also subject to retrospective limitation. Another striking innovation introduced by the BSA is the novel remedy of Building Liability Orders (BLOs), where we are already seeing reported decisions (such as in 381 Southwark Park Road RTM Co Ltd v Click St Andrews Ltd [2024] EWHC 3569 (TCC)).
It remains to be seen whether URS and BDW will now advance to a full trial to determine the issues that the appeal courts found would have to be determined there. Either way, in the coming months and years, we can surely expect further reported decisions on these various aspects of the BSA. This Supreme Court judgment seems to signal that, where possible, courts will try to adopt a broad, purposive approach to statutory interpretation. Moreover, it is clear that the government is keen to see that the ambitious aims of the BSA are achieved, so may be willing to step in to legislate further in the event that the courts adopt a more restrictive approach on these issues.
Accordingly, while every case is fact sensitive, defendants facing claims in relation to building safety defects should be cautious before placing too much reliance upon technical defences that could be considered inconsistent with the aims of the BSA.
This judgment will be welcomed by building owners (and their property insurers) and developers (and their liability insurers) bringing claims under the DPA and/or in contribution. This has a rather obvious corollary: contractors and other construction professionals who were involved in the historic design and construction of defective buildings (and their insurers) can expect to see claims brought down the contractual chain.
If you’d like to discuss this topic further, please get in touch with our construction specialists.
Edwin Millburn - Partner and Head of Construction SIG (Property Risks and Coverage)
Gary Thwaites - Partner, Construction Team (Professional and Financial Risks)
Emily Powell - Solicitor, Property Risks & Coverage
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