Developer BDW sued structural engineer URS for costs of remedying safety defects in residential buildings discovered post-Grenfell. The Supreme Court held that voluntarily incurred repair costs are not irrecoverable as a matter of law, that the Building Safety Act 2022 retrospectively extends limitation periods to related negligence and contribution claims, that developers are owed duties under the Defective Premises Act, and that contribution claims do not require prior judgment or settlement.
Background
Following the Grenfell Tower fire in June 2017, widespread investigations revealed serious safety defects in high-rise residential buildings across England. BDW Trading Ltd (‘BDW’), a major developer, discovered structural design defects in two sets of residential developments (‘Capital East’ and ‘Freemens Meadow’) in late 2019. URS Corporation Ltd (‘URS’) had been engaged by BDW to provide structural design services for these developments. On assumed facts, URS had negligently produced defective structural designs in breach of its common law duty of care owed to BDW.
BDW carried out remedial works in 2020 and 2021, despite no claim having been made against it by any homeowner. By the time the repairs were undertaken, BDW had disposed of all proprietary interests in the developments, and any claims by homeowners against BDW under the Defective Premises Act 1972 (‘DPA’) or for breach of collateral warranties would, prior to the Building Safety Act 2022 (‘BSA’), have been time-barred under the Limitation Act 1980.
BDW commenced proceedings against URS in the tort of negligence in March 2020. Following the enactment of section 135 of the BSA (which retrospectively extended the limitation period for DPA claims from six to 30 years), BDW amended its case to add claims under the DPA and the Civil Liability (Contribution) Act 1978 (‘the Contribution Act’).
The Issues
The Supreme Court granted permission to appeal on four grounds:
Ground 1: Voluntariness and recoverability of repair costs in negligence
Whether BDW’s repair costs fell outside the scope of URS’s duty of care and/or were too remote because they were ‘voluntarily’ incurred without enforceable legal obligation.
Ground 2: Retrospective effect of section 135 BSA
Whether section 135 applies to claims dependent on the DPA limitation period (such as negligence and contribution claims) but not themselves brought under the DPA.
Ground 3: Duty owed under section 1(1)(a) DPA
Whether URS owed a duty to BDW as developer under section 1(1)(a) of the DPA, and whether BDW’s losses were recoverable for breach of that duty.
Ground 4: Contribution without judgment or settlement
Whether BDW could claim contribution from URS under the Contribution Act notwithstanding that no homeowner had asserted a claim against BDW and there had been no judgment or settlement.
The Court’s Reasoning
Ground 1: No ‘voluntariness principle’ as a rule of law
Lord Hamblen and Lord Burrows (with whom Lord Lloyd-Jones, Lord Briggs, Lord Sales and Lord Richards agreed) delivered the majority judgment. Lord Leggatt delivered a concurring judgment.
The Court rejected URS’s contention that there exists a bright-line ‘voluntariness principle’ rendering loss irrecoverable as a matter of law where expenses are voluntarily incurred. Examining the four cases relied upon by URS — Admiralty Comrs v SS Amerika, Esso Petroleum Co Ltd v Hall Russell & Co Ltd (The Esso Bernicia), Anglian Water Services Ltd v Crawshaw Robbins & Co Ltd, and Hambro Life Assurance plc v White Young & Partners — the Court found that none established such a principle. In each case, the loss was irrecoverable primarily because it constituted pure economic loss for which no duty of care was owed, not because of a free-standing voluntariness rule.
Drawing together the threads of these four cases, we do not consider that they establish a principle of voluntariness that operates as a bright line rule of law rendering loss too remote or outside the scope of the duty of care in the tort of negligence.
The Court held that the repair costs were within the scope of URS’s duty of care because the very purpose of that duty was to guard against the type of loss — defective buildings requiring repair — that BDW suffered. On remoteness, applying the contract test of reasonable contemplation, it must have been contemplated by URS as a serious possibility that BDW would incur such costs.
The Court emphasised that voluntariness is most naturally relevant to legal causation and mitigation — fact-specific enquiries that must await trial:
The more obvious role for any principle of voluntariness is in considering whether the chain of causation from breach of duty to loss has been broken by the claimant’s own voluntary conduct or whether, subsequent to the cause of action, the claimant has failed in its so-called ‘duty’ to mitigate its loss.
Lord Leggatt, concurring, agreed that the question of whether BDW acted voluntarily is a matter of causation requiring evaluative judgment at trial, not a hard-edged rule of law. He noted, relying on Banco de Portugal v Waterlow & Sons Ltd, that payments made without legal obligation can be recoverable where the claimant had compelling reasons to act as it did:
Whether the expenditure should be regarded as incurred voluntarily rather than in consequence of the negligence of URS is a question of causation which requires a judgment to be made about how a person in the position of BDW could reasonably be expected to act in the particular circumstances, and does not involve the application of a hard-edged rule of law.
Ground 2: Section 135 BSA applies to related claims
The Court held that section 135(3) of the BSA — providing that the new 30-year limitation period ‘is to be treated as always having been in force’ — applies not only to direct DPA claims but also to negligence and contribution claims dependent on whether a DPA claim was time-barred. The language of section 135(3) uses the broad expression ‘an action by virtue of section 1’ rather than restricting itself to actions brought under section 1.
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.
The Court reasoned that restricting section 135(3) to direct DPA claims would create legally incoherent parallel regimes and undermine the legislative purpose:
If section 135(3) were restricted to actions under section 1 of the DPA then this purpose would be seriously undermined. The consequence would be that the 30-year limitation period would apply to claims brought by homeowners against a developer under section 1 of the DPA, but would have no relevance to what one may call ‘onward’ claims for contribution or for the tort of negligence brought by that developer against the contractor… directly responsible for the building safety defect.
However, the Court was careful to note that section 135 does not retrospectively alter factual questions at trial regarding the reasonableness of BDW’s actions as a matter of legal causation or mitigation.
Ground 3: Developers are owed duties under section 1(1)(a) DPA
The Court held that the duty under section 1(1)(a) of the DPA is owed to any person ‘to the order of’ whom a dwelling is built, including a developer who is ordinarily the first owner. Section 1(1)(a) covers persons who order the dwelling to be built (most obviously first owners), while section 1(1)(b) covers all those who subsequently acquire an interest. There is no inconsistency in a developer both owing and being owed the DPA duty:
Of course, a person cannot owe itself a duty. But there is no inconsistency, or logical fallacy, in saying that a developer can both owe a DPA duty (eg to a subsequent purchaser) and be owed that duty (by the builder/architect/engineer).
The Court noted that this interpretation was supported by the Law Commission Report (Law Com No 40, 1970) and leading construction law textbooks, and served the wider aim of improving the quality of construction of new housing.
Ground 4: Contribution claim permissible without judgment or settlement
Lord Leggatt (with whom Lord Hamblen and Lord Burrows agreed) held that BDW’s right to recover contribution arose when it made a payment in kind — the remedial works — in compensation for the damage suffered by homeowners. It was not necessary for any homeowner to have asserted a claim, nor for there to have been a judgment or settlement.
Lord Leggatt undertook a detailed analysis of sections 1 and 2 of the Contribution Act and section 10 of the Limitation Act 1980, concluding that the right to contribution arises when (1) damage has been suffered 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:
It is sufficient that BDW has made a payment in kind (by performing remedial works) in compensation for the damage suffered by the homeowners.
Practical Significance
This decision has far-reaching implications for the construction industry and building safety litigation in the post-Grenfell era. First, it confirms that developers who carry out remedial works to unsafe buildings are not precluded as a matter of law from recovering those costs from negligent design professionals or contractors, even where the works were undertaken without enforceable legal obligation from homeowners. The question of voluntariness is one of fact for trial, not a legal bar.
Second, the decision establishes that the retrospective extension of limitation periods under section 135 of the BSA extends beyond direct DPA claims to encompass onward claims in negligence and contribution that are dependent on the DPA limitation period. This ensures that those ultimately responsible for building safety defects cannot shelter behind the original six-year time bar when developers seek to pass on the costs of remediation.
Third, the ruling that developers are owed duties under section 1(1)(a) of the DPA significantly strengthens the position of developers who wish to bring claims against contractors and design professionals responsible for defective work.
Fourth, the clarification that a contribution claim may be brought on the basis of a payment in kind (such as remedial works) without any prior judgment, settlement or even assertion of a claim by a third party is a significant development in the law of contribution.
The Court deliberately left open the question of whether Pirelli General Cable Works Ltd v Oscar Faber & Partners should be overruled regarding the accrual of causes of action in negligence for defective buildings, noting that the issue raises difficult questions that must await a case where the court’s pronouncement would be ratio decidendi.
Verdict: The appeal was dismissed on all four grounds. The Supreme Court upheld the decisions of the Court of Appeal and the High Court, confirming that: (1) there is no rule of law rendering BDW’s voluntarily incurred repair costs irrecoverable as outside the scope of duty or too remote; (2) section 135 of the Building Safety Act 2022 applies retrospectively to negligence and contribution claims dependent on the DPA limitation period; (3) URS owed a duty to BDW under section 1(1)(a) of the Defective Premises Act 1972 and BDW’s losses are in principle recoverable; and (4) BDW is entitled to bring a contribution claim against URS notwithstanding the absence of any judgment, settlement or third-party claim, it being sufficient that BDW made a payment in kind by performing remedial works.
Source: URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21
