Developers have been given more ammunition to recover losses from fixing historical defects, the Supreme Court confirms
The Supreme Court has handed down its judgment in URS Corporation Ltd (Appellant) v BDW Trading Ltd (Respondent) [2025] UKSC 21, rejecting all four grounds of appeal confirming the Court of Appeal’s decision developers owe duties under Section 1 Defective Premises Act 1972 (DPA). Equally, developers can commence recovery actions for losses they have suffered where buildings were designed or constructed to their order.
It is now established that claims in negligence or for contribution arising from those duties under the DPA are caught by the retrospectively extended 30-year limitation period brought in under Section 135 Building Safety Act 2022.
Those contribution claims exist even where there is no judgment or settlement crystallising a loss because the Supreme Court has held where a developer volunteers to carry out remedial works to ensure a building is safe there is no principle in law excluding the right for a developer to seek to recover those costs incurred.
It does not matter if the loss is recoverable in tort and there is no enforceable legal obligation by way of a judgment, settlement agreement nor legal interest in the building. If the losses being passed down by way of Section 1 of the Civil liability (Contribution) Act 1978 to, say, designers and consultants are incurred voluntarily then those losses are still claimable at law. That includes where a third party has not intimated any claim against the developer too. The Supreme Court has nevertheless held:
“Whether the decision to carry out remedial work should be regarded as voluntary is a fact sensitive question which will require the judge at a trial to make an evaluative judgment, having regard to the circumstances in which BDW found itself at the relevant time”.
It is worth noting that the voluntary nature of those losses may be considered as to questions over mitigation based on the facts, which we will expect to become a key argument in defence of these claims going forward, rather than an argument that they bar the claims altogether (as URS contended). The extent of the reasonable costs to be recovered in negligence will also remain up for grabs. Nevertheless, it is clearly a win for developers.
For developers who discover defects in high-rise residential buildings, the judgment is significant for these reasons, setting a marker for how losses may be ameliorated in the future. It is also another sign the Court will interpret the law to encourage developers to remediate buildings as soon as possible and share the costs with all those held to be responsible.
A link to the judgment is here.
