10 things you wanted to know about URS v BDW (but were afraid to ask)

On 21 May 2025 the Supreme Court delivered its landmark judgment in URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21, providing crucial insights into construction liability, the Defective Premises Act 1972 (DPA), and the Building Safety Act 2022 (BSA).

In brief terms, BDW is a property developer which engaged URS as a structural design consultant in connection with several high-rise residential developments. In March 2020 BDW brought a claim in negligence against URS in relation to structural design defects discovered in the developments after having sold the developments to third parties. BDW had performed remedial works from 2020 to 2021 to rectify the defects, notwithstanding the lack of proprietary interest in the development and no claim having been brought by the owners or occupiers (which at that time would have been time-barred). The cost of these works formed the basis of the claim by BDW against URS.

After issue of the proceedings, the BSA came into force, retrospectively extending certain limitation periods for accrued claims under the DPA. The DPA imposes a duty on developers, contractors and designers to build dwellings properly. BDW amended its claim to take advantage of these changes in the law.

The judgment runs to 89 pages and was delivered by a panel of seven Lords dealing with four grounds of appeal and finding unanimously in favour of BDW dismissing URS’ appeal. It brings together, and summarises, a tapestry of key decisions and principles applying to professional negligence claims in the construction arena, but for those without time to carry out a deep dive we have selected 10 key questions (and answers) that you might be wondering about following the judgment:

1. Can developers recover voluntary remediation costs?

URS argued that the repairs were carried out by BDW on developments that no longer belonged to it and without any enforceable legal obligation to do so. This was referred to in the appeal as the “voluntariness principle”, to which the Supreme Court, at para 53 of the judgment, found that the case law does not support the submission that there is a “bright line” rule of law that voluntarily incurred loss is outside the scope of the duty of care or too remote.

The court accordingly rejected that argument and held that there is no rule of law denying recovery just because the remedial works were voluntary. As such, developers like BDW can recover costs for remedial works undertaken voluntarily, even without a legal obligation, a claim against them or current ownership of the property.

This means developers who step up to carry out remedial works (often to preserve brand value, fulfil regulatory expectations or protect residents) can pursue design consultants for negligence. The court’s decision was underpinned by a number of policy issues such as:

• the risk of reputational damage and ‘moral pressure’ to carry out the repairs
• the repair costs were the obvious consequence of URS failing to perform its services and it was fair and reasonable that the risk of those losses should be borne by URS, not BDW; and
• the policy imperatives following the Grenfell tragedy to incentivise developers like BDW to carry out repairs to ensure any danger to homeowners is removed.

We expect to see more of these policy-type arguments in due course.

2. Does the retrospectivity of s.135 BSA apply to claims which are dependent on the time limit under the DPA but are not actually claims brought under the DPA?

The BSA is part of the Government’s response to (i) the need to identify and remediate historic building safety defects as quickly as possible to protect leaseholders from physical and financial risk and (ii) to ensure that those responsible are held to account.

With two exceptions, (including claims settled or determined before 22 June 2022), s.135 of the BSA extends the limitation period for claims under s.1 of the DPA to 30 years retrospectively, (with limitation for other DPA claims extended to 15 years). This means claims that were previously time-barred may now be pursued.

Because the original proceedings between URS and BDW had started before the implementation of s.135, BDW was time-barred from pursuing a DPA claim against URS. When s.135 BSA was subsequently brought into force, BDW successfully applied to amend its pleadings to include (a) a s.1 DPA claim and (b) a claim under the Civil (Liability) Contribution Act 1978.

URS contended that the limitation extension could not apply retrospectively to cover ‘collateral or incidental issues’ so that (i) BDW could not be said to have owed the homeowners a duty under s.1 DPA at the time of completion, (i.e. prior to s.135 BSA coming into force), and therefore (ii) there was no liability for the same damage. The court rejected this argument and once again listed a number of policy considerations to support its reasoning, including:

• a central purpose and policy of the BSA in general, and s.135 in particular, was to hold those responsible for building safety defects accountable
•  if s.135 were restricted to actions under s.1 of the DPA then this purpose would be seriously undermined. For example, developers in receipt of claims by homeowners would have no means of bringing ‘onward’ claims for contribution against the contractors directly responsible.

3. Are developers owed duties under the DPA?

The court confirmed that the duty under s. 1(1)(a) of the DPA extends beyond individual purchasers to include commercial developers.

This is good news for developers commissioning design or construction works, but not so good news for contractors which remain on risk for damages where defective works render dwellings unfit for use, even after resale.

4. Do contribution claims require prior third-party claims?

The court clarified that under the Civil Liability (Contribution) Act 1978, a party can seek contribution from another responsible party without having been sued or having settled a claim themselves. Payments in kind (such as carrying out remedial works at no cost) can be recoverable losses.

5. When does the cause of action accrue in cases of economic loss due to design defects?

Where there has been negligent design and, as a result, ‘damage’ is caused to a building, (e.g. cracking), that damage is pure economic loss, not physical damage.

The court affirmed that the cause of action in the tort of negligence occurs when the relevant ‘damage’ occurs and not when that damage is discovered or could have been discovered. The court acknowledged the potential unfair consequences for claimants which might lose their cause of action before they knew, or could reasonably have known, of its existence, but pointed to the availability of a three-year limitation period starting from the date of discoverability for pure economic loss resulting from latent defects.

6. Is physical damage a requirement to a claim under the DPA?

The court held that the presence of a defect rendering a building unfit for habitation is sufficient to bring a claim under the DPA even if no physical damage has occurred. It is sufficient to show that the building is rendered unfit for human habitation due to a design or construction flaw.

This means that safety and habitability issues such as inadequate fire protection or defective structural design can now trigger valid claims even without visible damage. This lowers the bar for liability and places a greater onus on early-stage quality assurance.

7. Can DPA duties be contracted out?

Any contractual terms attempting to exclude or limit liability under the DPA are void. This ensures that parties cannot circumvent statutory duties through contract clauses. Those involved in construction projects will need to be aware that contractual exclusions and disclaimers in appointment documents will not act as a shield from DPA obligations.

8. Has Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1been overturned?

That possibility, after all, was the reason that a seven-person panel was convened to hear this appeal. Had BDW in any event already accrued a cause of action in the tort of negligence at the time it sold the developments?

According to the Court of Appeal, BDW’s cause of action in the tort of negligence had already accrued, at the latest at the date of practical completion, and could not have been lost by the subsequent sale of the developments.

Given the court’s rejection of the voluntariness principle and their consequent dismissal of URS’ appeal on Ground 1, this issue fell away and will need to be determined on another day, in another appropriate case.

9. What are the implications for the construction industry?

Notwithstanding a potentially missed opportunity to reconsider Pirelli, this landmark decision from the Supreme Court sets a precedent that may lead to an increase in claims for historical building defects.

This emphasises the importance for construction professionals to ensure compliance with safety standards and to be aware of their ongoing liabilities. Initiatives, including encouraging large developers to sign a “Developer Remediation Contract” and the launch of a “Responsible Actors Scheme”, will seemingly be supported through judicial decisions so as to speed up the remediation process and reduce the risks posed by unsafe residential buildings to their residents.

Consultants must anticipate increasing scrutiny and potential claims long after project completion. Whilst this judgment focused on consultants (with express reference to engineers and architects), contractors often sit in a similar position regarding design responsibility (especially on D&B projects).

10. What are the implications for the insurance industry?

This judgment makes it clear that the courts will continue to give effect, post-Grenfell, to the proposition that it is fair, where building developers and other contractors are responsible for building safety defects, that they should cover the costs of remediation.

Insurers will have noted this policy trend in recent judicial decisions and, when considering whether, and how, to defend claims of this type, will now be in no doubt that the courts are likely to give short shrift to overly technical arguments, meaning the focus will need to be on defending cases where the merits are otherwise strong.

Access for the likes of developers to claims arising out of the DPA, with its extended limitation periods and the inability of contractors and construction professionals to contract out of, or limit, their liability means that, after cautiously dipping their toes back into the construction professional indemnity market in the wake of retrenching post-Grenfell, this will no doubt cause insurers to pause and reflect.