Building Safety: Supreme Court decision

The Supreme Court judgement in the case of URS v BDW has recently been handed down. 

The facts of the case are relevant to understanding the judgment.

Facts

• BDW developed two residential blocks of flats, one in London and the other in Leicester.  They were constructed in the early 2000’s and were completed (at the latest) by 2012.
• The flats were sold, and by 2015 BDW had also transferred its underlying long leasehold/freehold interests in both developments.
• Following the Grenfell fire tragedy, BDW undertook investigations into these developments (even though it no longer owned them) and discovered that both developments which had used an URS design, had been negligently designed and were structurally dangerous, albeit not showing any signs of cracking.
• BDW carried out investigations, temporary works, evacuation of the relevant block and permanent remedial works and then sought to claim the costs from URS despite:
  • no longer owning the developments; and
  • no physical damage (e.g. cracks) having occurred

Issues

Four issues were addressed by the Court of Appeal. Ed Freeman commented on these in his blog in August 2023.  

The four issues before the Supreme Court were:

1. Whether the fact that BDW had rectified the defects without a claim being made against it, i.e. it had done so voluntarily, meant any claim it made against URS fell outside the scope of the tortious duty of care owed by URS. The Supreme Court held that it was possible for BDW to bring a claim where the losses had been incurred voluntarily. This was different to the argument presented by URS to the Court of Appeal which had been that BDW’s cause of action had not accrued until it became aware of the defects, by which time it no longer had an interest in the buildings.
2. Whether the retrospective extended limitation periods under section 135 of the Building Safety Act 2022 applies to claims, such as BDW’s claim against URS in tort which are claims dependent on the Defective Premises Act 1972, rather than being a claim brought under section 1 of the Defective Premises Act itself.  The Supreme Court held that the extended limitation periods do apply in relation to claims dependent on the Defective Premises Act.  At the Court of Appeal hearing URS phrased this point differently arguing that there was no entitlement to rely on the extended limitation periods introduced by the Building Safety Act where proceedings had already been commenced. This was not pursued in the Supreme Court.
3. Whether section 1(1)(a) of the Defective Premises Act allows developers to bring claims where works are done to their order, or whether the section is restricted to those who acquire an interest in the relevant dwelling. The Supreme Court held that developers can, where works are done to their order, use section 1(1) to bring a claim.
4. Whether BDW was entitled to bring a contribution claim against URS under section 1 of the Civil Liability (Contribution) Act 1978, even though there had been no judgment or settlement between BDW and any third party (because BDW had voluntarily done the work without any claim being made). The Court held that they could bring such a claim. 

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