Clarifying contribution claims: The Supreme Court decision in URS v BDW

URS Corporation Ltd v BDW Trading Ltd concerns a long running dispute over rectification works prompted by the Grenfell tragedy. BDW developed two sets of high-rise residential developments (one in London, one in Leicester), both of which were found to be structurally defective during a post-Grenfell review.  

BDW chose to proactively rectify the defects (which were unconnected to fire safety) even though it no longer had any proprietary interest in the developments. It then sought to claim a contribution to the cost of the rectification under the Civil Liability (Contribution) Act 1978 (the Act) from the structural designer involved in the development, URS.  

This scenario posed a challenge to the traditional approach to contribution claims, which was set out in our previous article on the Act. The ensuing arguments ultimately ended up in the Supreme Court.

When does a contribution claim arise?

The rules governing contribution claims are set out in our previous article. However, the rules did not previously clarify when a claim for contribution arises in a situation such as this – ie, when defects are rectified proactively, absent a court order or settlement agreement.

After careful review of the underpinning legislation, the Supreme Court found that (assuming the other ingredients for a contribution claim are present) a claim arises whenever a liable party is ordered to make, or makes or agrees to make, a payment to the injured party in compensation for damage. Significantly, it was held that a payment in kind (ie, the remedial works undertaken by BDW) was sufficient to trigger a claim.

When does the time limit to bring a contribution claim start running?

There is a two-year time limit to bring a contribution claim, which starts running when the damages paid by the party seeking a contribution are crystallised. Where litigation has been initiated, this is usually the date of the relevant court order or settlement agreement. In the URS case, the Supreme Court held that, in the absence of any such document, the time limit for bringing a claim will usually start running as soon as an identifiable sum has been agreed, to which the other party may be ordered to pay a contribution (ie, the costs of remedial works).

One point to note is that, where litigation is pursued, it is also possible for a defendant to join potential co-defendants to the proceedings before liability has been confirmed and therefore before time (for the purposes of a contribution claim) has started to run (ie, via part 20 proceedings).

What does this look like in practice?

Taking a simplified version of the current example:

On 1 January 2026:

• A developer realises that one of its buildings is structurally defective. The building has since been sold, and the present owners are within the time limit to bring a claim against the developer for the harm caused to them by the structural defects.
• The developer makes a commercial decision to rectify the defects without waiting for the owners to bring a claim.

On 10 January 2026:

• The developer realises that the designs produced by the structural engineer contributed to the defects. The structural engineer is therefore also liable to the owners for the harm caused to them by the defects.
• However, the developer does not yet know how much the rectifications will cost. The developer cannot yet claim a contribution from the engineer, as the proportional contribution required has not been calculated.

On 1 December 2026:

• The developer completes the rectification works and can calculate their total cost.
• As such, the developer can now calculate the proportional contribution required from the engineer.
• So, the developer can now bring a contribution claim against the engineer.
• The developer has two years to bring the claim before the time limit expires on 1 December 2028 (although note, this time limit only applies to contribution claims and other claims (ie, in tort, contract or under the DPA may still be in time)).

What does this all actually mean?

The decision in URS v BDW potentially opens the door for more contribution claims. Parties who anticipate potential claims and want to deal with them proactively now have greater clarity when seeking a contribution from other liable parties. There are obvious policy reasons for this decision, to encourage developers dealing with building safety issues to “do the right thing” when it comes to resolving defects. This is less positive news for parties who may be asked to contribute towards compensation payments where otherwise there may not have been a claim.  

For those in the construction industry, in particular, this judgment may be of greater concern taken together with the extended limitation periods retrospectively introduced by the Building Safety Act 2022 (Building Safety: claims against construction product manufacturers).

The other effect of URS V BDW is a potential lack of clarity over when the limitation period for bringing claims under the Act starts to run – the typical starting position was from a court order or settlement agreement, but when rectification works have taken place, time will now start to run when the costs of those works can be quantified. It is possible that a mistake on this point could leave the claiming party time-barred from bringing a contribution claim, although we suspect there may be other routes for bringing an action in this scenario.

What steps might you consider taking next?

This is a complex and evolving area of law and the above only covers one aspect which you may need to consider, if commencing or defending a contribution claim. We would always suggest seeking specialised legal advice to guide you in dealing with such claims.