URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21: the Building Safety Act 2022 in the Supreme Court

Introduction

The Supreme Court handed down its long awaited decision in URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21 on 21 May 2025. This was the first time that the Building Safety Act 2022 (‘BSA 2022’) had been considered by the Supreme Court. It was also the first time that the DPA 1972 (‘DPA 1972’) has been considered at the apex appellate level, save for obiter remarks in cases such as Murphy v Brentwood DC [1991] 1 AC 398. The judgment of Lord Hamblen and Lord Burrows (with whom Lord Loyd-Jones, Lord Briggs, Lord Sales and Lord Richards agreed) in respect of Grounds 1, 2 and 3 sets out a number of important points as to the policy of not only the BSA 2022 but also the DPA 1972. It is, however, Lord Leggatt’s judgment in respect of the contribution claim (Ground 4) that changes our understanding of contribution claims. Lord Leggatt set out the elements of a contribution claim under the Civil Liability (Contribution) Act 1978, disagreeing with the Court of Appeal’s conclusions, even though the outcome in this case remained the same.

Factual background

BDW is a major developer, with brand names including Barratt Homes and David Wilson Homes. URS provides consultant engineering services. URS had provided structural designed for a number of BDW’s medium / high-rise flat developments.

In 2019, following investigations prompted by the Grenfell Tower tragedy, BDW found structural design defects in two of its developments.  In both cases, URS was responsible for the structural design.

By the time that these defects were discovered, however, BDW no longer had any proprietary interest in either of the developments. The flats had been sold on long leases to residential purchasers and the freeholds had been transferred to property management companies.

Despite not having any proprietary interests, BDW carried out extensive remedial works to the developments, and then sought to recover its losses from URS.

The proceedings in the courts below

BDW issued its claim before the BSA 2022 was in force and so initially only claimed in negligence. A trial of preliminary issues was ordered, which were determined by Fraser J in October 2021 ([2021] EWHC 2796 (TCC)). The Judge held:

1. The losses claimed by BDW were, in principle, recoverable as being within the scope of URS’s duty of care in tort;
2. BDW’s cause of action in tort had accrued no later than the date of practical completion, not when the defects were discovered. It followed that BDW had suffered a recoverable loss because it held a proprietary interest when the cause of action accrued.

When the BSA 2022 came into force, BDW successfully applied to amend its claim to include a claims under the DPA 1972 and the Civil Liability (Contribution) Act 1978.

URS appealed to the Court of Appeal both against Fraser J’s decision on the preliminary issues and the decision to allow BDW’s amendments.

The Court of Appeal dismissed both appeals and URS then sought permission to appeal to the Supreme Court ([2023] EWCA Civ 772).

The Supreme Court gave permission to appeal and directed that the appeal should, unusually, be heard by a panel of seven judges. The reason for having a seven-judge panel was that the Supreme Court might be invited to depart from the decision of the House of Lords in Pirelli General Cable Works Limited v Oscar Faber & Partners [1983] 2 AC 1 (‘Pirelli’). In Pirelli, the House of Lords controversially held that the date of accrual of a cause of action in tort for damage caused by the negligent design or construction of a building was the date when the damage came into existence, and not the date when the damage was discovered. As the Supreme Court in URS v BDW noted, this led to Parliament enacting the Latent Damages Act 1986 to ameliorate the position of claimants who might otherwise see their claims barred by limitation before they even knew that they had a cause of action. In fact, the Supreme Court did not find it necessary to decide whether to overrule Pirelli; this will have to await another case or even statutory intervention.

The grounds of appeal

The Supreme Court gave URS permission to appeal on four grounds. These did not correspond, either in terms of substance or numbering, with the grounds of appeal to the Court of Appeal.

1. Ground 1: in relation to BDW’s claim in negligence (and putting to one side the possible impact of section 135 of the BSA 2022), had BDW suffered any actionable loss and recoverable damage?  Or, was the damage outside the scope of the duty of care and/or too remote because it was voluntarily incurred?
2. Ground 2: Does section 135 of the BSA 2022 apply in the present circumstances and, if so, what is its effect?
3. Ground 3: Did URS owe a duty to BDW under section 1(1)(a) of the DPA 1972 and, if so, were BDW’s alleged losses of a type which are recoverable for breach of that duty?
4. Ground 4: Was BDW entitled to bring a claim against URS pursuant to section 1 of the Civil Liability (Contribution) Act 1978, notwithstanding that there has been no judgment or settlement between BDW and any third party and no third party has ever asserted any claim against BDW?

Ground 1: ‘voluntarily’ incurred losses

It was not in dispute that URS owed a duty of care to BDW not to cause them pure economic loss because they fell within the Hedley Byrne exception, namely, that there was an assumption of responsibility by URS they had undertaken through the contract of professional services to take reasonable care in providing structural designs to BDW, such that the buildings constructed on the basis of those designs would not be defective. It was also not in dispute that URS had breached that duty by providing negligent structural designs which caused defects in the buildings. URS also accepted that had BDW remedied the defects before they sold the buildings – while they still had a proprietary interest in the properties – that the cost of the repairs would have been recoverable.

URS argued, however, that once BDW had no proprietary interest in the buildings, and no enforceable legal obligation to carry out the repairs, the loss suffered by BDW was outside the scope of the duty of care because the losses were not of a type and did not represent the “fruition of a risk” that it was URS’ duty to guard against. They also argued that these losses were too remote. URS argued that there was a “voluntariness principle” that explained why such losses were irrecoverable.

URS argued that where a party pays out monies voluntarily for damages that they are under no legal obligation to rectify but often doing so for sound policy and/or commercial and/or reputational reasons, such a ‘principle’ prevents that party from recovering those damages. For example, in Esso Petroleum Co Ltd v Hall Russell & Co Ltd (The Esso Bernicia) [1989] AC 643, Esso’s oil tanker was damaged in an accident caused by a defect in the tugs that were towing her into an oil terminal in Scotland. Esso paid out money to the Shetland Islands Council for persons, primarily the crofters, who had been affected by the oil spillage. In that case, the House of Lords held that those sums were irrecoverable because they constituted pure economic loss; and pure economic loss cannot (normally) be recovered in the tort of negligence.

In the four cases relied upon by URS, none of the claimants could recover for those voluntary payments. The Supreme Court held, however, that the reason for that was not because there was a bright line rule denying recovery because the payments were voluntary. Instead, it was because the voluntary payments either constituted pure economic loss rather than loss directly consequent on damage to the claimants’ property, so that there was no duty of care, or the loss was too remote based on the specific facts of the case.

The Court considered that the question of voluntariness should be considered as part of the causation and mitigation arguments rather than those about the scope of duty or remoteness. It is an issue that falls to be considered at trial whether, on the specific facts of the case, the voluntary payments has broken the chain of causation or whether the Claimant has failed in its duty to mitigate its loss. The court will need to look at the reasonableness of the claimant’s conduct namely “whether the claimant could have avoided its loss by taking reasonable action or whether expenses (or other additional losses) incurred, increasing its loss, were reasonably incurred.” (paragraph 60)

The appeal on this ground failed. This was a matter for trial, not for an interlocutory application. The Supreme Court considered, however, that there were three features of the assumed facts that indicated that BDW was not, in a true sense, acting voluntarily in paying for the repairs.  Those were:

1. If BDW had done nothing, there was a risk that the defects would cause personal injury or death to the homeowners for which BDW might be legally liable either under the DPA 1972, or in contract for breach of collateral warranties. Such claims would not be time-barred because the cause of action would run from date of discovery/discoverability of the injury or the discretion under section 33 of the Limitation Act 1980 that would disapply the primary limitation period for personal injuries would apply.
2. BDW had a legal liability to the homeowner under the DPA 1972 or in contract to incur the cost of repairs. Although limitation would have barred the remedy, it did not extinguish the right.
3. There was potential reputational damage to BDW if BDW did nothing once it knew of the danger to homeowners such that it was in BDW’s commercial interest to effect the repairs.

The Court found that BDW had no realistic alternative. They were not exercising a ‘sufficiently full and free choice’ to be considered to be acting voluntarily. The decision accords with the underlying policy reasons of bringing about the BSA post-Grenfell, namely that defects as grave as ones that can cause injury and death must be remediated, but also, that parties who were negligent and are responsible for the defects, should be held to account.

Ground 2: Limitation and the Building Safety Act 2022

Ground 2 concerned “Does section 135 of the BSA apply in the present circumstances and, if so, what is its effect?”

As neatly summarised by the Supreme Court at paragraph 96 of the judgment:

“…what is in dispute is whether section 135 also applies where, as in this case, an action is brought claiming damages for repair costs in the tort of negligence, or there is a claim for contribution, and it is contended that the repair costs were voluntarily incurred, or that there was no liability for the same damage, because the DPA 1972 claim against BDW by homeowners was time-barred. In other words, does retrospectivity of section 135 apply to claims which are dependent on the time limit under the DPA 1972, but are not actually claims brought under the DPA 1972.”

The background circumstances to this ground are as follows:

• BDW issued proceedings before the coming into force of the BSA. Given that timing it claimed only in negligence.
• In June 2022, the BSA 2022, including section 135, came into force.
• BDW immediately applied to amend their claim. The amendments sought: (i) to delete the previously pleaded admissions that at the time that the defects were discovered and the repairs undertaken, any liability which BDW had to any third party was time-barred, and to introduce instead the allegation that, by reason of section 135, BDW’s liability to such third parties under the DPA 1972 was not time-barred at the time of the repairs; (ii) to bring a new claim under the DPA 1972 and for contribution.
• These amendments were granted at first instance, this decision was appealed.

The key parts of section 135 of the BSA 2022, for the purposes of this ground, are as follows:

• Section 135(1) provides for the insertion of a new provision into the Limitation Act 1980, providing as follows:

               “‘4B Special time limit for certain actions in respect of damage or defects in relation                        to buildings

                (1) Where by virtue of a relevant provision a person becomes entitled to bring an ac                      tion against any other person, no action may be brought after the expiration of 15                        years from the date on which the right of action accrued…

                (4) Where by virtue of section 1 of the DPA 1972, a person became entitled, before the                  commencement date, to bring an action against any other person, this section applies                  in relation to the action as if the reference in subsection (1) to 15 years were a refer                      ence to 30 years.”

• Provision for the retrospectivity of that insertion is at section 135(3):

                “The amendment made by subsection (1) in relation to an action by virtue of section 1                    of the DPA 1972 is to be treated as always having been in force.”

The Supreme Court rejected URS’ appeal, finding that actions which were dependent upon section 135(1) could be pursued (including e.g. negligence), even if they were not actions under s1 DPA 1972 themselves.

The Supreme Court relied upon both textual and contextual reasons, in interpreting section 135 of the BSA 2022.

In respect of its textual interpretation, its key findings were as follows:

• At paragraph 99 of the judgment, the Supreme Court references the wording “By virtue of” and “the action” suggests a broader expression of an action, than simply section 1 of the DPA 1972, and found that “as a matter of language, section 135(3) is not restricted to actions under section 1 of the DPA 1972; it can equally apply to actions dependent on section 1, such as negligence.”
• The broader interpretation was also supported by the broadly worded title given to the new section (4B) inserted into the Limitation Act 1980, namely “special time limit” for “certain actions in respect of damage or defects in relation to buildings”, which is broad, and could include claims for damages due to negligence.

In respect of its contextual interpretation, the following key findings were made:

• The Supreme Court discussed at various stages, the purpose of Part 5 of the BSA 2022, for example at paragraph 106, in referencing the Explanatory Notes to the BSA 2022, “ensuring that those directly responsible for building safety defects are held to account was central to the BSA and various of its provisions, including specifically section 135.”
• The Supreme Court held that:
  • If section 135(3) were restricted to actions under section 1 of the DPA 1972 then this purpose would be seriously undermined. 30-year limitation period would apply to claims brought by homeowners against a developer under section 1 of the DPA 1972, but would have no relevance to what one may call “onward” claims brought by that developer against the contractor (paragraph 107).
  • As such, the wider interpretation was needed both as a matter of justice as between developers and those responsible, but also to allow developers to fund meeting own obligations (paragraph 108).

The Supreme Court also made various findings as to how URS’ position was incoherent (see e.g. paragraphs 109-117).

A further argument put forward by URS was that BDW’s argument would impermissibly falsify history, as it would requires a court to conclude that section 135(3) deems, contrary to reality, that at the time BDW procured the remedial works: (i) the retrospectively extended limitation periods applied; and (ii) the homeowners had enforceable claims against BDW under the DPA 1972.

The Supreme Court dismissed this argument, making the following interesting findings:

• At paragraph 120, “Any statutory provision which applies retrospectively does, re-write history in the sense that a legal state of affairs is deemed to be different to how it was at an earlier time.”
• If there is an issue at trial as to the reasonableness of BDW’s actions in carrying out the remedial works as a matter of legal causation or mitigation then that would fall to be determined by reference to the facts as at the time of those actions. At that time BDW would reasonably have understood that they had a liability to the homeowners but that it was unenforceable if they chose to rely on a limitation defence. Section 135 would not change that (paragraph 121).

This leaves an interesting implication for repairs undertaken before the BSA 2022 came into force. It is hypothetically possible that a Court could find that such works were not reasonable as e.g. they were not reasonable mitigation, due to subjective understanding of lack of liability. However, there is likely to be a defence to such an argument, namely that in any event after Grenfell there was a general public interest in addressing fire safety defects, and that accordingly remedying such defects was reasonable.

The legal consequence in a nutshell as to the effect of the ruling is that developers can still bring claims in negligence, or other causes of action, in reliance upon potential liability they would have now, due to potential claims against them from homeowners, as a result of the 30-year retrospective limitation period.

The practical consequences are that contribution claims and negligence claims continue to be a lifeline for developers, when faced with potential DPA 1972 claims from homeowners. This may potentially lead to more litigation, or at least more complex litigation, as further parties are still permitted to be brought in to such litigation. Contractors/other professionals remain at risk of such claims.

Finally, there is also potentially wider impact on claims brought under other provisions under Part 5 of the BSA 2022, given the findings made by the Supreme Court as the purpose of this part.

• The Supreme Court stated that they were assisted by SoS’ submissions as to policy and purpose behind BSA. Many of these are referenced in the judgment itself – such as at paragraph 83:
  • “Retrospectivity is central to achieving the aims and objectives of the BSA.”
• The Supreme Court itself made the following comments:
  • At paragraph 102 “A further relevant matter of context is the importance of retrospectivity to Part 5 of the BSA. As outlined above, this is reflected not only in section 135 but in all the main changes to the law made by Part 5.”
  • At paragraph 104 “A central purpose and policy of the BSA in general… was to hold those responsible for building safety defects accountable. As was stated by SoS: “The BSA makes a number of important changes to the law including, at Part 5, several mechanisms that achieve the central aims of the BSA in relation to historical building safety defects. These mechanisms are designed to ensure that … those responsible for defects can be held to account...””
• The Supreme Court opted to take a ‘wider’ approach rather than the possible ‘narrow’ approach in interpretation, which it found to be consistent with the purposes of the BSA 2022.

Looking forwards, we may see practitioners relying upon these findings, to support wider interpretations in respect of certain parts of the test for e.g. Remediation Contribution Orders or Building Liability Orders.

Further, the references it made to retrospective effect, being “central to achieving the aims and objectives of the BSA”, may be relevant to ECHR type arguments about retrospectivity.

Ground 3: the scope of the duty of care under section 1(1) of the DPA 1972

Ground 3 of URS’ appeal raised the following issues: Did URS owe a duty to BDW under section 1(1)(a) of the DPA 1972 and, if so, are BDW’s alleged losses of a type which are recoverable for breach of that duty?

These questions were (and are) crucial for developers liable to remediate buildings unfit for habitation as to whether they are owed duties under section 1(1)(a) of the DPA 1972, and whether they can recover damages for a breach of that duty.

In the Court of Appeal, Coulson LJ decided (at paragraphs 173 – 193) that BDW had an arguable claim against URS under the DPA 1972. This was because BDW as the developer was owed a duty by URS under section 1(1)(a) of the DPA 1972 and that the damages sought by BDW were in principle recoverable under section 1(1) of the DPA 1972. The Court of Appeal upheld BDW’s case primarily on the basis of the “straightforward grammatical meaning of the words used” (paragraph 128).

Turning to the words used by the DPA 1972, under section 1(1)(a) of the DPA 1972 a duty is owed to those who “order” the provision of a dwelling; a duty is also owed, under section 1(1)(b) of the DPA 1972 to every person who acquires an interest in the dwelling. Section 1(4) of the DPA 1972 imposes a statutory duty on those who, in the course of a business provide or arrange for the provision of dwellings or arrange for others to take on work in connection with the provision of a dwelling, so that this duty was imposed on BDW, the developer of the relevant buildings.

URS submitted that on a proper interpretation of section 1(1)(a) it does not confer the benefit of a duty under section 1(1) on a person who owes a duty under section 1(4) of the DPA 1972. It was argued on URS’ behalf that the context of the DPA 1972 distinguishes between those who owe DPA 1972 duties and those to whom they are owed, so that a person cannot simultaneously owe and be owed a duty – and that s.1(1)(a) does not confer the benefit of section 1(1) on a developer – a person owing a duty under s.1(4) (see paragraph 142). URS submitted that it would be anomalous and illogical for the DPA 1972 to be interpreted so as to allow the duty to be owed by and to the same person (see paragraph 152).

URS argued that the purpose of the DPA 1972 was to address unfairness suffered by purchasers of new dwellings, not to protect developers who do not inhabit dwellings. URS submitted that the DPA 1972 had rightly been characterised by the House of Lords as legislation In the field of ‘consumer protection’ see D & F Estates Ltd v Church Comrs for England [1989] AC 177, 208A (Lord Bridge); and Murphy v Brentwood District Council [1991] 1 AC 398, 472F (Lord Keith) and 498E (Lord Jauncey). Developers would be owed contractual duties and duties in tort by those they engage, suffer no inequality of bargaining power and are well able to look after their own interests. There is no warrant in the background to the DPA 1972 or in its terms for treating developers as being in a privileged position with regard to all other contractors or to interfere with freedom of contract and party autonomy by prohibiting any exclusion or restriction of a duty owed to developers by other commercial parties (see paragraphs 136 and 198of the Supreme Court judgment).

URS also argued that section 6(3) of the DPA 1972 makes it impossible to contract out of the Act and that since it was hard to see a reason which justified preventing building contractors and construction professionals who work for a commercial developer from freely negotiating their contracts, the correct statutory interpretation would be that developers are excluded from the persons to whom the duty is owed.

The Supreme Court rejected those submissions.

Their Lordships held that there is no good reason why a developer cannot both owe and be owed a duty (paragraph 143). The duty is owed under section 1(1)(a) to those who “order” a dwelling. This would not be a purchaser of the dwelling or those who acquire an interest in the dwelling as this scenario is covered by section 1(1)(b) (see paragraph 140). The Supreme Court explained that the most obvious example of a person owed a duty under section 1(1)(a)  but would be the owner of the dwelling from the outset – i.e. it’s first owner, so “to the order of any person” includes the first owners who order work in respect of a dwelling and this embraces developers who order relevant work and are first owners. The Supreme Court also stated (paragraph 141) that the words “to the order of any person” are “wide enough to cover where that person does not have a proprietary interest in the land and new dwelling.”

The judgment of Lords Hamblen and Burrows explains (paragraph 154) that there is no inconsistency or logical fallacy in saying that a developer can both owe a DPA 1972 duty (e.g. to a subsequent purchaser) and be owed that duty (by the builder/architect/ engineer). Further there may be other situations where those who owe a duty are also owed a duty[1] and therefore developers are not uniquely privileged (paragraph 157).

Lord Leggatt agreed with the conclusions of Lords Hamblen and Burrows and gave reasons for this which included the following.

In relation to the points made about freedom of contract and consumer protection, his view was that the persons to whom the duty imposed by section 1(1) is owed are not limited to any particular category of purchaser or owner considered to be particularly vulnerable (paragraph 202). Further, at paragraph 204, “If the result is to extend the scope of the statutory protection beyond those who most need it, that cannot be regarded as irrational.” Lord Leggatt also considered it wrong to assume that the duty imposed by section 1 of the DPA 1972 is aimed only at consumer protection: the broader aim is improving the quality of construction of new housing (paragraph 205).

The Court concluded therefore that as the relevant work was carried out by URS “to the order” of BDW, URS owed BDW a duty under s.1(1)(a) of the DPA 1972.

URS argued that BDW’s alleged losses were not of a type which were recoverable for breach of that duty and that the type of damage contemplated was that arising as a result of the ownership of a dwelling which was unfit for habitation.

This argument was rejected. The Supreme Court held that there is no question of the costs of repairing defects being of a type that are irrecoverable for breach of that duty: “once it is accepted that the wording of section 1(1)(a) contemplates claims by developers against contractors, it follows that the premise of URS’s argument cannot be right: the DPA 1972 does contemplate losses of the kind incurred by BDW, namely losses incurred by a developer in remedying defects caused by its contractor’s breach of duty.” (Paragraph 161).

This judgment will be critical for developers as it confirms that developers do have a direct cause of action under the DPA 1972 against those down the contractual chain (who have carried out work to their order) for defects which render a dwelling unfit for habitation.

Ground 4: contribution claims

BDW had carried out remedial works to the developments, even though no claims had been intimated against it by the occupiers or building owners. BDW claimed a contribution from URS in respect of the costs of remediation.

When a person who has suffered damage (‘C’) can potentially bring a claim against one of a number of defendants (‘D1’, ‘D2’) C can claim against and can recover compensation for its loss from any one or any number of them. This could create unfairness if there was no mechanism to allow the party that C is claiming against to recover a contribution from the other potential defendants. The Civil Liability (Contribution) Act 1978 creates a statutory right to recover such a contribution, allowing the loss to be redistributed among those liable according to the extent of their relative responsibility for the damage in question.

BDW sought to claim a contribution from URS on the basis that BDW and URS were each liable to the homeowners in respect of the defects that had been remedied by BDW. URS denied that it was liable to make a contribution.

BDW submitted that the right to recover a contribution arises as soon as damage is suffered by C for which D1 and D2 are each liable, even if C has not claimed, let alone recovered, compensation from D1 or D2 in respect of the damage. On BDW’s case, the right to recover contribution arose when damage was suffered by the homeowners, which on BDW’s case, occurred at the time of completion of the Developments.

URS adopted a very different position. They argued that the right to recover contribution does not arise unless and until the existence and amount of D1’s liability to C in respect of the damage has been ascertained by a judgment against D1, an admission of liability by D1 or a settlement between C and D1. Consequently, no right to recover a contribution had arisen, and most likely, would probably never arise, since BDW has undertaken the remedial works without waiting for any claim to be made against it by any homeowner.

Lord Leggatt gave the judgment in respect of Ground 4. The other members of the Supreme Court agreed with his reasons. Lord Leggatt concluded that the right for D1 to recover a contribution from D2 arises when two conditions are satisfied.

1. damage has been suffered by C for which D1 and D2 are each liable; and
2. D1 has paid, or been ordered to pay, or agreed to pay compensation in respect of the damage to C.

At that point, but not before, D1 was entitled to recover contribution from D2 and the two-year limitation period within which any claim for contribution must be brought begins. Lord Leggatt rejected the argument by URS that it was necessary that the amount that D1 was liable to pay had to be established in a judgment, admission or settlement agreement.

Lord Leggatt rejected BDW’s argument that all of the necessary elements for a claim are set out in section 1(1) of the Civil Liability (Contribution) Act 1978, which requires, firstly, C to have suffered damage; secondly, another person (D1) to be liable in respect of that damage; and thirdly, D2 to be liable in respect of the same damage. There are additional elements. In particular, a contribution is for an amount of money, and the amount recoverable is a proportion of a sum. It is therefore not possible for a court to make an order for contribution in favour of D1 against D2 unless and until an amount of money can be identified of which D2 may be ordered to pay a proportion. The sum that D1 paid out should not be restrictively interpreted: it includes a payment in kind where the payment in kind is capable of valuation in monetary terms. The value of BDW’s works could, however, be quantified as a sum of money.

This conclusion echoed section 10(4) of the Limitation Act 1980. Where C1 is liable in respect of a settlement (and not a judgment or award, as per section 10(3)), then the 2-year limitation period accrues on the “earliest date on which the amount to be paid by him is agreed between him (or his representative) and the person (or each of the persons, as the case may be) to whom the payment is to be made.” Lord Leggatt interpreted this to mean that in any case where D1 makes or agrees to make any payment to C in compensation for the damage, the relevant date is the date when the payment is made or, if earlier, the date on which the amount to be paid is agreed. In this way, time begins to run, as it does under section 10(3), as soon as there is an identifiable amount of money in respect of which D2 may be ordered to make contribution.

Whether or not URS was liable to make a contribution to BDW hinged on the outcome of Ground 2, namely, the effect of section 135 of the BSA 2022. For example, D1 could have ceased to be liable as a result of the expiry of a limitation period. Did D1 cease to be liable to C when the works were performed?

In respect of works after 28 June 2022, when section 135 came into force, BDW was obviously liable to the homeowners prior to the works, and could recover a contribution. As section 135 was held to have always been in force, this also applied to a claim under section 1 of the DPA 1972 1972 prior to this date.

BDW’s claim against URS for a contribution would therefore succeed on the assumed facts.

What the Supreme Court said about Pirelli

In the end, the Supreme Court did not find it necessary to deal with Pirelli. It did, however, make some observations about the case. The Supreme Court made three points.

1. First, Pirelli was decided on a false premise, namely that cracks in a building constitute physical damage rather than pure economic loss. That was clear from the overruling of Anns v Merton London Borough Council [1978] AC 728 by Murphy v Brentwood.
2. Second, just because the reasoning in Pirelli was wrong, that did not mean that the outcome, namely that the cause of action in negligence accrued when the relevant damage occurred, rather than when it was discovered or could reasonably have been discovered was wrong.
3. Third, the Supreme Court expressed some sympathy for the argument accepted in other common law jurisdictions that the cause of action accrues when the damage was discovered or could reasonably have been discovered.

But, in this context, the Supreme Court considered that the position in England and Wales would have to take account of the fact that Parliament had passed the Latent Damage Act 1986, which set a period of 3 years from discoverability and a long-stop of 15 years.  Accepting the date of discoverability as the date of accrual of the cause of action would mean that a claimant would have six years, not 3 years from discoverability.

Conclusion

The Supreme Court decision in URS v BDW provides important clarification about DPA 1972 claims as well as contribution claims under the Civil Liability (Contribution) Act 1978. It also contains a number of observations about the BSA 2022 that will steer our interpretation of its provisions. For example, the Supreme Court confirmed that “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.” (paragraph 104). The Supreme Court has therefore signaled that nice legal points will not be allowed to foil the policy of the BSA 2022.