The Supreme Court addresses recoverability of ‘voluntarily’ incurred loss in negligence and contribution claims: BDW Trading Ltd v URS Corporation Ltd [2025] UKSC 21; [2025] 2 WLR 1095

The Supreme Court’s ruling in BDW is far from a narrow “construction case.” Significant parts of the judgment are relevant to any context in which remedial works or preventative action are undertaken for third-party personal injuries or property claims. For personal injury practitioners, the judgment offers a powerful precedent for recoverability of costs incurred pre-emptively, and for contribution claims, before any judgment or settlement against a joint tortfeasor has been obtained.

Facts

BDW, a major property developer, engaged URS to provide consultant engineering services on two high-rise residential buildings. Completed between 2005 and 2012, the developments were sold on; by late 2019, following safety reviews prompted by post-Grenfell Tower fire scrutiny, BDW discovered alleged design defects. BDW — though it no longer had any propriety interest — carried out remedial works in 2020-21 at its own cost. Despite no third-party occupier or resident claim (and any such claim being time-barred), BDW sued URS in negligence and claimed contribution pursuant to the Civil Liability (Contribution) Act 1978 ([2]-[15]). A number of legal questions were determined as preliminary issues and found their way to the Supreme Court ([16]). Two of these issues were of wider relevance outside the construction context. 

No blanket “voluntariness” bar to recoverability

URS accepted (on the assumed facts) that it had a duty of care to BDW in contract and tort and that this had been breached.  URS had instead argued that BDW’s losses were irrecoverable as outside its scope of duty and/or too remote because the remedial works were undertaken “voluntarily” and cited four authorities, including SS Amerika [1917] AC 38 and Esso Petroleum [1989] AC 643, to suggest that there was ‘voluntariness principle’ which meant that voluntarily incurred losses are irrecoverable.

The Supreme Court unanimously rejected that argument holding there is no general principle in English law that losses incurred ‘voluntarily’ are automatically irrecoverable in negligence. Instead, recoverability is a question of causation and mitigation to be determined on the facts at trial and on a case-by-case basis ([55]).

In obiter comments the Court observed there were three features indicating that BDW might not have been acting “voluntarily” in any full sense: had BDW done nothing, there was a risk that defects would cause personal injury or death to the homeowners, producing claims against BDW: BDW had a legal liability to the homeowners under the Defective Premises Act 1972 (‘DPA’) or in contract – though limitation barred the remedy, it did not extinguish the right; there was potentially reputational damage to BDW if it failed to act despite known dangers ([62]-[66]).

Implications for PI / latent-defect work: where a defendant (or developer) undertakes remediation pre-emptively — to avoid foreseeable personal injury or property damage — those costs may be recoverable even if voluntarily incurred.  The rejection of an automatic ‘voluntariness principle is consistent with the rise of claims for donations and/or voluntary payments for hospice in cases such as in Drake v Foster Wheeler Ltd [2010] EWHC 2004 (QB); [2010] P.I.Q.R. P19. The judgment also provides useful acknowledgement of reputational and moral drivers as relevant factors in causation.

Contribution claims even without prior settlement or judgment

Under the Civil Liability (Contribution) Act 1978, a defendant who pays compensation to a claimant may seek contribution from other parties who were also liable to the claimant for the same damage. URS’s final ground of appeal contended that BDW could not claim contribution as the right to claim did not arise unless and until the existent and amount of BDW’s liability to third parties had been established by a judgment, admission of liability or settlement.  URS relied on the legislative history prior to the enactment of the 1978 Act to demonstrate there was no right to contribution in such circumstances and sought to persuade the Supreme Court that was unchanged by the enactment of the 1978 Act. In response, BDW argued in reliance on the language of the Act that the right to contribution arises as soon as the relevant third part suffers damage for which the tortfeasors are each liable, even without a claim for compensation being raised.

The Court held that neither party was entirely right:  the correct interpretation is that the right to contribution arises when (i) damage has been suffered by the third party for which the tortfeasors are each liable when the payment is made and (ii) the party claiming contribution has either paid, been ordered or agreed to pay compensation for the damage to the third party. Importantly, a formal settlement or judicial determination is not a prerequisite ([212]). BDW’s case fulfilled both conditions and URS’s appeal was therefore rejected ([266]).

That is a major precedent for real-world situations — especially where formal claims may be impractical or undesirable, but remediation nevertheless proves necessary to avoid greater harm (whether that be injury or reputational or moral harm).  The approach of the Court is highly pragmatic given it supports and encourages early and proactive risk management, enabling preventative action to take place without risk of automatic bar to a contribution claim.

At a glance:

• Pre-emptive remediation can be recoverable — If a client spends money to repair defects before any third-party claim, those costs may still be recoverable in negligence or under the DPA. In a PI context, this could be remedial measures or securing buildings to avoid injury.
• No need to wait for third-party suit — Because remedial works count as “compensation in kind,” a subsequent contribution claim may be brought even without a prior claim or judgment. This offers tactical flexibility in managing multi-party liability.
• Causation/mitigation issues remain fact-sensitive — The Court declined to impose a bright-line voluntariness bar; but whether remedial works are “reasonable” or “compelled” remains intensely fact-specific. Careful evidence-gathering will be essential — especially to show a real risk to health, safety, liability or reputation justifying prophylactic expenditure.