URS Corporation Ltd v BDW Trading Ltd

URS Corporation Ltd v BDW Trading Ltd is a major Supreme Court decision about historic residential building defects and who may ultimately bear the cost of fixing them. It sits in the post-Grenfell building safety context and deals with negligence, the Defective Premises Act 1972, the Civil Liability (Contribution) Act 1978 and the retrospective effect of section 135 of the Building Safety Act 2022.

For businesses, the key point is that the court did not accept a simple rule that a developer's remediation costs are automatically irrecoverable just because the developer chose to fix defects before being sued. At the same time, the court stressed that recoverability still depends on fact-sensitive issues, especially for work done before 28 June 2022.

The case is especially relevant if your business develops, designs or helps build dwellings. It shows how old projects can return as live legal and commercial problems years after completion, sale and transfer of common parts.

BDW was the developer of two high-rise residential developments, Capital East and Freemens Meadow. URS was appointed by BDW to provide structural design services for those projects. Following the Grenfell Tower disaster, developers across the sector investigated older buildings for safety issues. During those investigations, BDW discovered design defects in late 2019.

On the assumed facts used for the appeal, URS had failed to exercise reasonable skill and care in its design services, and some of the defects created health and safety risks. By then, BDW no longer owned the developments. Flats had been sold on long leases, and interests in the structure and common parts had passed to third-party management companies.

Even though no owner or occupier had yet made or intimated a claim, BDW carried out repairs in 2020 and 2021. BDW said the defects posed a danger to occupants and risked serious damage to its reputation if left unresolved. It then sued URS in negligence to recover the remediation costs and associated losses.

The case became more significant when section 135 of the Building Safety Act 2022 came into force on 28 June 2022. That provision retrospectively extended the limitation period for accrued section 1 Defective Premises Act claims from six years to 30 years for older dwellings. BDW then amended its case to add a direct DPA claim and a contribution claim.

The Supreme Court dealt with four linked issues. First, could BDW recover remediation costs from URS in negligence even though BDW had already sold its interests and no homeowner had sued? URS argued that the costs were voluntarily incurred and therefore outside the scope of duty, too remote or otherwise irrecoverable.

Second, what was the retrospective effect of section 135 of the Building Safety Act 2022? Third, did URS owe BDW a duty under section 1(1)(a) of the Defective Premises Act 1972 as the person to whose order the dwellings were provided? Fourth, could BDW seek contribution from URS even though there had been no homeowner judgment, settlement or asserted claim?

These were not just technical pleading points. They went to a practical commercial question seen across the sector after Grenfell: if serious defects are found and a developer fixes them before residents sue, can the developer still recover from those said to be responsible?

The Supreme Court dismissed URS's appeal. On the negligence issue, the court rejected the idea of a bright-line legal rule that remediation costs are irrecoverable simply because they were incurred voluntarily or when there was no enforceable legal obligation to carry out the work. The court accepted that voluntariness can matter, but usually through causation and mitigation rather than as an automatic legal bar.

That distinction matters. The court said the key question is often whether the claimant's decision to carry out remedial work should be treated as a consequence of the defendant's breach or as a choice freely made by the claimant. That is a fact-sensitive evaluative question. For pre-28 June 2022 work, the court said BDW would need to justify its conduct by reference to the circumstances as they actually were at the time.

On the Defective Premises Act point, the court held that a developer such as BDW could fall within the wording of the person to whose order the dwelling was provided. So a developer was not excluded from being owed the statutory duty under section 1(1)(a).

On contribution, the court held that BDW could pursue a contribution claim against URS even though no homeowner had sued, obtained judgment or reached a settlement with BDW. The right to seek contribution did not depend on waiting for that kind of formal third-party claim process.

On section 135 of the Building Safety Act 2022, the court confirmed that the retrospective extension of limitation applied to DPA claims and to contribution claims in this context. But it did not retrospectively rewrite the factual position for causation, mitigation and remoteness questions relating to remedial work done before 28 June 2022.

This decision is strongest for residential developers, engineers, architects and contractors dealing with historic dwelling defects. It shows that old projects can still create live exposure even after completion, sale and transfer of common parts. If defects later emerge, the commercial pressure to investigate and remediate can be intense, especially where occupant safety is involved.

The judgment also separates two questions that businesses often blur together. One question is whether a claim exists in principle. Another is whether the claimant can prove that the costs were caused by the defendant's breach and were a reasonable response. A business may have a route to recover losses, but success can still depend heavily on records and evidence.

For developers, the case supports a disciplined response to defect discovery. If you decide to remediate, record the safety concerns, the options considered, the timing, the advice received and the reasons for acting. For consultants and contractors, the case underlines the value of clear appointments, quality assurance, design records and insurance review.

The judgment also means older residential projects should not be written off as legally irrelevant just because the original six-year DPA limitation period appeared to have expired. Section 135 of the Building Safety Act changed that landscape in a material way.

The court's reasoning makes evidence central. If your business is involved in a historic defect issue, the quality of your records may shape whether you can defend a claim, pursue recovery or support a contribution case. This is particularly important where remedial work was carried out before 28 June 2022, because the court said causation and mitigation remain tied to the circumstances as they actually existed at the time.

That means businesses should be able to show not just that defects existed, but why action was taken, what alternatives were considered and how the decision was reached in the ordinary course of business. Informal decision-making may be commercially understandable, but it can weaken later recovery arguments.

The judgment also shows why ownership history matters. BDW had sold its remaining proprietary interests, flats had been sold on long leases, and common parts had passed to management companies. Those facts did not end the dispute, but they were central to how the legal arguments were framed.

For a time-poor business owner, the best use of this case is operational. It points to the steps worth taking before positions harden. The aim is to preserve options while dealing with safety risk responsibly.

Where a defect may affect safety, speed matters. But so does evidence. If you remediate first and ask questions later, you may weaken your recovery case. If you delay too long, you may increase safety, regulatory and commercial risk. A structured response is usually the safest commercial approach.

The court's reasoning also shows that legal routes can overlap. A business may need to consider negligence, DPA and contribution positions at the same time. Waiting to think about recovery until after works are complete can make the later case harder to prove.

One of the most important commercial points in the judgment is that older residential schemes may still carry live exposure. Before section 135 came into force, many businesses would have treated the original six-year DPA limitation period as the end of the road. The Supreme Court confirmed that the later statutory change can retrospectively affect DPA and contribution claims.

That does not mean every old project will produce a successful claim. It does mean businesses should be careful about writing off historic files, destroying records too early or assuming that a past limitation analysis still holds. If your business was involved in medium or high-rise dwellings completed years ago, a fresh review may be sensible where serious defects are later discovered.

The judgment is also a reminder that the commercial story matters. Courts will look at what the business knew, what risks were identified, what choices were available and why money was spent. A well-kept project file can be as important as the legal theory.

The dates below help explain why this case matters. The timing of the remedial works and the commencement of section 135 of the Building Safety Act 2022 were central to the court's analysis.

These are the points most businesses in the residential construction chain are likely to ask first when reading the decision.