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URS Corporation Ltd v BDW Trading Ltd
Factual and Procedural Background
Following serious fire-safety concerns that emerged after the Grenfell Tower disaster, Parliament enacted the Building Safety Act 2022 (“BSA”). One provision, section 135, substantially extended the limitation periods applicable to claims under section 1 of the Defective Premises Act 1972 (“DPA”).
Company A (the developer of two high-rise residential projects completed between 2005 and 2012) discovered structural defects in 2019, allegedly caused by negligent designs supplied by Company B (consultant engineers). Company A remedied the defects from 2020 onward and, in March 2020, sued Company B in the High Court for the cost of those works.
The High Court ordered a preliminary trial on negligence issues and ruled largely in Company A’s favour. After section 135 BSA came into force (28 June 2022), Company A amended its pleadings to add (i) direct claims under the DPA and (ii) a claim for contribution under the Civil Liability (Contribution) Act 1978. The High Court permitted the amendments; the Court of Appeal affirmed. Company B appealed to the Supreme Court, where Judge Leggatt delivered a concurring opinion that is the subject of this summary.
Legal Issues Presented
- Whether, apart from BSA section 135, Company A suffered a legally recoverable loss in negligence (Issue 1).
- Whether, and to what extent, BSA section 135 has retrospective effect on the parties’ negligence, DPA and contribution claims (Issue 2).
- Whether Company B owed Company A a duty under section 1 DPA and, if so, whether Company A’s claimed loss is of a recoverable type (Issue 3).
- Whether Company A can seek contribution from Company B under the 1978 Act despite the absence of any judgment, settlement or third-party claim against Company A (Issue 4).
Arguments of the Parties
Appellant's (Company B’s) Arguments
- Negligence: a general common-law principle bars recovery for costs “voluntarily” incurred where the claimant had no pre-existing legal liability to pay them.
- DPA: section 1(1)(a) should exclude commercial developers; developers cannot simultaneously owe and benefit from the same statutory duty, and the DPA is aimed only at consumer protection.
- Contribution: a right to contribution arises only when the claimant’s liability to the third party is finally ascertained by judgment, admission or settlement; none exists here.
- Retrospectivity: section 135 BSA only defeats a limitation defence in a DPA action; it has no wider legal consequences.
Respondent's (Company A’s) Arguments
- Negligence: the voluntariness principle is not an inflexible rule; the question is one of causation and mitigation.
- DPA: on the plain wording of section 1(1)(a), developers fall within “any person to whose order the dwelling is provided.”
- Contribution: the right arises once damage exists and both parties are liable for it; a prior judgment or settlement is unnecessary.
- Retrospectivity: section 135 BSA is to be treated as always having been in force for all legal purposes, including contribution and negligence contexts.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Koch Marine Inc v d’Amica Societa di Navigazione (The Elena d’Amico) [1980] 1 Lloyd’s Rep 75 | Mitigation framed as an aspect of causation | Illustrates that “mitigation” concerns causation rather than duty scope |
| Darbishire v Warran [1963] 1 WLR 1067 | Mitigation and causation linkage | Supports viewing mitigation as causative, not a separate duty |
| Bunge SA v Nidera BV [2015] UKSC 43 | Market-based mitigation expectations | Quoted to show voluntary choices break causation when claimant speculates on market movement |
| British Westinghouse Electric v Underground Electric Railways [1912] AC 673 | Reasonableness standard for mitigation | Forms the classic test of the “reasonable and prudent” response |
| Downs v Chappell [1997] 1 WLR 426 | Voluntary choices can sever causation | Example of choosing not to sell a business after fraud discovery |
| Rushton v Turner Brothers Asbestos Co [1960] 1 WLR 96 | Intervening act breaking causation | Shows claimant’s own folly may become sole cause |
| Anglian Water Services v Crawshaw Robbins & Co [2001] BLR 173 | Voluntary remedial expenditure often unrecoverable on remoteness grounds | Cited to refute existence of an inflexible “voluntary payment” bar |
| Admiralty Comrs v SS Amerika [1917] AC 38 | Compassionate payments deemed voluntary | Used by Appellant; distinguished by Court |
| Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452 | Reputational reasons may justify mitigation costs | Supports recoverability despite no legal obligation to pay |
| James Finlay & Co Ltd v Kwik Hoo Tong [1929] 1 KB 400 | Commercial reputation relevant to mitigation | Court analogised developer’s reputational concerns |
| Payzu Ltd v Saunders [1919] 2 KB 581 | Reasonableness in mitigation is fact-specific | Reinforces trial judge’s fact-sensitive role |
| Sayers v Harlow UDC [1958] 1 WLR 623 | Emergency decision-making in mitigation | Example that non-monetary factors inform reasonableness |
| Lagden v O’Connor [2003] UKHL 64 | Impecuniosity may affect mitigation standard | Referenced to show wider considerations beyond legal liability |
| D & F Estates v Church Comrs [1989] AC 177 | DPA identified as consumer protection legislation | Appellant relied on to exclude developers; Court distinguished |
| Murphy v Brentwood DC [1991] 1 AC 398 | Consumer-protection character of DPA | Same context as above |
| Kazakhstan Kagazy plc v Zhunus [2016] EWHC 1048; [2016] 4 WLR 86 | Three-stage analysis of cause-of-action accrual | Framework adopted in contribution discussion |
| Aer Lingus plc v Gildacroft Ltd [2006] EWCA Civ 4 | Limitation on contribution claims; judgment must quantify damages | Court applied to interpret Limitation Act section 10 |
| Lauri v Renad [1892] 3 Ch 402 | Presumption against retrospective legislation | Guides reading of BSA section 135 |
| Arnold v Central Electricity Generating Board [1988] AC 228 | Retrospectivity must be minimal and necessary | Cited in limitation analysis |
| Reid v Reid (1886) 31 Ch D 402 | Limit retrospective reach even in partly retroactive statutes | Supports narrow reading of section 135 effects |
| Yew Bon Tew v Kenderaan Bas Mara [1983] 1 AC 553 | Limitation expiry gives defendants peace of mind | Explains unfairness of reviving expired claims |
| Hordern-Richmond Ltd v Duncan [1947] KB 545 | Contribution cause of action timing under 1935 Act | Historical backdrop to 1978 Act interpretation |
| Merlihan v AC Pope Ltd [1946] KB 166 | Accrual of contribution at date of accident (rejected later) | Shown as initial but abandoned approach |
| Morgan v Ashmore [1953] 1 WLR 418 | Judgment-based accrual of contribution | Part of historical debate |
| Littlewood v George Wimpey & Co Ltd [1953] 2 QB 501 | Further support for judgment-based accrual | Analysed to show inconsistency under 1935 Act |
| George Wimpey & Co Ltd v BOAC [1955] AC 169 | House of Lords view on “liable” meaning “held liable” | Contrasted with modern statutory wording |
| Harvey v RG O’Dell Ltd [1958] 2 QB 78 | Assumed accrual upon judgment | Part of historical overview |
| Bitumen & Oil Refineries v Comr for Government Transport (1955) 92 CLR 200 | Critique of 1935 Act’s drafting | Cited to illustrate need for reform |
| Stott v West Yorkshire Road Car Co Ltd [1971] 2 QB 651 | Contribution claim after settlement without admission | Highlighted limitations of earlier legislation |
| Co-operative Retail Services Ltd v Taylor Young Partnership Ltd [2002] UKHL 17 | Liability timing under 1978 Act section 1 | Adopted to show current statutory scheme |
| Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48 | Effect of bona fide settlements on contribution | Explains proviso in section 1(4) Contribution Act |
Court's Reasoning and Analysis
Issue 1 – Negligence. The Court rejected a hard-edged rule barring recovery of “voluntary” payments. Whether Company A’s expenditure was voluntary is a causation question resolved by assessing what a reasonable developer would have done in the circumstances. The absence of an enforceable legal obligation to leaseholders is relevant but not decisive; reputational and commercial imperatives may justify the expenditure.
Issue 3 – DPA Duty. On a literal reading of section 1(1)(a) DPA, Company B owed the statutory duty to Company A because the dwellings were provided “to the order” of Company A. Excluding developers would require impermissible re-drafting. Consumer-protection motives do not mandate such exclusion, and conceptual concerns about “owing a duty to oneself” are addressed by contributory-negligence principles.
Issue 4 – Contribution. Interpreting the 1978 Act and Limitation Act 1980 in tandem, the right to contribution arises when: (i) common damage exists for which both parties are liable, and (ii) the claimant has paid (or been ordered/agreed to pay) compensation. No judgment, admission or settlement with the third party is mandatory. Company A’s remedial works constitute a payment in kind; therefore the statutory conditions are met.
Issue 2 – Retrospective Effect of BSA section 135. Section 135 expressly revives time-barred DPA claims by substituting a 30-year period and is retroactive to that extent. The Court, however, confined that retrospectivity to matters of pure law (i.e., whether an action is time-barred). It does not rewrite historical facts or automatically render pre-BSA expenditure non-voluntary for negligence purposes. Hence: (a) contribution claims may rely on the revived DPA liability both before and after 28 June 2022; (b) negligence and DPA damages for pre-2022 works still depend on the fact-sensitive causation/mitigation inquiry.
Holding and Implications
FINAL DISPOSITION: APPEAL DISMISSED.
Company A may pursue all three causes of action. The Court confirms that:
- Voluntariness is a factual issue, not an automatic bar to negligence recovery.
- Developers fall within the protective scope of section 1 DPA.
- A contribution right arises on payment (including payment in kind) without needing a prior judgment or settlement.
- BSA section 135 retrospectively revives time-barred DPA liabilities for limitation purposes but does not rewrite other historical facts.
Practically, the judgment broadens potential liability for construction professionals and clarifies contribution litigation, yet it refrains from extending retrospective legislation beyond what Parliament expressly required.
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