Supreme Court hands down landmark ruling on building remediation costs

This article originally featured in Insurance Day, June 2025. 

Back in the spring, the UK’s Supreme Court handed down its much-anticipated judgment in URS Corporation Ltd v BDW Trading Ltd (2025).

The Supreme Court’s decision reinforced the policy objectives of the Building Safety Act 2022 and the Defective Premises Act 1972 being to encourage developers to carry out any necessary remedial works for safety defects discovered and to ultimately ensure safety failures are properly and promptly addressed by those responsible.

In late 2019, during its post-Grenfell fire investigations, the developer, BDW Trading, discovered significant design structural defects in two of its high-rise residential developments. While there was no claim against BDW, and the company had sold the developments on, BDW undertook remedial works at the developments voluntarily.

BDW had previously engaged URS Corporation to provide structural designs for the developments and given the nature of the defects discovered, BDW sought to claim the costs it had incurred in undertaking remedial works from URS in negligence.

Following the entry into force of the Building Safety Act, BDW brought its claim against URS under s1 of the Defective Premises Act and for a contribution under the Civil Liability (Contribution) Act 1978. 

This case first came before the Technology and Construction Court which found for BDW. URS appealed and the Court of Appeal upheld the lower court’s findings, dismissing all appeal grounds.

URS ultimately brought the case before the Supreme Court on four grounds and the case was heard in early December 2024.

Voluntariness principle

The first ground was consideration of whether the damage suffered by BDW was too remote because it was voluntarily incurred. The Supreme Court decided there was no “voluntariness principle” that precluded recovery of costs incurred without legal obligation, but, in any event, the extent to which remediation costs had been voluntarily assumed was a fact-specific issue that went to causation and mitigation.

The Supreme Court considered BDW had no alternative but to remedy the defects owing to the risk of personal injury/death, potential legal liability under the Defective Premises Act and reputational damage if no action was taken, which was relevant to the recoverability of those costs.

Retrospective provisions

The second ground was whether s135 of the Building Safety Act (which incorporates a retrospective 30-year limitation period) applied and if so, its effect.

The Supreme Court considered the purpose of the act and noted the retrospective effect of the “backward-looking provisions” (including s135 which provides for a 30-year limitation period for accrued claims under s1 of the Defective Premises Act), was “central to achieving the aims and objectives” of the Building Safety Act, being to hold those responsible for safety failures to account. Section 135(3) provides the amendment to the limitation period “is to be treated as always having been in force” subject to limited exceptions.

The Supreme Court held the retrospective provisions in s135 of the Building Safety Act do apply to claims for negligence and contribution, which are reliant on the Defective Premises Act, such as those made by BDW against URS, as well as claims that are actually brought under the Defective Premises Act. 

Therefore, for works carried out after June 28, 2022, it was most likely carrying out remedial work that discharged a potential Defective Premises Act liability to homeowners was a step BDW could reasonably have been expected to take in mitigation. However, for work done before that date, whether the repairs were reasonable (where, for example, there may have been no extant claim against the claimant) is a more nuanced assessment, requiring a more detailed factual analysis.

Developers

Ground three concerned whether s1(1)(a) of the Defective Premises Act applies to developers. The act confers the benefit of the duty on any person “taking on work for or in connection with the provision of a dwelling” to any person to whose order the dwelling is provided, and every person who acquires an interest in the dwelling under the act. 

The Supreme Court explained there is no good reason why a developer cannot be “both a provider and a person to whom the duty is owed” and therefore held that URS owed a duty to BDW under s1(1)(a) of the Defective Premises Act. 

Civil Liability (Contribution) Act

Finally, the Supreme Court considered whether BDW could bring a claim against URS under s1 of the Civil Liability (Contribution) Act, despite there having been no claim or judgment against BDW.

The Supreme Court noted the right to recover contribution arises when damage has occurred for which both parties are liable and one of those parties has paid or been ordered to pay compensation. 

The Supreme Court held payment in kind by BDW carrying out remediation works in compensation for damage was sufficient for them to bring a claim pursuant to s1 of the Civil Liability (Contribution) Act.

The Supreme Court’s decision has clarified that developers can claim reasonable losses in negligence for “voluntary repairs” if undertaken to avoid safety risks and can then make downstream or contribution claims to recover these costs from negligent professionals and builders.

While the decision will be welcomed by developers, and encourage developers to proactively undertake repairs, there is now potentially greater liability for those parties further down the contractual chain (and their insurers) as developers may seek to pursue their contractors and consultants more aggressively.

Public liability insurers will likely therefore need to turn their attention to whether such claims (ie, negligence for “voluntary repairs”) will be covered as legal liabilities, or potentially under Defective Premises Act extensions in public liability policies.