Many articles have been written summarising the long-awaited Supreme Court judgment in URS Corp Ltd v. BDW Trading Ltd [2025] UKSC 21. The Supreme Court upheld the Court of Appeal decision, confirming that a developer can recover costs incurred in remedying defects from third parties, even where the developer no longer owns the building or where no third-party claim has been made against it in relation to the defects. What, though, are the key takeaways from this judgment for members of the construction industry linked to buildings suffering from defects related to fire safety?

The background – a reminder

For a more detailed look at the background to the case and the appeal grounds, please take a look at our article here. A high-level summary is set out below.

• A property developer (BDW) appointed structural engineers (URS) to carry out structural design works in relation to the construction of two high-rise residential developments which were completed by 2012. Design defects were found in those developments in 2019. In 2020, BDW carried out remedial works. BDW then took steps to recover sums associated with the remedial works from URS.
• BDW's claim against URS started off as a claim for recovery of remedial work costs in the tort of negligence. After the court decided as a preliminary issue that the losses were recoverable in principle, along with the coming into force of the Building Safety Act 2022 (BSA 2022) (which extended the limitation period from six to 30 years), BDW amended its claim to add claims under the Defective Premises Act 1972 (DPA 1972) and the Civil Liability (Contribution) Act 1978 (CLA 1978).
• The Court of Appeal dismissed URS's appeal of the preliminary issues decision and the court order allowing BDW to amend its claim. URS then appealed to the Supreme Court on four grounds, all of which were rejected:
  
  • Original developers who take on remedial works voluntarily will be able to recover damages from those responsible for the defects, provided it was reasonable to undertake the works.
  • Section 135 of the BSA 2022 extended the limitation period for bringing claims under the DPA 1972 to 30 years with retrospective effect (as well as prospectively for 15 years). This retrospective effect applies not only to claims brought under the DPA 1972 by homeowners against the developer, but also to contribution claims made by the developer against third parties (e.g. designers and contractors) in respect of the developer's liability to homeowners under the DPA 1972.
  • Duties arising under the DPA 1972 can be owed by a third party (in this action, the designer URS) to both the purchaser of a property and the developer who arranged for the property to be built. The costs of remediation are therefore the sort of loss envisaged by the DPA 1972.
  • The CLA 1978 allows a party to seek a contribution towards damages for which it is liable from another party who is liable for the same damages. The Supreme Court decided that BDW could recover a contribution to the remediation costs from URS under the CLA 1978 despite there having been no judgment against BDW or settlement between BDW and any third party, and no third party had even asserted a claim against BDW. Instead, it was enough that BDW had made a payment in kind by carrying out the remedial works in compensation for the damage suffered by the homeowners in the blocks.

What should we be thinking about now in light of this judgment?

• When remedial works are being considered, thought should be given as to whether it is reasonable to undertake the works. Factors to be considered include whether:
  • defects left untreated could have the potential to lead to death/personal injury and/or claims under the DPA 1972 or contract;
  • the developer was legally liable to the homeowners under the DPA 1972 (i.e. through failing to construct homes which were fit for habitation);
  • a failure to take steps now could lead to the defects worsening; and
  • potentially, the developer risked reputational damage if it failed to remediate.
• Invest time to explore which entities were involved in the design, inspection, surveying and construction of projects in order to identify where other third parties were involved that may bear partial or full responsibility for damages arising out of defects.
• There is no need to wait for a claim to be brought against the developer or for an existing claim to be settled before the developer is entitled to take steps to seek a contribution from third parties (such as contractors, designers or consultants) for the same damages.
• A visual defect is not required to render a building unfit for habitation within the meaning of the DPA 1972 – issues such as insufficient fire protection can also constitute valid claims.
• The government and courts are clearly supportive of developers taking responsibility for defects in buildings which raise safety concerns, as well as ensuring that those responsible for the defects are made to pay. Appraisals of historic projects should therefore be undertaken and surveys carried out where fire safety defects may be present.