On 21 May 2025, the Supreme Court gave judgment in URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21. The seven-strong panel unanimously dismissed URS’ four grounds of appeal.
In this article, Siân Mirchandani KC and Douglas James sum up the decision and how it addresses voluntary payments, the introduction of retrospective legislation, fair allocation of risk as the underlying policy for scope of duty, and when a cause of action for contribution arises. The decision repays reading by all PI lawyers, not just those steeped in construction professionals’ claims.
Background
BDW Trading Ltd (‘BDW’) is the residential developer behind such well-known names as ‘Barratt Homes’ and ‘David Wilson Homes’. BDW developed ‘Citiscape’, a development of high-rise residential apartments. After the Grenfell Tower tragedy, BDW carried out cladding remediation works at Citiscape. Whilst doing so BDW noticed cracking affecting the structural integrity of the foundation slab of one block. Further investigation indicated that the building was at risk of structural failure. The structural design had been done by URS Corporation Ltd (‘URS’).
The findings at Citiscape led BDW to undertake a wholesale review of its portfolio of tower block developments. This disclosed serious structural design concerns in two other developments. BDW undertook remedial works despite no longer owning the buildings and despite not being sued by the homeowners.
BDW’s claim
In March 2020 BDW claimed against URS in tort alleging URS’ designs were negligent, necessitated the remedial works and caused reputational loss. URS asserted that when BDW undertook remedial works, BDW had limitation defences to the homeowners’ / occupants’ (potential) claims, and so was not legally obliged to undertake the works; URS contended that BDW’s losses were therefore “voluntarily” incurred. URS also contended that the losses were outside URS’ scope of duty in tort, or too remote, or caused by BDW itself, or represented BDW’s failure to mitigate. URS applied for strike out. Fraser J heard a trial of preliminary issues on the scope of URS’ duty and the recoverability of BDW’s losses in tort. Fraser J held ([2021] EWHC 2796 (TCC)) that the losses except reputational damage were covered by URS’ duty and were recoverable, but legal causation and failure to mitigate were fact dependent matters for trial.
In June 2022 the Building Safety Act 2022 (‘BSA’) came into force. In December 2022 BDW applied to amend to rely on s.135 BSA. BDW claimed that the applicable limitation period under s.1 Defective Premises Act 1972, (‘DPA’) was not 6 but 30 years. BDW also applied to amend to claim under the Civil Liability (Contribution) Act 1978 (‘CA’). The amendments were opposed by URS on the grounds that (i) the DPA claim was barred under s.1(4), (ii) the homeowners had to have brought claims against BDW for a CA claim to be brought against URS, and (iii) s.135(6) BSA applied as there was a basis on which it could be said the claim had been finally determined before s.135 came into force. Adrian Williamson KC granted permission to amend ([2022] EWHC 2966, (TCC)).
In July 2023 the Court of Appeal ([2023] EWCA Civ 772, (King, Asplin and Coulson LJJ)) dismissed URS’ appeals against the orders of Fraser J and Adrian Williamson KC. URS appealed to the Supreme Court. Seven justices were empanelled due to the possibility of reconsidering the House of Lords’ decision in Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1 on the date of accrual of a cause of action in tort. (In the end, this thorny issue fell away.)
The grounds of appeal and the Supreme Court’s decision
Ground 1: Was BDW’s damage outside the scope of URS’ duty / too remote as voluntarily incurred?
URS asserted that voluntarily incurred losses – in this case losses incurred in the absence of legally enforceable obligations to the homeowners – were irrecoverable as a matter of law. The Supreme Court held: (i) that there was no “bright line rule of law” that meant voluntarily incurred losses were irrecoverable as a matter of law; (ii) that BDW did not have a full and free choice due to the risk of injury to occupants and reputational damage, and so its outlay was not strictly voluntary; and (iii) that the recoverability of BDW’s losses fell most naturally to be considered, not as a scope of duty issue, but as a question of causation or as a possible failure to mitigate. Those fact specific enquiries were for trial.
Ground 2: Did s.135 BSA apply, and if so with what effect?
URS asserted that the retrospective extension of the limitation period under s.1 DPA brought in by s.135 BSA had no relevance to a claim in tort or contribution under the CA. The Supreme Court held that the s.135 retrospective extension applies to claims (such as those in this case) which are “dependent on the limitation period in section 1 of the DPA but are not actions brought under that section”. Consequently, no relevant time bar applied at the time the remedial costs were incurred. (However, the Supreme Court added that the question of the reasonableness of BDW’s carrying out the works when the claims were time barred before BSA came into force, was unaffected by s.135.)
Ground 3: Did URS owe BDW a duty under s.1 DPA, and were BDW’s losses of a type recoverable for breach of that duty?
Developers owed duties under s.1 DPA. Were they themselves owed such a duty? The Supreme Court held that the s.1 duty is owed to any person, including a developer, to whose “order” a dwelling is built. The person who was owed the duty is usually the first owner of the dwelling. Here URS carried out relevant work “to the order” of BDW. URS therefore owed BDW the s. 1 duty.
Ground 4: Was BDW entitled to bring a claim under s.1 CA in the absence of a claim being asserted or any judgment / settlement with a third party?
When does a cause of action accrue under the CA? The Supreme Court held that it is “sufficient” that BDW had made a payment in kind, by performing remedial works, in compensation for the damage suffered by the homeowners. The absence of a settlement between BDW and a third-party claimant, or a judgment, or even a claim against BDW, was no bar to a contribution claim. The right of a defendant to recover contribution from another defendant arises when (i) damage has been suffered by the claimant for which both are each liable and (ii) the first defendant has paid or been ordered to pay or agreed to pay compensation in respect of the damage to the claimant.
Some themes for professional negligence lawyers
URS is a landmark decision in the field of building safety. But it may prove to be a landmark case for PI law generally, in particular because of its first-principles analysis of remoteness and contribution.
Scope of duty, remoteness and the claimed ‘voluntariness principle’
URS’ argument was that the voluntariness principle applies “through the concepts of scope of duty or remoteness” to rule out recovery for the cost of repair incurred by BDW. The Supreme Court analysed four cases (that URS relied on) to explain how the voluntariness of payments in those cases engaged more ‘typical’ remoteness principles – such as the characterisation of the loss (physical or purely economic), assumption of responsibility, and whether voluntary losses would “normally” be in the parties’ contemplation. The Supreme Court concluded that ‘voluntariness’ “most naturally falls to be considered within the concepts of legal causation or mitigation rather than scope of duty and remoteness”. The Supreme Court’s analysis of this proposition did not focus on professional liability matters – but rather on commercial contract cases. However, the statement is apt to cascade through all professional liability litigation, and we see no reason why it should not.
Scope of duty – MBS and the “purpose of the duty”
Construction judges have expressed the view that the six-stage checklist set out by the majority of the Supreme Court[1] in Manchester Building Society v Grant Thornton UK LLP [2022] AC 783, [6] (‘MBS’) was primarily designed to analyse duties of care alleged to arise in novel situations not previously considered by the courts, or where the type of loss claimed was unusual. It was not primarily intended to be applied by rote to well-known and much-reported standard duties of care. See Coulson LJ’s judgments in Rushbond Plc v JS Design Partnership LLP [2021] EWCA Civ 1889, [74] and URS v BDW [2023] EWCA Civ 772, [35].
However, whilst the Court of Appeal in URS was not persuaded that MBS had any direct application, it accepted (at [36-43]) that MBS did provide a “sanity check” or “useful checklist”, and duly worked through it. The Supreme Court in URS noted (at [32]) that the key scope of duty principle derived from MBS was the need to look at the “purpose of the duty”. In MBS at [13] their Lordships had stated:
“In our view, the scope of the duty of care assumed by a professional adviser is governed by the purpose of the duty, judged on an objective basis by reference to the reason why the advice is being given (and, as is often the position, including in the present case, paid for).”
The Supreme Court in URS (at [68-69]) performed a similar, albeit considerably pared back cross-check, and further described the purpose of the duty as an “underlying policy” of fairly allocating risk of loss between parties:
“Similarly, in deciding on the scope of the duty of care, the law’s focus on the purpose of the duty reflects the underlying policy of achieving a fair and reasonable allocation of the risk of the loss that has occurred as between the parties. The conclusion we have reached as to the correct legal position is consistent with those underlying policies.”
As the majority in MBS noted (at [8]), in the context of the scope of duty question, the “fact that the defendant owes the claimant a duty to take reasonable care in carrying out its (the defendant’s) activities does not mean that the duty extends to every kind of harm which might be suffered by the claimant as a result of the breach of that duty…”. The examples that followed exemplified this point
- the duty of care owed by workmen not to cut off the electrical supply to a factory was to protect the claimant from damage suffered to its property; so damages for property damage were recoverable, but not business losses caused by the loss of power, which were irrecoverable (Spartan Steel & Alloys v Martin & Co (Contractors) Ltd [1973] QB 27);
- the duty of care owed by auditors of a company’s accounts to shareholders in that company extended to some purposes, but not for the purpose of recovering losses flowing from investment decisions made in reliance on those audited accounts (Caparo Industries plc v Dickman [1990] 2 AC 605);
- In URS v BDW the Supreme Court concluded (at [32]) that the purpose of URS’ duty was to guard BDW against “the very type of loss – the repair costs to the Developments – that BDW has incurred.”
It is clear following MBS and URS that the key concept in analysing the scope of duty is “the purpose of the duty”. This is simply a reflection of the underlying policy of achieving a fair and reasonable allocation between the parties of the risk of loss that has occurred. It would appear that, whether explicitly cited or not, even in a conventional duty case, the MBS six-stage checklist remains, at the very least, a useful cross check.
Contribution
Most multi-party disputes see ‘prime target’ defendants trying to redistribute liability among all those involved in a transaction / project that has gone awry. The ruling in URS that a defendant can seek contribution when its legal responsibility manifests in a payment (whether of money or in kind) is undoubtedly likely to increase the number of contribution actions. Nevertheless, a number of practical questions may linger in the minds of PI lawyers.
For one, would a payment on behalf of a defendant (perhaps by an insurer or a guarantor) be sufficient to trigger a contribution claim by that defendant? In Riedweg v HCC International Insurance plc [2024] EWHC 2805 (Ch), the insurer’s payment in satisfaction of its insolvent insured’s liability under the Third Parties (Rights Against Insurers) Act 2010, did not, it seems, entitle the insurer to bring contribution proceedings. [See When can Contribution Claims run into trouble?] But if the insolvency of a ‘prime target’ protects other liable defendants from contribution claims, that runs contrary to the clearly expressed policy imperative in URS (see at [69] the desire to “incentivise” legally responsible parties to correct their wrongs. What incentive is there to do so if waiting and avoiding responsibility might lead to protection from contribution claims?
Lord Leggatt was clear in his separate concurring judgment that the two-year limitation period for contribution claims starts to run as soon as there is an “identifiable amount of money” to which a second defendant can be made to contribute. It is easy to imagine arguments between defendants as to when precisely a sum becomes “identifiable” – especially if the payment to the innocent (potential) claimant is a payment in kind. When does the final cost of remedial works crystallise? What if a remedial works contract is agreed 25 months before a contribution claim is started, but the actual payments in respect of that contract are made only 23 months before, or the construct sum fluctuates?
Solicitors’ advice
URS also provides a reassuring dictum to solicitors advising on liability before and after the introduction of retrospective legislation – that “whether…advice given was negligent depends on what advice a reasonably competent and careful solicitor would have given in the circumstances existing when the advice was given. Changing the limitation period retrospectively does not change what advice such a solicitor would have given about whether the limitation period had expired.” It is intuitive and self-evident that it would be “unjust” if treating legislation as always having been in force meant a solicitor were “now to be held to have given negligent advice”. That said, it is always comforting for the Supreme Court to state the self-evident.
Conclusion
It remains to be seen exactly how the Supreme Court’s building safety policy imperatives of URS will have practical impact within the wider sphere of professional liability litigation. Nevertheless, there seems little doubt that URS is and will prove to be important both inside and outside the building safety domain.
© Siân Mirchandani KC and Douglas James, 4 New Square Chambers, 8 July 2025
Disclaimer: this article is not to be relied on as legal advice. The circumstances of each case differ and legal advice specific to the individual case should always be sought.
[1] The MBS Supreme Court’s majority comprised Lord Hodge and Lord Sales, with whom Lord Reed, Lord Kitchin and Lady Black agreed.
